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pdfInstructions for Preparation of
Consolidated Reports of Condition and Income
FFIEC 051
Updated December 2020
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FFIEC 051
CONTENTS
Instructions for Preparation of
Consolidated Reports of Condition and Income
for a Bank with Domestic Offices Only and
Total Assets Less than $5 Billion
(FFIEC 051)
CONTENTS
GENERAL INSTRUCTIONS
Who Must Report on What Forms
1
Eligibility to File the FFIEC 051
2
Close of Business
2
Frequency of Reporting
3
Differences in Detail of Reports
5
Shifts in Reporting Status
6a
Organization of the Instruction Book
7
Preparation of the Report
8
Signatures
8
Chief Financial Officer Declaration
8
Director Attestation
9
Submission of the Reports
9
Submission Date
10
Amended Reports
10
Retention of Reports
11
Scope of the "Consolidated Bank" Required to be Reported
in the Submitted Reports
11
Exclusions from the Coverage of the Consolidated Report
Rules of Consolidation
12
Publication Requirements for the Consolidated Report of Condition
14
Release of Individual Bank Reports
14
Applicability of U.S. Generally Accepted Accounting Principles to
Regulatory Reporting Requirements
14
Subsequent Events
15
Accrual Basis Reporting
16
Miscellaneous General Instructions
16
Rounding
16
Negative Entries
16
Verification
17
Transactions Occurring Near the End of a Reporting Period
17
Legal Entity Identifier
FFIEC 051
11
18
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CONTENTS
FFIEC 051
CONTENTS
LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF INCOME
Schedule RI – Income Statement
RI-1
Schedule RI-A – Changes in Bank Equity Capital
RI-A-1
Schedule RI-B – Charge-offs and Recoveries and Changes in Allowances
for Credit Losses
Part I. Charge-offs and Recoveries on Loans and Leases
RI-B-1
Part II. Changes in Allowances for Credit Losses
RI-B-5
Schedule RI-C – Disaggregated Data on the Allowance for Loan and
Lease Losses
RI-C-1
Schedule RI-E – Explanations
RI-E-1
LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF CONDITION
Schedule RC – Balance Sheet
RC-1
Schedule RC-B – Securities
RC-B-1
Schedule RC-C – Loans and Lease Financing Receivables
Part I. Loans and Leases
RC-C-1
Part II. Loans to Small Businesses and Small Farms
RC-C-41
Schedule RC-E – Deposit Liabilities
RC-E-1
Schedule RC-F – Other Assets
RC-F-1
Schedule RC-G – Other Liabilities
RC-G-1
Schedule RC-K – Quarterly Averages
RC-K-1
Schedule RC-L – Off-Balance-Sheet Items
RC-L-1
Schedule RC-M – Memoranda
RC-M-1
Schedule RC-N – Past Due and Nonaccrual Loans, Leases, and
Other Assets
RC-N-1
Schedule RC-O – Other Data for Deposit Insurance Assessments
RC-O-1
Schedule RC-R – Regulatory Capital
RC-R-1
Part I. Regulatory Capital Components and Ratios
Part II. Risk-Weighted Assets
RC-R-2
RC-R-35
Schedule RC-T – Fiduciary and Related Services
RC-T-1
LINE ITEM INSTRUCTIONS FOR SCHEDULE SU
Schedule SU – Supplemental Information
Optional Narrative Statement Concerning the Amounts Reported in
the Consolidated Reports of Condition and Income
FFIEC 051
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SU-1
SU-19
CONTENTS
FFIEC 051
CONTENTS
GLOSSARY
Accounting Changes
A-1
Accrued Interest Receivable
A-3
Accrued Interest Receivable Related to Credit Card Securitizations
A-4
Acquisition, Development, or Construction (ADC) Arrangements
A-4a
Allowance for Credit Losses
A-4a
Allowance for Loan and Lease Losses
A-4d
Amortized Cost Basis
A-6
Bankers Acceptances
A-6
Bank-Owned Life Insurance
A-8
Banks, U.S. and Foreign
A-9
Brokered Deposits
A-11
Broker's Security Draft
A-13
Business Combinations
A-13
Capital Contributions of Cash and Notes Receivable
FFIEC 051
A-16a
Capitalization of Interest Costs
A-17
Cash Management Arrangements
A-18
Commercial Paper
A-19
Commodity or Bill-of-Lading Draft
A-19
Coupon Stripping, Treasury Receipts, and STRIPS
A-19
Custody Account
A-20
Dealer Reserve Account
A-20
Debt Issuance Costs
A-20
Deferred Compensation Agreements
A-21
Defined Benefit Postretirement Plans
A-23
Depository Institutions in the U.S.
A-24
Deposits
A-24
Derivative Contracts
A-33
Dividends
A-39
Domestic Office
A-40
Due Bills
A-40
Edge and Agreement Corporation
A-40
Equity-Indexed Certificates of Deposit
A-40
Equity Method of Accounting
A-42
Excess Balance Account
A-43
Extinguishments of Liabilities
A-43
Fails
A-44
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CONTENTS
FFIEC 051
CONTENTS
GLOSSARY (cont.)
Fair Value
A-44
Federal Funds Transactions
A-45
Federally-Sponsored Lending Agency
A-46
Foreclosed Assets
A-46
Foreign Currency Transactions and Translation
A-52
Foreign Debt Exchange Transactions
A-53
Foreign Governments and Official Institutions
A-53
Foreign Office
A-53
Goodwill
A-54
Hypothecated Deposit
A-57
Income Taxes
A-58
Internal-Use Computer Software
A-65
International Banking Facility (IBF)
A-66
Lease Accounting
A-67
Letter of Credit
A-68f
Loan
A-70
Loan Fees
A-70
Loan Impairment
A-72
Loan Secured by Real Estate
A-74
Loss Contingencies
A-75
Mandatory Convertible Debt
A-75
Nonaccrual Status
A-76
Offsetting
A-79
Other-Than-Temporary Impairment
A-80
Overdraft
A-80
Pass-through Reserve Balances
A-80a
Preferred Stock
A-80b
Premiums and Discounts
A-81
Private Company
A-81
Public Business Entity
FFIEC 051
A-82a
Purchased Credit-Deteriorated Assets
A-82
Purchased Credit-Impaired Loans and Debt Securities
A-83
Reciprocal Balances
A-86
Repurchase/Resale Agreements
A-86
Revenue from Contracts with Customers
A-88
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CONTENTS
FFIEC 051
CONTENTS
GLOSSARY (cont.)
Securities Activities
A-88a
Securities Borrowing/Lending Transactions
A-90
Servicing Assets and Liabilities
A-91
Shell Branches
A-93
Short Position
A-93
Start-Up Activities
A-94
Subordinated Notes and Debentures
A-95
Subsidiaries
A-95
Suspense Accounts
A-96
Syndications
A-96
Trade Date and Settlement Date Accounting
A-96
Trading Account
A-97
Transfers of Financial Assets
A-98
Treasury Stock
A-104
Troubled Debt Restructurings
A-104
Trust Preferred Securities
FFIEC 051
A-106b
U.S. Territories and Possessions
A-107
Valuation Allowance
A-107
Variable Interest Entity
A-107
When-Issued Securities Transactions
A-108
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FFIEC 051
GENERAL INSTRUCTIONS
GENERAL INSTRUCTIONS
Schedules RC and RC-B through RC-T constitute the FFIEC 051 version of the Consolidated Report of
Condition and its supporting schedules. Schedules RI and RI-A through RI-E constitute the Consolidated
Report of Income and its supporting schedules. Schedule SU – Supplemental Information collects
additional information in the FFIEC 051 on certain complex or specialized activities in which an institution
may engage. The Consolidated Reports of Condition and Income are commonly referred to as the
Call Report. For purposes of these General Instructions, the Financial Accounting Standards Board
(FASB) Accounting Standards Codification is referred to as the “ASC.”
Unless the context indicates otherwise, the term “bank” in the Call Report instructions refers to both
banks and savings associations.
WHO MUST REPORT ON WHAT FORMS
Every national bank, state member bank, insured state nonmember bank, and savings association is
required to file a consolidated Call Report normally as of the close of business on the last calendar day of
each calendar quarter, i.e., the report date. The specific reporting requirements for a bank depend upon
the size of the bank, whether it has any "foreign" offices, and the capital standards applicable to the bank.
Banks must file the appropriate report form as described below:
(1) BANKS WITH FOREIGN OFFICES: Banks of any size that have any "foreign" offices (as defined
below) must file quarterly the Consolidated Reports of Condition and Income for a Bank with
Domestic and Foreign Offices (FFIEC 031). For purposes of these reports, all of the following
constitute "foreign" offices:
(a) An International Banking Facility (IBF);
(b) A branch or consolidated subsidiary in a foreign country; and
(c) A majority-owned Edge or Agreement subsidiary.
In addition, for banks chartered and headquartered in the 50 states of the United States and the
District of Columbia, a branch or consolidated subsidiary in Puerto Rico or a U.S. territory or
possession is a “foreign” office. However, for purposes of these reports, a branch at a U.S. military
facility located in a foreign country is a "domestic" office.
(2) BANKS WITHOUT FOREIGN OFFICES: Banks that have domestic offices only must file quarterly:
(a) The Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices
(FFIEC 031) if the bank:
(i) Is an advanced approaches institutions for regulatory capital purposes,1 regardless of asset
size; or
1
An advanced approaches institution as defined in the federal supervisor’s regulatory capital rules is (i) a subsidiary
of a global systemically important bank holding company, as identified pursuant to 12 CFR 217.402; (ii) a Category II
institution; (iii) a subsidiary of a depository institution that uses the advanced approaches pursuant to subpart E of
12 CFR part 3 (OCC), 12 CFR part 217 (Board), or 12 CFR part 324 (FDIC) to calculate its risk-based capital
requirements; (iv) a subsidiary of a bank holding company or savings and loan holding company that uses the
advanced approaches pursuant to subpart E of 12 CFR part 217 to calculate its risk-based capital requirements; or
(v) an institution that elects to use the advanced approaches to calculate its risk-based capital requirements.
Category II institutions include institutions that have (1) at least $700 billion in total consolidated assets or (2) at
least $75 billion in cross-jurisdictional activity and at least $100 billion in total consolidated assets. In addition,
depository institution subsidiaries of Category II institutions are considered Category II institutions.
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GENERAL INSTRUCTIONS
FFIEC 051
GENERAL INSTRUCTIONS
(ii) Has total consolidated assets of $100 billion or more,1 including a bank of this size that is
subject to Category III capital standards2;
(b) The Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only
(FFIEC 041) if the bank has total consolidated assets less than $100 billion, including a bank of
this size that is subject to Category III capital standards, but excluding a bank of this size that is
an advanced approaches institution; or
(c) The Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only and
Total Assets Less than $5 Billion (FFIEC 051) subject to the eligibility criteria discussed below,
as appropriate to the reporting institution. An institution eligible to file the FFIEC 051 report may
choose instead to file the FFIEC 041 report.
For banks chartered and headquartered in Puerto Rico or a U.S. territory or possession, a branch
or consolidated subsidiary in one of the 50 states of the United States, the District of Columbia,
Puerto Rico, or a U.S. territory or possession is a "domestic" office.
For those institutions filing the FFIEC 031 or FFIEC 041, a separate instruction book covers both of these
report forms. Please refer to this separate instruction book for the General Instructions for the FFIEC 031
and the FFIEC 041 report forms.
Eligibility to File the FFIEC 051
Institutions with domestic offices only and total assets less than $5 billion, excluding (1) those that are
advanced approaches institutions or are subject to Category III capital standards for regulatory capital
purposes and (2) those that are large or highly complex institutions for deposit insurance assessment
purposes,3 are eligible to file the FFIEC 051 Call Report. An institution’s total assets are measured as of
June 30 each year to determine the institution’s eligibility to file the FFIEC 051 beginning in March of the
following year. Institutions are expected to file the same report form, either the FFIEC 051 or the
FFIEC 041, for each quarterly report date in a given year.
For an institution otherwise eligible to file the FFIEC 051, the institution’s primary federal regulatory
agency, jointly with the state chartering authority, if applicable, may require the institution to file the
FFIEC 041 instead based on supervisory needs. In making this determination, the appropriate agency
may consider criteria including, but not limited to, whether the eligible institution is significantly engaged in
one or more complex, specialized, or other higher risk activities, such as those for which limited
information is reported in the FFIEC 051 compared to the FFIEC 041 (trading; derivatives; mortgage
banking; fair value option usage; servicing, securitization, and asset sales; and variable interest entities).
The agencies anticipate making such determinations only in a limited number of cases.
Close of Business
The term "close of business" refers to the time established by the reporting bank as the cut-off time for
receipt of work for posting transactions to its general ledger accounts for that day. The time designated
as the close of business should be reasonable and applied consistently. The posting of a transaction to
the general ledger means that both debit and credit entries are recorded as of the same date. In addition,
entries made to general ledger accounts in the period subsequent to the close of business on the report
date that are applicable to the period covered by the Call Report (e.g., adjustments of accruals, posting of
1
The $100 billion asset-size test is based on the total assets reported as of June 30 each year to determine whether
the institution must file the FFIEC 031 report form beginning in March of the following year.
2
Category III institutions include institutions, which are not advanced approaches institutions, that have (1) at least
$250 billion in average total consolidated assets or (2) at least $100 billion in average total consolidated assets and at
least $75 billion in average total nonbank assets, average weighted short-term wholesale funding, or average
off-balance sheet exposure. In addition, depository institution subsidiaries of Category III institutions are considered
Category III institutions.
3
See 12 CFR § 327.8 and 12 CFR § 327.16(f).
FFIEC 051
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GENERAL INSTRUCTIONS
FFIEC 051
GENERAL INSTRUCTIONS
items held in suspense on the report date to their proper accounts, and other quarter-end adjusting
entries) should be reported in the Call Report as if they had actually been posted to the general ledger at
or before the cut-off time on the report date.
With respect to deposits received by the reporting bank after the cut-off time for posting them to individual
customer accounts for a report date (i.e., so-called "next day deposits" or "late deposits"), but which are
nevertheless posted in any manner to the reporting bank's general ledger accounts for that report date
(including, but not limited to, through the use of one or more general ledger contra accounts), such
deposits must be reported in Schedule RC-O, Other Data for Deposit Insurance Assessments, item 1,
and may also be reported in Schedule RC, Balance Sheet, item 13, “Deposits,” and Schedule RC-E,
Deposit Liabilities. However, the use of memorandum accounts outside the reporting bank's general
ledger system for control over "next day" or "late deposits" received on the report date does not in and of
itself make such deposits reportable in Schedule RC-O and Schedules RC and RC-E.
Frequency of Reporting1
Each institution is required to submit a Call Report quarterly as of the report date. However, for banks
with fiduciary powers, the reporting frequency for Schedule RC-T, Fiduciary and Related Services,
depends on their total fiduciary assets and their gross fiduciary and related services income. Banks with
total fiduciary assets greater than $250 million (as of the preceding December 31) or with gross fiduciary
and related services income greater than 10 percent of revenue (net interest income plus noninterest
income) for the preceding calendar year must complete the applicable items of Schedule RC-T quarterly
or semiannually as of the June 30 and December 31 report dates based on the amount of such assets
and income. All other banks with fiduciary powers must complete the applicable items of Schedule RC-T
annually as of the December 31 report date.
For all institutions filing the FFIEC 051, Schedule RC-C, Part II, Loans to Small Businesses and Small
Farms, must be completed semiannually as of the June 30 and December 31 report dates.
Schedule RC, Memorandum item 1, on the level of external auditing work performed for the bank, and
Memorandum item 2, on the bank’s fiscal year-end date, are to be reported annually as of the March 31
report date.
In addition, the following items are to be completed annually as of the December 31 report date by all
institutions filing the FFIEC 051, as applicable:
(1) Schedule RI-E, items 1.a through 1.j, on components of other noninterest income;
(2) Schedule RI-E, items 2.a through 2.p, on components of other noninterest expense;
(3) Schedule RC-C, Part I, Memorandum items 8.b and 8.c, and Schedule RI, Memorandum item 12, on
closed-end 1-4 family residential mortgage loans with negative amortization features;
(4) Schedule RC-C, Part I, Memorandum items 15.a.(1) through 15.c.(2), on reverse mortgages;
(5) Schedule RC-E, Memorandum item 1.e, "Preferred deposits;"
(6) Schedule RC-M, item 6, “Does the reporting bank sell private label or third-party mutual funds and
annuities?”;
(7) Schedule RC-M, item 7, “Assets under the reporting bank’s management in proprietary mutual funds
and annuities”;
1
The reporting frequency for particular schedules and data items differs on the three versions of the Call Report.
Please see the General Instructions for the FFIEC 031 and the FFIEC 041 for a listing of data items reported less
frequently than quarterly on those report forms.
FFIEC 051
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GENERAL INSTRUCTIONS
FFIEC 051
GENERAL INSTRUCTIONS
(8) Schedule RC-M, item 9, “Do any of the bank’s Internet websites have transactional capability,
i.e., allow the bank’s customers to execute transactions on their accounts through the website?”;
(9) Schedule RC-M, item 11, “Does the bank act as trustee or custodian for Individual Retirement
Accounts, Health Savings Accounts, and other similar accounts?“;
(10) Schedule RC-M, item 12, “Does the bank provide custody, safekeeping, or other services involving
the acceptance of orders for the sale or purchase of securities?”; and
(11) Schedule RC-M, items 14.a and 14.b, on assets of captive insurance and reinsurance subsidiaries.
The following items, if applicable, are to be completed annually as of the December 31 report date only by
institutions with $1 billion or more in total assets (measured as of June 30 of the preceding year) filing the
FFIEC 051:
(1) Schedule RI, Memorandum item 15, “Components of service charges on deposit accounts” (if the
institution answered “Yes” to Schedule RC-E, Memorandum item 5, which asks whether the institution
offers one or more consumer deposit account products);
(2) Schedule RC-E, Memorandum items 6 and 7, on the amount of deposits in transaction and
nontransaction savings consumer deposit account products (if the bank answered “Yes” to Schedule
RC-E, Memorandum item 5, which asks whether the bank offers one or more consumer deposit
account products).
The following items are to be reported semiannually as of the June 30 and December 31 report dates by
all institutions filing the FFIEC 051, as applicable:
(1) Schedule RI, Memorandum item 14, “Other-than-temporary impairment losses on held-to-maturity
and available-for-sale debt securities recognized in earnings”;
(2) Schedule RC-B, Memorandum item 3, “Amortized cost of held-to-maturity securities sold or
transferred to available-for-sale or trading securities during the calendar year-to-date”;
(3) Schedule RC-C, Part I, Memorandum items 1.a.(1) through 1.f.(5), on “Loans restructured in troubled
debt restructurings that are in compliance with their modified terms” by loan category;
(4) Schedule RC-C, Part I, Memorandum item 4, “Adjustable-rate closed-end loans secured by first liens
on 1–4 family residential properties (included in Schedule RC-C, Part I, item 1.c.(2)(a))”;
(5) Schedule RC-C, Part I, Memorandum items 7.a and 7.b, on purchased credit-impaired loans held for
investment;
(6) Schedule RC-C, Part I, Memorandum item 8.a, on closed-end 1-4 family residential mortgage loans
with negative amortization features;
(7) Schedule RC-C, Part I, Memorandum item 12, columns A through C, “Loans (not subject to the
requirements of FASB ASC 310-30 (former AICPA Statement of Position 03-3)) and leases held for
investment that were acquired in business combinations with acquisition dates in the current calendar
year”;
(8) Schedule RC-E, Memorandum item 1.a, “Total Individual Retirement Accounts (IRAs) and Keogh
Plan accounts”;
(9) Schedule RC-E, Memorandum item 5, “Does your institution offer one or more consumer deposit
account products, i.e., transaction account or nontransaction savings account deposit products
intended primarily for individuals for personal, household, or family use?”;
FFIEC 051
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GENERAL INSTRUCTIONS
FFIEC 051
GENERAL INSTRUCTIONS
(10) Schedule RC-F, items 6.a through 6.j, on components of all other assets;
(11) Schedule RC-G, items 4.a through 4.h, on components of all other liabilities;
(12) Schedule RC-L, items 9.c through 9.f, on components of all other off-balance sheet liabilities;
(13) Schedule RC-L, items, 10.b through 10.e, on components of all other off-balance sheet assets;
(14) Schedule RC-L, items 11.a and 11.b, on year-to-date merchant credit card sales volume;
(15) Schedule RC-M, items 8.a through 8.c, on website addresses and physical office trade names;
(16) Schedule RC-N, Memorandum items 1.a.(1) through 1.f.(5), columns A through C, on loans
restructured in troubled debt restructurings by loan category that are past due 30 days or more and
still accruing or are on nonaccrual;
(17) Schedule RC-N, Memorandum item, 5, columns A through C, on past due and nonaccrual loans and
leases held for sale;
(18) Schedule RC-N, Memorandum items 7 and 8, on additions to and sales of nonaccrual assets during
the previous six months;
(19) Schedule RC-N, Memorandum items 9.a and 9.b, columns A through C, on purchased creditimpaired loans.
(20) Schedule RC-R, Part II, items 1 through 25, columns A through U, as applicable, on the risk
weighting of assets and other exposures for risk-based capital purposes; and
(21) Schedule RC-R, Part II, Memorandum item 1, on the current credit exposure of all derivatives and
Memorandum items 2 and 3, columns A through C, on the notional amounts of derivatives by
remaining maturity and underlying risk exposure.
The following items are to be completed semiannually as of the June and December 31 report dates only
by institutions with $1 billion or more in total assets (measured as of June 30 of the preceding year) filing
the FFIEC 051:
(1) Schedule RI-C, items 1 through 6, columns A and B, on disaggregated data on the allowance for loan
and lease losses or the allowance for credit losses on loans and leases, as applicable; and
(2) For institutions that have adopted ASU 2016-13, which governs the accounting for credit losses,
Schedule RI-C, items 7 through 11, on disaggregated data on the allowance for credit losses on
held-to-maturity debt securities.
In addition, in Schedule RC-M, information on “International remittance transfers offered to consumers” is
to be provided in item 16.a and, if appropriate, in items 16.c and 16.d semiannually as of the June 30 and
December 31 report dates. Item 16.b is to be completed annually as of the June 30 report date only.
Differences in Detail of Reports
The amount of detail required to be reported varies between the three versions of the Call Report forms,
with the report form for banks with foreign offices or with total consolidated assets of $100 billion or more
(FFIEC 031) having more detail than the report form for banks with domestic offices only and total
consolidated assets of less than $100 billion (FFIEC 041). The report form for banks with domestic
offices only and total assets less than $5 billion (FFIEC 051) has the least amount of detail of the three
reports.
FFIEC 051
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GENERAL INSTRUCTIONS
FFIEC 051
GENERAL INSTRUCTIONS
Furthermore, as discussed below under Shifts in Reporting Status, the amount of detail also varies within
each report form, primarily based on the size of the bank. See the General Instructions section of the
instruction book for the FFIEC 031 and the FFIEC 041 for information on the differences in the level of
detail within the FFIEC 031 and the FFIEC 041 report forms.
Differences in the level of detail within the FFIEC 051 report form are as follows:
(1) Banks with specified loan categories included in Schedule RC-C, Part I, Memorandum item 1.f, “All
other loans” that exceed 10 percent of total loans restructured in troubled debt restructurings (TDRs)
that are in compliance with their modified terms must report the amount of such TDRs in
Memorandum items 1.f.(1), 1.f.(4)(a), 1.f.(4)(b), and 1.f.(4)(c).
(2) Banks that reported closed-end loans with negative amortization features secured by 1–4 family
residential properties in Schedule RC-C, Part I, Memorandum item 8.a, as of the preceding
December 31 that exceeded the lesser of $100 million or 5 percent of total loans and leases
held for investment and held for sale must report certain additional information on these loans in
Schedule RC-C, Part I, Memorandum items 8.b and 8.c, and Schedule RI, Memorandum item 12,
annually in the December report only.
(3) Banks that reported construction, land development, and other land loans in Schedule RC-C, Part I,
item 1.a, that exceeded 100 percent of total capital as of the preceding December 31 must report
certain information on loans in this loan category with interest reserves in Schedule RC-C, Part I,
Memorandum items 13.a and 13.b.
(4) Banks that reported in Schedule RC-M, item 16.b, that they provided more than 100 international
remittance transfers in the previous calendar year or that they estimate that they will provide more
than 100 international remittance transfers in the current calendar year must report certain additional
information on their international remittance transfer activities during specified periods in
Schedule RC-M, items 16.c and 16.d.
(5) Banks with specified loan categories included in Schedule RC-N, Memorandum item 1.f, “All other
loans” that exceed 10 percent of total loans restructured in troubled debt restructurings (TDRs) that
are past due 30 days or more or are in nonaccrual status must report the amount of such TDRs in
Memorandum items 1.f.(1), 1.f.(4)(a), 1.f.(4)(b), and 1.f.(4)(c).
(6) Banks with total fiduciary assets greater than $250 million (as of the preceding December 31) or with
gross fiduciary and related services income greater than 10 percent of revenue (net interest income
plus noninterest income) for the preceding calendar year must report information on their fiduciary
and related services income and on fiduciary settlements and losses in Schedule RC-T.
(7) Banks with total fiduciary assets greater than $100 million but less than or equal to $250 million (as of
the preceding December 31) and with gross fiduciary and related services income less than or equal
to 10 percent of revenue (net interest income plus noninterest income) for the preceding calendar
year must report information on fiduciary settlements and losses in Schedule RC-T.
(8) Banks with collective investment funds and common trust funds with a total market value of $1 billion
or more as of the preceding December 31 must report a breakdown of these funds by type of fund in
Schedule RC-T, Memorandum items 3.a through 3.g, quarterly or annually, as appropriate.
(9) Banks that, for each of the two calendar quarters preceding the current calendar quarter, had either
(a) more than $10 million in sales of 1-4 family residential mortgage loans during the calendar
quarter, or (b) more than $10 million in 1-4 family residential mortgage loans held for sale or trading at
calendar quarter-end must complete Schedule SU, items 2.a and 2.b.
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FFIEC 051
GENERAL INSTRUCTIONS
(10) Banks servicing either (a) any closed-end 1-4 family residential mortgages or (b) more than
$10 million in financial assets other than closed-end 1-4 family residential mortgages must report the
total volume of such servicing in Schedule SU, item 6.a.
(11) Banks that, together with affiliated institutions, have outstanding credit card receivables that exceed
$500 million as of the report date or are credit card specialty institutions as defined for Uniform
Institution Performance Report purposes must report certain information on retail credit card fees and
finance charges in Schedule SU, items 8.a through 8.d.
Shifts in Reporting Status
All shifts in reporting status within the FFIEC 051 report form (except as noted below) are to begin with
the March Call Report. Such a shift will take place only if the reporting bank's total assets, agricultural
loans, or credit card lines, as reflected in the Consolidated Report of Condition for June of the previous
calendar year, equal or exceed the following criteria:
(1) When total assets equal or exceed $100 million, a bank must begin to complete Schedule RC-K,
item 13, for the quarterly average of "Other borrowed money."
(2) When loans to finance agricultural production and other loans to farmers exceed 5 percent of total
loans and leases held for investment and held for sale at a bank with less than $300 million in total
assets, the bank must begin to report the following information for these agricultural loans: interest
and fee income, quarterly average, past due and nonaccrual loans, charge-offs and recoveries, and,
if certain additional criteria are met, troubled debt restructurings.
(3) When total assets equal or exceed $300 million, a bank must begin to complete certain Memorandum
items providing the following information on loans to finance agricultural production and other loans to
farmers: interest and fee income, quarterly average, past due and nonaccrual loans, charge-offs and
recoveries, and, if certain additional criteria are met, troubled debt restructurings.
(4) When total assets equal or exceed $1 billion, a bank must begin to complete the following items, as
applicable:
Schedule RI, Memorandum item 15, “Components of service charges on deposit accounts” (if the
bank answered “Yes” to Schedule RC-E, Memorandum item 5, which asks whether the bank
offers one or more consumer deposit account products);
Schedule RI-C, items 1 through 6, columns A and B, on disaggregated data on the allowance for
loan and lease losses;
For those institutions that have adopted ASU 2016-13, which governs the accounting for credit
losses, Schedule RI-C, items 7 through 11, on disaggregated data on the allowance for credit
losses for held-to-maturity debt securities;
Schedule RC-E, Memorandum items 6 and 7, on the amount of deposits in transaction and
nontransaction savings consumer deposit account products (if the bank answered “Yes” to
Schedule RC-E, Memorandum item 5, which asks whether the bank offers one or more consumer
deposit account products); and
Schedule RC-O, Memorandum item 2, “Estimated amount of uninsured deposits including related
interest accrued and unpaid.”
Once a bank reaches the $100 million, $300 million, or $1 billion total asset threshold or exceeds the
agricultural loan percentage threshold and begins to report the additional required information described
above, it must continue to report the applicable additional information in subsequent years unless its total
assets or loan percentage subsequently fall to less than the applicable threshold for four consecutive
quarters. In this case, the institution may cease reporting the data items to which the threshold applies in
the quarter after the four consecutive quarters in which its total assets or agricultural loans have fallen
below the applicable threshold. However, if the institution exceeds the threshold as of a subsequent
June 30 report date, the data items would again be required to be reported beginning in March of the
following year.
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For example, if June 30, 2019, is the first June 30 as of which an institution reports $300 million or more
in total assets, the institution must begin reporting the data items to which the $300 million total assets
threshold applies as of the March 31, 2020, report date. If the institution reports less than $300 million in
total assets each quarter-end from September 30, 2019, through June 30, 2020, it may cease reporting
the data items applicable to institutions with $300 million or more in total assets beginning September 30,
2020. In contrast, if instead the institution reports $300 million or more in total assets as of September 30
and December 31, 2019, but then reports less than $300 million in total assets each quarter-end from
March 31, 2020, through December 31, 2020, it may cease reporting the data items applicable to
institutions with $300 million or more in total assets beginning March 31, 2021.
For a bank that files the FFIEC 051 report, other shifts in reporting status occur when:
(1) The bank establishes or acquires any "foreign" office. The bank must begin filing the FFIEC 031
report form (Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign
Offices) for the first quarterly report date following the commencement of operations by the "foreign"
office. However, a bank with "foreign" offices that divests itself of all its "foreign" offices must
continue filing the FFIEC 031 report form through the end of the calendar year in which the cessation
of all operations of its "foreign" offices was completed.
(2) The institution is involved in a business combination, a transaction between entities under common
control, or a branch acquisition that is not a business combination. Beginning with the first quarterly
report date following the effective date of a such a transaction involving an institution and one or more
other depository institutions, the resulting institution, regardless of its size prior to the transaction,
must (a) file the FFIEC 031 report form if it acquires any "foreign" office, or (b) report the additional
required information described above on the FFIEC 051 report form if its total assets or agricultural
loans after the consummation of the transaction surpass the $100 million, $300 million, or $1 billion
total asset threshold or the agricultural loan percentage.
(3) The institution becomes an advanced approaches institution for regulatory capital purposes or a large
or highly complex institution for deposit insurance assessment purposes. The institution must begin
filing the FFIEC 031 report form for the first quarterly report date after the date it becomes such an
institution.
(4) The institution becomes a Category III institution for regulatory capital purposes. The institution must
begin filing the FFIEC 041 report form for the first quarterly report date after the date it becomes such
an institution (unless it establishes or acquires a “foreign office” in the same quarter that it becomes
such an institution, in which case the institution must begin filing the FFIEC 031 report form for that
first quarterly report date).
In addition, beginning with the first quarterly report date after an operating depository institution that was
not previously a member of the Federal Deposit Insurance Corporation (FDIC) becomes an FDIC-insured
institution and is eligible to, and chooses to, file the FFIEC 051, it must report the additional required
information described above, based on its total assets and agricultural loans at the time it becomes
FDIC-insured.
ORGANIZATION OF THE INSTRUCTION BOOK
This instruction book covers the FFIEC 051 report form.1 It is divided into the following sections:
(1) The General Instructions describe overall reporting requirements.
(2) The Line Item Instructions for each schedule of the Consolidated Report of Income.
1
A separate instruction book covers both the FFIEC 031 and the FFIEC 041 report forms.
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(3) The Line Item Instructions for each schedule of the Consolidated Report of Condition.
(4) The Line Item Instructions for Schedule SU – Supplemental Information.
The instructions and definitions in sections (2), (3), and (4) are not necessarily self-contained;
reference to more detailed treatments in the Glossary may be needed.
(5) The Glossary presents, in alphabetical order, definitions and discussions of accounting and reporting
issues and 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 these
reports. The Glossary is not, and is not intended to be, a comprehensive discussion of the principles
of bank accounting or reporting.
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. A single section does not
necessarily give the complete instructions for completing all the items of the reports.
The instruction book for the FFIEC 051 report form is available on the Internet on the FFIEC’s website
(https://www.ffiec.gov/forms051.htm) and on the FDIC’s website
(https://www.fdic.gov/regulations/resources/call/call.html).
PREPARATION OF THE REPORT
Banks are required to prepare and file the Call Report in accordance with these instructions. All reports
shall be prepared in a consistent manner.
The bank's financial records shall be maintained in such a manner and scope so as to ensure that the
Call Report can be prepared and filed in accordance with these instructions and reflect a fair presentation
of the bank's financial condition and results of operations.
Questions and requests for interpretations of matters appearing in any part of these instructions should
be addressed to the bank's primary federal bank supervisory agency (i.e., the Federal Reserve Banks,
the OCC, or the FDIC). Such inquiries will be referred for resolution to the Task Force on Reports of the
Federal Financial Institutions Examination Council (FFIEC). Regardless of whether a bank requests an
interpretation of a matter appearing in these instructions, when a bank's primary federal bank supervisory
agency's interpretation of the instructions differs from the bank's interpretation, the supervisory agency
may require the bank to prepare its Call Report in accordance with the agency's interpretation and to
amend previously submitted reports.
SIGNATURES
Either the cover (signature) page of any agency-supplied sample set of report forms, a photocopy of this
cover page, or a copy of the cover page printed from the bank's report preparation software or from the
FFIEC’s or the FDIC’s website should be used to fulfill the signature and attestation requirement.
Chief Financial Officer Declaration
The chief financial officer of the bank (or the individual performing an equivalent function) shall sign a
declaration on the cover (signature) page attesting to the correctness of the Consolidated Reports of
Condition and Income that the bank has filed with the appropriate supervisory agency.
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Director Attestation
National banks, state member banks, and savings associations – The correctness of the Consolidated
Reports of Condition and Income shall be attested to by at least three directors of the reporting bank,
other than the officer signing the chief financial officer declaration, as indicated on the cover (signature)
page.
State nonmember banks – The correctness of the Consolidated Reports of Condition and Income shall be
attested to by at least two directors of the reporting bank, other than the officer signing the chief financial
officer declaration, as indicated on the cover (signature) page.
SUBMISSION OF THE REPORTS
Each bank must file its Call Report data in one of the following two ways:
•
A bank may use computer software to prepare and edit its report data and then electronically submit
the data directly to the FFIEC’s Central Data Repository (CDR), an Internet-based system for data
collection (https://cdr.ffiec.gov/cdr/).
•
The institution may complete its report in paper form and arrange with a software vendor or another
party to convert its paper report into the electronic format that can be processed by the CDR. The
software vendor or other party then must electronically submit the institution’s data file to the CDR.
The filing of a Call Report in paper form directly with the FDIC (for national banks, FDIC-supervised
banks, and savings associations) or with the appropriate Federal Reserve District Bank (for state member
banks) is not an acceptable method of submission.
Regardless of the method a bank uses to file its Call Report, the bank remains responsible for the
accuracy of the data in its Call Report. Banks are required to submit a Call Report by the submission
date (as defined below) that passes FFIEC-published validation criteria (validity edits and quality edits) or
that contains explanations for any quality edits that are not passed. These validation criteria are
published in advance of each quarter end. Specific “Guidelines for Resolving Edits” are available on the
FFIEC’s website (http://www.ffiec.gov/find/documents/resolvingedits.pdf).
In order to submit their completed reports to the CDR, banks (or third parties with whom they have made
submission arrangements) must use software that meets the technical specifications for producing files
that are able to be processed by the CDR. (These technical specifications are available on the FFIEC’s
website.) Vendors whose software has been successfully tested with regard to this ability are listed in
each quarter’s Financial Institution Letter for the Call Report. Alternatively, banks may develop their own
reporting software and test directly with the CDR.
Submitted reports that are unable to be processed by the CDR, or that have not been adequately
validated by the bank, will be rejected and will require correction and resubmission. In either case, if such
resubmission is received by the CDR after the submission date for the report (as defined below), the
submitting bank may be subject to the penalties prescribed for late submission.
Each bank is responsible for ensuring that the data reported each quarter reflects fully and accurately the
data item reporting requirements for that report date, including any changes that may be made from time
to time. This responsibility cannot be transferred or delegated to software vendors, servicers, or others
outside the reporting bank.
A bank filing its Call Report with the CDR electronically or under the paper-based alternative must
maintain in its files a signed and attested record of its completed report each quarter. This record should
be either a computer printout showing at least the caption of each item in the Call Report and the
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reported amount, a computer-generated facsimile of the report form, or a copy of the printed report form.
The signed cover page, as discussed under “Signatures” above, should be attached to the printout,
computer-generated facsimile, or copy of the form that the bank places in its files.
State banks should refer to their appropriate state bank supervisory authority for information concerning
state requirements for submitting copies of the Call Report filed with federal bank supervisory authorities.
Submission Date
The term "submission date" is defined as the date by which a bank's completed Call Report must be
received in electronic form by the CDR. Except as indicated below, the CDR must receive the data file
for a bank's Call Report, with all corrections made and all explanations provided consistent with the
“Guidelines for Resolving Edits” (http://www.ffiec.gov/find/documents/resolvingedits.pdf), no more than
30 calendar days after the report date. For example, the March 31 report must be received by April 30
and the June 30 report by July 30.
Any bank contracting with a third party to convert its reports to the electronic format for the CDR must
ensure that it delivers its hard-copy reports to the third party in sufficient time for (1) the third party to
enter the data into the appropriate format; (2) the bank to research and resolve any identified edit
exceptions; and (3) the third party to electronically transmit the original submission and any necessary
resubmissions to the CDR by the submission deadline. Early submission is strongly encouraged so that
the bank has ample time to research and resolve any edit exceptions identified through the submission
process. No extensions of time for submitting reports are granted.
Any bank that has more than one foreign office, other than a "shell" branch or an IBF, may take an
additional limited period of time to submit its Call Report. The CDR must receive the data file for such a
bank's Call Report no more than 35 calendar days after the report date. Such banks are urged to use the
additional time only if absolutely necessary and to make every effort to report as soon as possible,
preferably within the 30-day submission period.
Amended Reports
A bank's primary federal bank supervisory authority may require the filing of an amended Call Report if
reports as previously submitted contain significant errors, as determined by the supervisory authority, in
how the reporting bank 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 Call Report,
amended reports may be required if a bank's primary federal bank supervisory authority determines that
the reports as previously submitted contain errors that are material for the reporting bank. Materiality is a
qualitative characteristic of accounting information that is addressed in FASB Concepts Statement No. 8,
“Conceptual Framework for Financial Reporting,” as follows: "Information is material if omitting it or
misstating it could influence decisions that users make on the basis of the financial information of a
specific reporting entity. In other words, materiality is an entity-specific aspect of relevance based on the
nature or magnitude or both of the items to which the information relates in the context of an individual
entity’s financial report."
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RETENTION OF REPORTS
In general, a bank should maintain in its files a signed and attested record of its completed Call Report,
including any amended reports, and the related workpapers and supporting documentation 1 for three
years after the report date, unless any applicable state requirements mandate a longer retention period.
This three-year time period is consistent with the time period specified in Section 7(b)(4) of the Federal
Deposit Insurance Act, which provides that each insured depository institution shall maintain all records
that the FDIC may require for verifying the correctness of any deposit insurance assessment on the
institution until the later of the end of the three-year period beginning on the due date of the assessment,
or in the case of a dispute between the insured depository institution and the FDIC with respect to such
assessment, the date of a final determination of any such dispute.
SCOPE OF THE "CONSOLIDATED BANK" REQUIRED TO BE REPORTED IN THE SUBMITTED
REPORTS
In their Call Reports submitted to the federal bank supervisory agencies, banks and their subsidiaries
shall present their financial condition and results of operations on a consolidated basis in accordance with
U.S. generally accepted accounting principles (GAAP). All majority-owned subsidiaries shall be
consolidated unless either the subsidiary is not "significant" or control of the subsidiary does not rest with
the parent bank (see "Exclusions from the Coverage of the Consolidated Report" below). See the
Glossary entry for "subsidiaries" for the definition of "significant subsidiary." Accordingly, in the Call Report
for a bank with domestic offices only, the bank shall consolidate the operations of:
(1) The bank's head office;
(2) All branches of the bank;
(3) All domestic majority-owned subsidiaries that are "significant," including domestic subsidiaries that
are commercial banks, savings banks, or savings and loan associations that must file separate
Call Reports (or separate reports of a comparable nature) with any state or federal financial
institutions supervisory authority;
(4) All nonsignificant domestic majority-owned subsidiaries that the bank has elected to consolidate on a
consistent basis in both the Consolidated Report of Condition and the Consolidated Report of
Income; and
(5) All variable interest entities (VIEs) in which the bank, or a consolidated subsidiary of the bank, has a
controlling financial interest and, thus, is the primary beneficiary. For further information, refer to the
Glossary entry for “variable interest entity.”
Each bank shall account for any investments in unconsolidated subsidiaries, associated companies, and
those corporate joint ventures over which the bank exercises significant influence according to the equity
method of accounting. The equity method of accounting is described in the instructions for Schedule RC,
item 8. (Refer to the Glossary entry for "subsidiaries" for the definitions of the terms subsidiary,
associated company, and corporate joint venture.)
Exclusions from the Coverage of the Consolidated Report
Subsidiaries where control does not rest with the parent – If control of a majority-owned subsidiary
does not rest with the parent bank because of legal or other reasons (e.g., the subsidiary is in
1
Supporting documentation may include, but is not limited to, overdraft reports, trust department records, and records
of other material adjustments to deposits.
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bankruptcy), the subsidiary is not to be consolidated for purposes of the report.1 Thus, the bank's
investment in such a subsidiary is not eliminated in consolidation but will be reflected in the report
in the balance sheet item for "Investments in unconsolidated subsidiaries and associated companies"
(Schedule RC, item 8) or “Direct and indirect investments in real estate ventures” (Schedule RC, item 9),
as appropriate. Other transactions of the bank with such a subsidiary will be reflected in the appropriate
items of the report in the same manner as transactions with unrelated outside parties. Additional
guidance on this topic is provided in accounting standards, including ASC Subtopic 810-10, Consolidation
– Overall (formerly FASB Statement No. 94, “Consolidation of All Majority-Owned Subsidiaries”).
Trust accounts – For purposes of the Call Report, the reporting bank's trust department is not to be
consolidated into the reporting bank's balance sheet or income statement. However, information
concerning the bank’s trust activities must be reported in Schedule RC-T, Fiduciary and Related
Services. Assets held in or administered by the bank's trust department and the income earned on such
assets are excluded from all of the other schedules of the Call Report except when trust funds are
deposited by the trust department of the reporting bank in the commercial or some other department of
the reporting bank.
When such trust funds are deposited in the bank, they are to be reported as deposit liabilities in
Schedule RC-E in the deposit category appropriate to the beneficiary. Interest paid by the bank on such
deposits is to be reported as part of the reporting bank's interest expense.
However, there are two exceptions:
(1) Uninvested trust funds (cash) held in the bank's trust department, which are not included on the
balance sheet of the reporting bank, must be reported in Schedule RC-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 are to be reported in the bank's income statement (Schedule RI) on a gross basis as
if part of the consolidated bank.
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 on any
basis in the balance sheet of the Consolidated Report of Condition unless cash funds held by the bank in
safekeeping for customers are commingled with the general assets of the reporting bank. In such cases,
the commingled funds would be reported in the Consolidated Report of Condition as deposit liabilities of
the bank.
RULES OF CONSOLIDATION
For purposes of these reports, all offices (i.e., branches, subsidiaries, and VIEs) that are within the scope
of the consolidated bank as defined above are to be reported on a consolidated basis. Unless the
instructions specifically state otherwise, this consolidation shall be on a line-by-line basis, according to
the caption shown. As part of the consolidation process, the results of all transactions and all
intercompany balances (e.g., outstanding asset/debt relationships) between offices, subsidiaries, and
other entities included in the scope of the consolidated bank are to be eliminated in the consolidation and
must be excluded from the Call Report. (For example, eliminate in the consolidation (1) loans made by
1
In contrast, by definition, control of a VIE is deemed to rest with the parent if the parent or its consolidated
subsidiary has a controlling financial interest in the VIE and, thus, is the primary beneficiary, in which case the VIE
must be consolidated for purposes of the Call Report.
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the bank to a consolidated subsidiary and the corresponding liability of the subsidiary to the bank,
(2) a consolidated subsidiary's deposits in the bank and the corresponding cash or interest-bearing asset
balance of the subsidiary, and (3) the intercompany interest income and expense related to such loans
and deposits of the bank and its consolidated subsidiary.)
Exception: For purposes of reporting the total assets of captive insurance and reinsurance subsidiaries in
Schedule RC-M, Memoranda, items 14.a and 14.b, only, banks should measure the subsidiaries’ total
assets before eliminating intercompany transactions between the consolidated subsidiary and other
offices or subsidiaries of the consolidated bank. Otherwise, captive insurance and reinsurance
subsidiaries should be reported on a consolidated basis as described in the preceding paragraph.
Subsidiaries of subsidiaries – For a subsidiary of a bank which is in turn the parent of one or more
subsidiaries:
(1) Each subsidiary shall consolidate its majority-owned subsidiaries in accordance with the
consolidation requirements set forth above.
(2) Each subsidiary shall account for any investments in unconsolidated subsidiaries, corporate joint
ventures over which the bank exercises significant influence, and associated companies according to
the equity method of accounting.
Noncontrolling (minority) interests – A noncontrolling interest, sometimes called a minority interest, is the
portion of equity in a bank’s subsidiary not attributable, directly or indirectly, to the parent bank. Report
noncontrolling interests in the reporting bank's consolidated subsidiaries in Schedule RC, item 27.b,
"Noncontrolling (minority) interests in consolidated subsidiaries," of the Consolidated Report of Condition.
Report the portion of consolidated net income reported in Schedule RI, item 12, that is attributable to
noncontrolling interests in consolidated subsidiaries of the bank in Schedule RI, item 13, of the
Consolidated Report of Income.
Deposit insurance assessments – When one FDIC-insured institution that files the FFIEC 051 owns
another FDIC-insured institution as a subsidiary, the parent institution should complete items 1 through 11
(except item 9.a) and Memorandum items 1 through 3 of Schedule RC-O by accounting for the insured
institution subsidiary under the equity method of accounting instead of consolidating it, i.e., on an
“unconsolidated single FDIC certificate number basis.” (However, an FDIC-insured institution that owns
another FDIC-insured institution should complete item 9.a of Schedule RC-O by consolidating its
subsidiary institution.) In contrast, when an FDIC-insured institution consolidates entities other than
FDIC-insured institutions for purposes of Schedule RC, Balance Sheet, the parent institution should
complete items 1 through 11 and Memorandum items 1 through 3 of Schedule RC-O on a consolidated
basis with respect to these other entities. However, all deposits of subsidiaries (except an insured
depository institution subsidiary) that are consolidated and, therefore, eliminated from reported deposits
on the balance sheet (Schedule RC, item 13.a) must be reported in Schedule RC-O, items 1 and 2 and
Memorandum items 1 and 2, as appropriate. Similarly, the interest accrued and unpaid on these
deposits, which is eliminated in consolidation from reported other liabilities on the balance sheet
(Schedule RC, item 20), also must be reported in these Schedule RC-O items.
Cutoff dates for consolidation – All branches must be consolidated as of the report date. For purposes of
consolidation, the date of the financial statements of a subsidiary should, to the extent practicable,
match the report date of the parent bank, but in no case differ by more than 93 days from the report date.
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PUBLICATION REQUIREMENTS FOR THE CONSOLIDATED REPORT OF CONDITION
There are no federal requirements for a bank to publish the balance sheet of the Consolidated Report of
Condition in a newspaper. However, state-chartered banks should consult with their state banking
authorities concerning the applicability of any state publication requirements.
RELEASE OF INDIVIDUAL BANK REPORTS
All schedules of the FFIEC 051 Call Report submitted by each reporting bank, including the optional
narrative statement at the end of the Call Report, are available to the public from the federal bank
supervisory agencies with the exception of any amounts reported in Schedule RI-E, item 2.g, “FDIC
deposit insurance assessments,” and, for report dates beginning June 30, 2020, in Schedule RC-C,
Part I, Memorandum items 17.a and 17.b, for eligible loan modifications under Section 4013 of the 2020
Coronavirus Aid, Relief, and Economic Security Act. Refer to the discussion of “Release of Individual
Bank Reports” in the General Instructions section of the instructions for the FFIEC 031 and FFIEC 041
Call Reports for information on items reported in the FFIEC 041 Call Report before the March 2017
implementation of the FFIEC 051 Call Report that are not publicly disclosed on an individual bank basis.
All publicly available individual institution data are posted on the FFIEC’s Central Data Repository (CDR)
Public Data Distribution website (https://cdr.ffiec.gov/public/) as soon as the data have been submitted,
placed in an accepted status, and prepared for publication in the CDR.
A reporting institution may request confidential treatment for some or all of the portions of the Call Report
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 (Federal Reserve Board), 12 CFR 309.6 (FDIC), or as otherwise provided by law.
APPLICABILITY OF U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO REGULATORY
REPORTING REQUIREMENTS
For recognition and measurement purposes, the regulatory reporting requirements applicable to the
Call Report shall conform to U.S. generally accepted accounting principles (GAAP) as set forth in the
FASB’s Accounting Standards Codification. Nevertheless, because the Call Report is an institution-level
report, each institution (together with its consolidated subsidiaries) is considered an "accounting entity"
for regulatory reporting purposes and normally must prepare its Call Report on a separate entity basis.
A bank or savings association that is a private company, as defined in U.S. GAAP (and discussed in the
Glossary entry for “public business entity”), is permitted to use private company accounting alternatives
issued by the FASB when preparing its Call Reports, except as provided in Section 37(a) of the Federal
Deposit Insurance Act (12 U.S.C. 1831n(a)) as described in the following sentence. If the banking
agencies determine that a particular accounting principle within U.S. GAAP, including a private company
accounting alternative, is inconsistent with the statutorily specified supervisory objectives, the banking
agencies may prescribe an accounting principle for regulatory reporting purposes that is no less stringent
than U.S. GAAP. In such a situation, an institution would not be permitted to use that particular private
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company accounting alternative or other accounting principle within U.S. GAAP for Call Report purposes.
The banking agencies would provide appropriate notice if they were to disallow any such accounting
alternative or accounting principle under the statutory process.
When reporting events and transactions not covered in principle by Call Report instructions or
authoritative U.S. GAAP standards, institutions are encouraged to discuss the event or transaction with
their primary federal bank supervisory agency. However, regardless of whether an institution discusses a
reporting issue with its supervisory agency, when an institution's supervisory agency'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 institution's interpretation, the supervisory agency may require the institution
to reflect the event(s) or transaction(s) in its Call Report in accordance with the agency's interpretation
and to amend previously submitted reports.
The Call Report instructions 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. Current
Call Report instructions providing such specific reporting guidance include the nonaccrual rules in the
Glossary entry for "Nonaccrual Status," the treatment of impaired collateral dependent loans in the
Glossary entry for "Loan Impairment," the Glossary entry for the "Allowance for Loan and Lease Losses"
which references the 2006 Interagency Policy Statement on this subject, the separate entity method of
accounting for income taxes of depository institution subsidiaries of holding companies in the Glossary
entry for "Income Taxes," and the treatment of property dividends in the Glossary entry for "Dividends."
Certain provisions of AICPA Statement of Position (SOP) No. 92-3, “Accounting for Foreclosed Assets,”
have been incorporated into the Glossary entry for “Foreclosed Assets,” which institutions must follow for
Call Report purposes, even though SOP 92-3 was rescinded subsequent to the issuance of ASC
Topic 360, Property, Plant, and Equipment (formerly FASB Statement No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets”). The application of these provisions of SOP 92-3
represents prevalent practice in the banking industry and is consistent with safe and sound banking
practices and the accounting objectives set forth in Section 37(a) of the Federal Deposit Insurance Act
(12 U.S.C. 1831n(a)).
There may be areas in which an institution 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 U.S.
GAAP standards. Selected sections of the U.S. GAAP standards are referenced in the instructions where
appropriate. The accounting entries in the Glossary are intended to serve as an aid in specific reporting
situations rather than as a comprehensive statement on accounting for depository institutions.
Subsequent Events
Subsequent events are events or transactions that occur after the Call Report balance sheet date, e.g.,
December 31, but before the Call Report is filed. Consistent with ASC Topic 855, Subsequent Events
(formerly FASB Statement No. 165, “Subsequent Events”), an institution shall recognize in the Call
Report the effects of all subsequent events (not addressed in other ASC Topics) that provide additional
evidence about conditions that existed at the date of the Call Report balance sheet (Schedule RC),
including the estimates inherent in the process of preparing the Call Report, e.g., a loss that has been
incurred but not yet confirmed as of the Call Report balance sheet date.
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ACCRUAL BASIS REPORTING
All banks, regardless of size, shall prepare all schedules of the Call Report on an accrual basis.
However, banks may report particular accounts on a cash basis, except for the four listed below, if the
results would not materially differ from those obtained using an accrual basis.
All banks must report the following on an accrual basis:
(1) Income from installment loans;
(2) Amortization of premiums paid on held-to-maturity and available-for-sale securities (see the Glossary
entry for "premiums and discounts");
(3) Income taxes (see the Glossary entry for "income taxes"); and
(4) Depreciation on premises and fixed assets.
All banks shall establish and maintain an allowance for loan and lease losses at a level that is appropriate
to cover estimated credit losses associated with its held-for-investment loan and lease portfolio.
Accounting for loan and lease losses is discussed in more detail in the Glossary entries for "allowance for
loan and lease losses" and “loan impairment.”
No interest or discount shall be accrued on any asset which must be carried in nonaccrual status. Refer
to the Glossary entry for "nonaccrual status" for further information.
MISCELLANEOUS GENERAL INSTRUCTIONS
Rounding
On the FFIEC 051 Call Report, all dollar amounts must be reported in thousands, with the figures rounded
to the nearest thousand. Items less than $500 will be reported as zero.
Rounding may result in details not adding to their stated totals. The only permissible differences between
totals and the sums of their components are those attributable to the mechanics of rounding.
On the Consolidated Report of Condition, Schedule RC, item 12, "Total assets," and Schedule RC,
item 29, "Total liabilities and equity capital," which must be equal, must be derived.
Negative Entries
Except for the items listed below, negative entries are not appropriate on the Consolidated Report of
Condition and shall not be reported. Hence, assets with credit balances must be reported in liability items
and liabilities with debit balances must be reported in asset items, as appropriate, and in accordance with
these instructions. The Consolidated Report of Condition items for which negative entries may be made, if
appropriate, are:
(1) Schedule RC:
item 8, "Investments in unconsolidated subsidiaries and associated companies,"
item 9, “Direct and indirect investments in real estate ventures,”
item 26.a, "Retained earnings,"
item 26.b, "Accumulated other comprehensive income,"
item 26.c, “Other equity capital components,”
item 27.a, “Total bank equity capital,” and
item 28, “Total equity capital.”
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(2) Schedule RC-C, item 10, on "Lease financing receivables (net of unearned income)," and
Memorandum item 13.b, on “Amount of interest capitalized from interest reserves on construction,
land development, and other land loans that is included in interest and fee income on loans during the
quarter.”
(3) Schedule RC-R:
Part I, item 2, “Retained earnings,”
Part I, item 3, “Accumulated other comprehensive income (AOCI),”
Part I, items 9.a through 9.f, AOCI-related adjustments,
Part I, items 10.a and 10.b, Other deductions from (additions to) common equity tier 1 capital
before threshold-based deductions,
Part I, item 12, "Subtotal,"
Part I, item 19, “Common equity tier 1 capital,”
Part I, item 26, "Tier 1 capital,"
Part I, item 29, “Other deductions from (additions to) assets for leverage ratio purposes,”
Part I, item 31, “Leverage ratio,”
Part I, items 47.a and 47.b, "Total capital,"
Part I, items 49 through 51, Risk-based capital ratios,
Part I, item 53, “Eligible retained income,” and
Part II, column B, “Adjustments to Totals Reported in Column A,” for the asset categories in
items 1 through 11.
When negative entries do occur in one or more of these items, they must be reported with a minus (-) sign
rather than in parentheses.
On the Consolidated Report of Income, negative entries may appear as appropriate.1 Income items with a
debit balance and expense items with a credit balance must be reported with a minus (-) sign.
Verification
All addition and subtraction should be double-checked before reports are submitted. Totals and subtotals
in supporting materials should be cross-checked to corresponding items elsewhere in the reports.
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 submitted reports.
Banks should retain workpapers and other records used in the preparation of these reports.
Transactions Occurring Near the End of a Reporting Period
Transactions between banks occurring near the end of a reporting period may not be reported by the
parties to the transaction in such a manner as to cause the asset (or liability) either to disappear entirely
from the Consolidated Reports of Condition submitted for that report date or to appear on both of the
submitted reports, regardless of the time zones in which the banks are located, the time zone in which the
transaction took place, or the actual zone clock times at the effective moment of the transaction.
In the case of a transaction occurring in different reporting periods for the parties because of time zone
differences, the parties may decide between themselves on the reporting period in which they will all,
1 In addition, in Schedule SU—Supplemental Information, negative entries may be reported for item 3.c, “Year-to-date
net gains (losses) recognized in earnings on fair value option assets,” and item 3.d, “Year-to-date net gains (losses)
recognized in earnings on fair value option liabilities.”
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consistently, report the transaction as having occurred, so that in any given reporting period, the asset (or
liability) transferred will appear somewhere and without duplication in the reports submitted by the parties
to the transaction.
If, in such cases, the parties do not agree on the reporting period in which the transaction is to be treated
as having occurred on the reports of all parties, i.e., if they do not agree on which party will reflect the
asset (or liability) on its reports for these purposes, the transaction will be deemed to have occurred prior
to midnight in the time zone of the buyer (or transferee) and must be reported accordingly by all parties to
the transaction.
If, in fact, the parties, in their submitted reports, treat the transaction as having occurred in different
reporting periods, the parties will be required to amend their submitted reports on the basis of the
standard set forth in the preceding paragraph.
LEGAL ENTITY IDENTIFIER
The Legal Entity Identifier (LEI) is a 20-digit alpha-numeric code that uniquely identifies entities that
engage in financial transactions. An institution must provide its LEI on the cover page of the Call Report
only if the institution already has an LEI. The LEI must be a currently issued, maintained, and valid LEI,
not an LEI that has lapsed. An institution that does not have an LEI is not required to obtain one for
purposes of reporting it on the Call Report.
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LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF
INCOME
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions. See the discussion of the Organization of the Instruction Books in the General Instructions.
For purposes of these Consolidated Report of Income instructions, the Financial Accounting Standards
Board (FASB) Accounting Standards Codification is referred to as the “ASC.”
SCHEDULE RI – INCOME STATEMENT
General Instructions
Report in accordance with these instructions all income and expense of the bank for the calendar
year-to-date. Include adjustments of accruals and other accounting estimates made shortly after the end
of a reporting period which relate to the income and expense of the reporting period.
A bank that began operating during the year-to-date reporting period should report in the appropriate
items of Schedule RI all income earned and expenses incurred since commencing operations. The bank
should report pre-opening income earned and expenses incurred from inception until the date operations
commenced using one of the two methods described in the Glossary entry for "start-up activities."
Business Combinations, Pushdown Accounting Transactions, and Transactions between Entities under
Common Control – If the reporting institution entered into a business combination that became effective
during the year-to-date reporting period and has been accounted for under the acquisition method, report
the income and expense of the acquired institution or business only after its acquisition. If the reporting
institution was acquired in a transaction that became effective during the reporting period, retained its
separate corporate existence, and elected to apply pushdown accounting in its separate financial
statements (including its Consolidated Reports of Condition and Income), Schedule RI should only
include amounts from the date of the institution’s acquisition through the end of the year-to-date reporting
period. If the reporting institution was involved in a transaction between entities under common control
that became effective during the year-to-date reporting period and has been accounted for in a manner
similar to a pooling of interests, report the income and expense of the combined entities for the entire
calendar year-to-date as though they had combined at the beginning of the year. For further information
on business combinations, pushdown accounting, and transactions between entities under common
control, see the Glossary entry for "business combinations."
Assets and Liabilities Accounted for under the Fair Value Option – Under U.S. generally accepted
accounting principles (GAAP) (i.e., ASC Subtopic 825-10, Financial Instruments – Overall (formerly
FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”), ASC
Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives (formerly FASB Statement No. 155,
“Accounting for Certain Hybrid Financial Instruments”), and ASC Subtopic 860-50, Transfers and
Servicing – Servicing Assets and Liabilities (formerly FASB Statement No. 156, “Accounting for Servicing
of Financial Assets”)), the bank may elect to report certain assets and liabilities at fair value with changes
in fair value recognized in earnings. This election is generally referred to as the fair value option. If the
bank has elected to apply the fair value option to interest-bearing financial assets and liabilities, it should
report the interest income on these financial assets (except any that are in nonaccrual status) and the
interest expense on these financial liabilities for the year-to-date in the appropriate interest income and
interest expense items on Schedule RI, not as part of the reported change in fair value of these assets
and liabilities for the year-to-date. The bank should measure the interest income or interest expense on a
financial asset or liability to which the fair value option has been applied using either the contractual
interest rate on the asset or liability or the effective yield method based on the amount at which the asset
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General Instructions (cont.)
or liability was first recognized on the balance sheet. Although the use of the contractual interest rate is
an acceptable method under GAAP, when a financial asset or liability has a significant premium or
discount upon initial recognition, the measurement of interest income or interest expense under the
effective yield method more accurately portrays the economic substance of the transaction. In addition, in
some cases, GAAP requires a particular method of interest income recognition when the fair value option
is elected. For example, when the fair value option has been applied to a beneficial interest in securitized
financial assets within the scope of ASC Subtopic 325-40, Investments-Other – Beneficial Interests in
Securitized Financial Assets (formerly Emerging Issues Task Force Issue No. 99-20, “Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial
Assets”), interest income should be measured in accordance with this Subtopic. Similarly, when the fair
value option has been applied to a purchased impaired loan or debt security accounted for under 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”), interest income on the loan or debt security should be measured in accordance with this
Subtopic when accrual of income is appropriate. For further information, see the Glossary entry for
“Purchased Impaired Loans and Debt Securities.”
Revaluation adjustments, excluding amounts reported as interest income and interest expense, to the
carrying value of all assets and liabilities reported in Schedule RC at fair value under a fair value option
(excluding servicing assets and liabilities reported in Schedule RC, item 10, “Intangible assets,” and
Schedule RC, item 20, “Other liabilities,” respectively) resulting from the periodic marking of such
assets and liabilities to fair value should be reported as “Other noninterest income” in Schedule RI,
item 5.l. However, an institution should report in Schedule RI-A, item 10, “Other comprehensive income,”
the portion of the total change in the fair value of a liability resulting from a change in the instrumentspecific credit risk (“own credit risk”) when the institution has elected to measure the liability at fair value
in accordance with the fair value option for financial instruments.
Item Instructions
Item No.
Caption and Instructions
1
Interest income:
1.a
Interest and fee income on loans. Report in the appropriate subitem all interest, fees, and
similar charges levied against or associated with all assets reportable as loans in
Schedule RC-C, Part I, items 1 through 9.
Deduct interest rebated to customers on loans paid before maturity from gross interest
earned on loans; do not report as an expense.
Include as interest and fee income on loans:
(1) Interest on all assets reportable as loans extended directly, purchased from others, sold
under agreements to repurchase, or pledged as collateral for any purpose.
(2) Loan origination fees, direct loan origination costs, and purchase premiums and
discounts on loans held for investment, all of which should be deferred and recognized
over the life of the related loan as an adjustment of yield in accordance with 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”) as described in the
Glossary entry for "loan fees." See exclusion (3) below.
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Item No.
Caption and Instructions
1.a
(cont.)
(3) Loan commitment fees (net of direct loan origination costs) that must be deferred over the
commitment period and recognized over the life of the related loan as an adjustment of
yield under ASC Subtopic 310-20 as described in the Glossary entry for "loan fees."
(4) Investigation and service charges, fees representing a reimbursement of loan processing
costs, renewal and past-due charges, prepayment penalties, and fees charged for the
execution of mortgages or agreements securing the bank's loans.
(5) Charges levied against overdrawn accounts based on the length of time the account has
been overdrawn, the magnitude of the overdrawn balance, or which are otherwise
equivalent to interest. See exclusion (6) below.
(6) Interest income earned on loans that are reported at fair value under a fair value option.
Exclude from interest and fee income on loans:
(1) Fees for servicing real estate mortgages or other loans that are not assets of the bank
(report in Schedule RI, item 5.f, "Net servicing fees").
(2) Charges to merchants for the bank's handling of credit card or charge sales when the
bank does not carry the related loan accounts on its books (report as "Other noninterest
income" in Schedule RI, item 5.l). Banks may report this income net of the expenses
(except salaries) related to the handling of these credit card or charge sales.
(3) Loan origination fees, direct loan origination costs, and purchase premiums and
discounts on loans held for sale, all of which should be deferred until the loan is sold
(rather than amortized). The net fees or costs and purchase premium or discount are
part of the recorded investment in the loan. When the loan is sold, the difference
between the sales price and the recorded investment in the loan is the gain or loss on the
sale of the loan. See exclusion (4) below.
(4) Net gains (losses) from the sale of all assets reportable as loans (report in Schedule RI,
item 5.i, “Net gains (losses) on sales of loans and leases”). Refer to the Glossary entry
for "transfers of financial assets."
(5) Reimbursements for out-of-pocket expenditures (e.g., for the purchase of fire insurance
on real estate securing a loan) made by the bank for the account of its customers. If the
bank's expense accounts were charged with the amount of such expenditures, the
reimbursements should be credited to the same expense accounts.
(6) Transaction or per item charges levied against deposit accounts for the processing of
checks drawn against insufficient funds that the bank assesses regardless of whether it
decides to pay, return, or hold the check, so-called "NSF check charges" (report as
"Service charges on deposit accounts," in Schedule RI, item 5.b). See inclusion (5)
above.
(7) Interchange fees earned from credit card transactions (report as “Other noninterest
income” in Schedule RI, item 5.l).
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Item No.
Caption and Instructions
1.a.(1)
Interest and fee income on loans secured by real estate:
1.a.(1)(a)
Interest and fee income on loans secured by 1-4 family residential properties. Report
all interest, fees, and similar charges levied against or associated with all loans secured by
1-4 family residential properties reportable in Schedule RC-C, Part I, item 1.c.
1.a.(1)(b)
Interest and fee income on all other loans secured by real estate. Report all interest,
fees, and similar charges levied against or associated with all loans secured by real estate
reportable in Schedule RC-C, Part I, items 1.a, 1.b, 1.d, and 1.e. Include interest and fee
income on loans secured by 1-4 family residential construction loans, but exclude such
income on all other loans secured by 1-4 family residential properties.
1.a.(2)
Interest and fee income on commercial and industrial loans. Report all interest, fees,
and similar charges levied against or associated with all loans reportable in Schedule RC-C,
Part I, item 4, "Commercial and industrial loans."
1.a.(3)
Interest and fee income on loans to individuals for household, family, and other
personal expenditures. Report in the appropriate subitem all interest, fees, and similar
charges levied against or associated with all loans reportable in Schedule RC-C, Part I,
item 6, "Loans to individuals for household, family, and other personal expenditures."
1.a.(3)(a)
Interest and fee income on credit cards. Report all interest, fees, and similar charges
levied against or associated with all extensions of credit to individuals for household, family,
and other personal expenditures arising from credit cards reportable in Schedule RC-C, Part
I, item 6.a, "Credit cards." Include in this item any reversals of uncollectible credit card fees
and finance charges and any additions to a contra-asset account for uncollectible credit card
fees and finance charges that the bank maintains and reports separately from its allowance
for loan and lease losses.
Exclude annual or other periodic fees paid by holders of credit cards issued by the bank
(report in Schedule RI, item 5.l, "Other noninterest income").
1.a.(3)(b)
Interest and fee income on other loans to individuals for household, family, and other
personal expenditures. Report all interest, fees, and similar charges levied against or
associated with all other loans to individuals for household, family, and other personal
expenditures reportable in Schedule RC-C, Part I, item 6.b, "Other revolving credit plans,"
item 6.c, “Automobile loans,” and item 6.d, “Other consumer loans.”
1.a.(4)
Not applicable.
1.a.(5)
Interest and fee income on all other loans. Report interest, fees, and similar charges
levied against or associated with loans reportable in Schedule RC-C, Part I, item 2, “Loans to
depository institutions and acceptances of other banks,” item 3, “Loans to finance agricultural
production and other loans to farmers,” item 8, “Obligations (other than securities and leases)
of states and political subdivisions in the U.S.,” and item 9, “Loans to nondepository financial
institutions and other loans.”
1.a.(6)
Total interest and fee income on loans. Report the sum of items 1.a.(1) through 1.a.(5).
1.b
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Income from lease financing receivables. Report all income from leases reportable in
Schedule RC-C, Part I, item 10, "Lease financing receivables (net of unearned income)."
(See the Glossary entry for "lease accounting.")
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Item No.
Caption and Instructions
1.b
(cont.)
Include income from:
(1) Direct financing leases accounted for under ASC Topic 840, Leases, by an institution that
has not adopted ASC Topic 842, Leases;
(2) Direct financing and sales-type leases accounted for under ASC Topic 842 by an
institution that has adopted ASC Topic 842; and
(3) Leveraged leases accounted for under ASC Topic 840 (including leveraged leases that
were grandfathered upon the adoption of ASC Topic 842 and remain grandfathered).
Exclude from income from lease financing receivables:
(1) Any investment tax credits associated with leased property (include in Schedule RI,
item 9, "Applicable income taxes (on item 8.c)").
(2) Provisions for losses on leases (report in Schedule RI, item 4, "Provision for loan and
lease losses").
(3) Rental fees applicable to operating leases for furniture and equipment rented to others
(report as "Other noninterest income" in Schedule RI, item 5.l).
1.c
Interest income on balances due from depository institutions. Report all income on
assets reportable in Schedule RC, item 1.b, “Interest-bearing balances due from depository
institutions,” including interest-bearing balances maintained to satisfy reserve balance
requirements, excess balances, and term deposits due from Federal Reserve Banks. Include
interest income earned on interest-bearing balances due from depository institutions that are
reported at fair value under a fair value option.
1.d
Interest and dividend income on securities. Report in the appropriate subitem all income
on debt securities that are reportable in Schedule RC-B, Securities. Include accretion of
discount and deduct amortization of premium on debt securities. Refer to the Glossary entry
for "premiums and discounts."
Also include dividend income on equity securities with readily determinable fair values not
held for trading that are reportable in Schedule RC, item 2.c.
Include interest on debt securities held in the bank's held-to-maturity and available-for-sale
portfolios and dividends on equity securities with readily determinable fair values not held for
trading, even if such securities have been lent, sold under agreements to repurchase that are
treated as borrowings, or pledged as collateral for any purpose.
Include interest received at the sale of debt securities to the extent that such interest had not
already been accrued on the bank's books.
Do not deduct accrued interest included in the purchase price of debt securities from income
on securities and do not charge to expense. Record such interest in a separate asset
account (to be reported in Schedule RC, item 11, "Other assets") to be offset upon collection
of the next interest payment.
Report income from detached U.S. Government security coupons and ex-coupon
U.S. Government securities not held for trading in Schedule RI, item 1.d.(3), as interest and
dividend income on "All other securities." Refer to the Glossary entry for "coupon stripping,
Treasury receipts, and STRIPS."
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Item No.
Caption and Instructions
1.d
(cont.)
Exclude from interest and dividend income on securities:
(1) Realized gains (losses) on held-to-maturity securities and on available-for-sale debt
securities (report in Schedule RI, items 6.a and 6.b, respectively).
(2) Net unrealized holding gains (losses) on available-for-sale debt securities (include the
amount of such net unrealized holding gains (losses) in Schedule RC, item 26.b,
“Accumulated other comprehensive income,” and the calendar year-to-date change in
such net unrealized holding gains (losses) in Schedule RI-A, item 10, “Other
comprehensive income”).
(3) The year-to-date change in net unrealized gains (losses), and any realized gains
(losses), on equity securities with readily determinable fair values not held for trading
(report in Schedule RI, item 8.b).
(4) Income from advances to, or obligations of, majority-owned subsidiaries not consolidated,
associated companies, and those corporate joint ventures over which the bank exercises
significant influence (report as "Noninterest income" in the appropriate subitem of
Schedule RI, item 5).
1.d.(1)
Interest and dividend income on U.S. Treasury securities and U.S. Government agency
obligations (excluding mortgage-backed securities). Report income from all securities
reportable in Schedule RC-B, item 1, “U.S. Treasury securities,” and item 2,
“U.S. Government agency obligations.” Include accretion of discount on U.S. Treasury bills.
1.d.(2)
Interest and dividend income on mortgage-backed securities. Report income from all
securities reportable in Schedule RC-B, item 4, “Mortgage-backed securities.”
1.d.(3)
Interest and dividend income on all other securities. Report income from all securities
reportable in Schedule RC-B, item 3, “Securities issued by states and political subdivisions
in the U.S.,” item 5, “Asset-backed securities and structured financial products,” and item 6,
“Other debt securities.” Also include dividend income from all securities reportable in
Schedule RC, item 2.c, “Equity securities with readily determinable fair values not held for
trading.”
Exclude from interest and dividend income on all other securities:
(1) Income from equity securities that do not have readily determinable fair values (report
as “Other interest income” in Schedule RI, item 1.g).
(2) The bank’s proportionate share of the net income or loss from its investments in the stock
of unconsolidated subsidiaries, associated companies, and those corporate joint ventures
over which the bank exercises significant influence (report income or loss before
discontinued operations as “Noninterest income” in the appropriate subitem of
Schedule RI, item 5, and report the results of discontinued operations in Schedule RI,
item 11).
1.e
Not applicable.
1.f
Interest income on federal funds sold and securities purchased under agreements to
resell. Report the gross revenue from assets reportable in Schedule RC, item 3, "Federal
funds sold and securities purchased under agreements to resell." Include interest income
earned on federal funds sold and securities purchased under agreements to resell that are
reported at fair value under a fair value option.
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Item No.
Caption and Instructions
1.f
(cont.)
Report the expense of federal funds purchased and securities sold under agreements to
repurchase in Schedule RI, item 2.b; do not deduct from the gross revenue reported in this
item. However, if amounts recognized as payables under repurchase agreements have
been offset against amounts recognized as receivables under reverse repurchase
agreements and reported as a net amount in Schedule RC, Balance Sheet, in accordance
with ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41,
“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase
Agreements”), the income and expense from these agreements may be reported on a net
basis in Schedule RI, Income Statement.
1.g
Other interest income. Report interest and dividend income on assets other than those
assets properly reported in Schedule RC, items 1 through 4. Include interest income on
receivables arising from foreclosures on fully and partially government-guaranteed mortgage
loans that are reportable in Schedule RC-F, item 6. Include dividend income on “Equity
investments without readily determinable fair values” that are reportable in Schedule RC-F,
item 4. Also include interest income on interest-only strips receivable (not in the form of a
security) that are reportable in Schedule RC-F, item 3. However, exclude interest and
dividends on venture capital investments (loans and securities), which should be reported in
item 5.l, below.
Include interest income on trading assets that are reportable in Schedule RC, item 5,
including accretion of discount on assets held for trading that have been issued on a discount
basis, such as U.S. Treasury bills and commercial paper.
Exclude gains (losses) and fees from trading assets, which should be reported as trading
revenue in Schedule RI, item 5.l, “Other noninterest income.” Also exclude revaluation
adjustments from the periodic marking to fair value of derivative contracts held for trading
purposes, which should be reported as trading revenue in Schedule RI, item 5.l. The effect of
the periodic net settlements on these derivative contracts should be included as part of the
revaluation adjustments from the periodic marking to market of the contracts.
1.h
Total interest income. Report the sum of items 1.a.(6) through 1.g.
2
Interest expense:
2.a
Interest on deposits. Report in the appropriate subitem all interest expense, including
amortization of the cost of merchandise or property offered in lieu of interest payments, on
deposits reportable in Schedule RC, item 13.a.(2), "Interest-bearing deposits in domestic
offices,".
Exclude the cost of gifts or premiums (whether in the form of merchandise, credit, or cash)
given to depositors at the time of the opening of a new account or an addition to, or renewal
of, an existing account (report in Schedule RI, item 7.d, "Other noninterest expense").
Include as interest expense on the appropriate category of deposits finders' fees, brokers'
fees, and other fees related to any type of interest-bearing brokered deposit account
(e.g., money market deposit accounts) that represent an adjustment to the interest rate paid
on deposits the reporting bank acquires through brokers. If these fees are paid in advance
and are material, they should be capitalized and amortized over the term of the related
deposits. However, exclude fees levied by brokers that are, in substance, retainer fees or
that otherwise do not represent an adjustment to the interest rate paid on brokered deposits
(e.g., flat fees to administer the account) (report such fees in Schedule RI, item 7.d, "Other
noninterest expense").
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
2.a
(cont.)
Also include interest expense incurred on deposits that are reported at fair value under a fair
value option. Deposits with demand features (e.g., demand and savings deposits) are
generally not eligible for the fair value option.
Deduct from the gross interest expense of the appropriate category of time deposits penalties
for early withdrawals, or portions of such penalties, that represent the forfeiture of interest
accrued or paid to the date of withdrawal. If material, portions of penalties for early
withdrawals that exceed the interest accrued or paid to the date of withdrawal should not be
treated as a reduction of interest expense but should be included in "Other noninterest
income" in Schedule RI, item 5.l.
2.a.(1)
Interest on transaction accounts. Report interest expense on all interest-bearing
transaction accounts (interest-bearing demand deposits, NOW accounts, ATS accounts,
and telephone and preauthorized transfer accounts) reportable in Schedule RC-E, items 1
through 6, column A, "Total transaction accounts." Exclude all costs incurred by the bank in
connection with noninterest-bearing demand deposits. See the Glossary entry for "deposits"
for the definitions of “interest-bearing deposit accounts,” “demand deposits,” "NOW
accounts," "ATS accounts," and "telephone or preauthorized transfer accounts."
2.a.(2)
Interest on nontransaction accounts. Report in the appropriate subitem interest expense
on all deposits reportable in Schedule RC-E, items 1 through 6, column C, "Total
nontransaction accounts."
2.a.(2)(a)
Interest on savings deposits. Report interest expense on all deposits reportable in
Schedule RC-E, Memorandum item 2.a.(1), "Money market deposit accounts (MMDAs),” and
Memorandum item 2.a.(2), "Other savings deposits."
2.a.(2)(b)
Interest on time deposits of $250,000 or less. Report interest expense on all deposits
reportable in Schedule RC-E, Memorandum item 2.b, "Total time deposits of less than
$100,000," and Memorandum item 2.c, “Total time deposits of $100,000 through $250,000.”
2.a.(2)(c)
Interest on time deposits of more than $250,000. Report interest expense on all deposits
reportable in Schedule RC-E, Memorandum item 2.d, "Total time deposits of more than
$250,000."
2.b
Expense of federal funds purchased and securities sold under agreements to
repurchase. Report the gross expense of all liabilities reportable in Schedule RC, item 14,
"Federal funds purchased and securities sold under agreements to repurchase." Include
interest expense incurred on federal funds purchased and securities sold under agreements
to repurchase that are reported at fair value under a fair value option.
Report the income of federal funds sold and securities purchased under agreements to resell
in Schedule RI, item 1.f; do not deduct from the gross expense reported in this item.
However, if amounts recognized as payables under repurchase agreements have been offset
against amounts recognized as receivables under reverse repurchase agreements and
reported as a net amount in Schedule RC, Balance Sheet, in accordance with ASC Subtopic
210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41, “Offsetting of
Amounts Related to Certain Repurchase and Reverse Repurchase Agreements”), the income
and expense from these agreements may be reported on a net basis in Schedule RI, Income
Statement.
2.c
FFIEC 051
Other interest expense. Report the interest expense on all liabilities reportable in
Schedule RC, item 15, "Trading liabilities"; item 16, "Other borrowed money"; and item 19,
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
2.c
(cont.)
"Subordinated notes and debentures." Include interest expense incurred on other borrowed
money and subordinated notes and debentures reported at fair value under a fair value option.
Include amortization of debt issuance costs associated with other borrowed money and
subordinated notes and debentures (unless these liabilities are reported at fair value under a
fair value option, in which case issuance costs should be expensed as incurred).
Exclude dividends declared or paid on limited-life preferred stock (report dividends declared
in Schedule RI-A, item 8).
2.d
Not applicable.
2.e
Total interest expense. Report the sum of Schedule RI, items 2.a through 2.c.
3
Net interest income. Report the difference between Schedule RI, item 2.e, “Total interest
expense,” and Schedule RI, item 1.h, “Total interest income.” If the amount is negative,
report it with a minus (-) sign.
4
Provision for loan and lease losses. Institutions that have not adopted FASB Accounting
Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit
losses, should report the amount needed to make the allowance for loan and lease losses, as
reported in Schedule RC, item 4.c, adequate to absorb estimated credit losses, based upon
management's evaluation of the reporting institution’s loans and leases held for investment,
excluding such loans and leases reported at fair value under a fair value option. Loans and
leases held for investment are those that the reporting institution has the intent and ability to
hold for the foreseeable future or until maturity or payoff. Also include in this item any
provision for allocated transfer risk related to loans and leases. The amount reported in this
item must equal Schedule RI-B, Part II, item 5, column A, “Provision for credit losses.”
Report negative amounts with a minus (-) sign.
Institutions that have adopted ASU 2016-13 should report amounts expensed as provisions
for credit losses (or reversals of provisions) during the calendar year to date on assets within
the scope of the ASU, i.e., financial assets measured at amortized cost (including loans held
for investment and held-to-maturity debt securities), net investments in leases, and availablefor-sale debt securities. Provisions for credit losses (or reversals of provisions) on financial
assets measured at amortized cost and net investments in leases represent the amounts
necessary to adjust the related allowances for credit losses at the quarter-end report date for
management’s current estimate of expected credit losses on these assets. Provisions for
credit losses (or reversals of provisions) on available-for-sale debt securities represent
changes during the calendar year to date in the amount of impairment related to credit losses
on individual available-for-sale debt securities. Exclude the initial allowance gross-up
amounts established upon the purchase of credit-deteriorated financial assets, which are
recorded at the date of acquisition as an addition to the purchase price to determine the initial
amortized cost basis of the assets. The amount reported in this item must equal the sum of
Schedule RI-B, Part II, item 5, columns A through C, plus Schedule RI-B, Part II,
Memorandum item 5. Report negative amounts with a minus (-) sign.
Exclude any provision for credit losses on off-balance sheet credit exposures, which should
be reported in Schedule RI, item 7.d, “Other noninterest expense.”
The amount reported here may differ from the bad debt expense deduction taken for federal
income tax purposes.
Refer to the Glossary entries for "allowance for loan and lease losses" and “loan impairment”
for additional information.
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RI - INCOME STATEMENT
FFIEC 051
Item No.
RI - INCOME STATEMENT
Caption and Instructions
5
Noninterest income:
5.a
Income from fiduciary activities. Report gross income from services rendered by the
institution’s trust department or any of its consolidated subsidiaries acting in any fiduciary
capacity. Include commissions and fees on sales of annuities by the institution's trust
department (or by a consolidated trust company subsidiary) that are executed in a fiduciary
capacity. For institutions required to complete Schedule RC-T, items 14 through 22, this item
must equal the amount reported in Schedule RC-T, item 22.
Exclude net fiduciary settlements, surcharges, and other losses. Such losses should be
reported on a net basis in Schedule RI, item 7.d, “Other noninterest expense, and, if
applicable, in Schedule RC-T, item 24 and Memorandum item 4. Net losses are gross losses
less recoveries (including those from insurance payments). If the institution’s trust
department or a consolidated subsidiary acting in any fiduciary capacity enters into a “fee
reduction” or “fee waiver” agreement with a client as the method for reimbursing or
compensating the client for a loss on the client’s fiduciary or related services account arising
from an error, misfeasance, or malfeasance, the full amount of this loss must be recognized
on an accrual basis and included in Schedule RI, item 7.d, and, if applicable, in
Schedule RC-T, item 24, and Memorandum item 4. An institution should not report such a
loss as a reduction of the gross income from fiduciary and related services it reports in this
item 5.a and, if applicable, in Schedule RC-T, items 14 through 22, in the current or future
periods when the “fee reduction” or “fee waiver” takes place. (See the example after the
instructions to Schedule RC-T, Memorandum item 4.e.)
Exclude commissions and fees received for the accumulation or disbursement of funds
deposited to Individual Retirement Accounts (IRAs), Keogh Plan accounts, Health Savings
Accounts, Medical Savings Accounts, and Coverdell Education Savings Accounts when they
are not handled by the institution's trust department (report in Schedule RI, item 5.b, "Service
charges on deposit accounts").
Report a zero if the institution has no trust department and no consolidated subsidiaries that
render services in any fiduciary capacity.
5.b
Service charges on deposit accounts. Report in this item amounts charged depositors,
net of amounts refunded to depositors, including, but not limited to, service charges and fees
levied on deposit accounts:
(1) For the maintenance of deposit accounts with the institution, so-called "maintenance
charges."
(2) For the failure to maintain specified minimum deposit balances.
(3) Based on the number of checks drawn on and deposits made in deposit accounts.
(4) For checks drawn on so-called "no minimum balance" deposit accounts.
(5) For withdrawals from nontransaction deposit accounts.
(6) For the closing of savings accounts before a specified minimum period of time has
elapsed.
(7) For accounts which have remained inactive for extended periods of time or which have
become dormant.
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.b
(cont.)
(8) For deposits to or withdrawals from deposit accounts through the use of automated teller
machines or remote service units.
(9) For the processing of checks drawn against insufficient funds, so-called "NSF check
charges," that the institution assesses regardless of whether it decides to pay, return, or
hold the check. Exclude subsequent charges levied against overdrawn accounts based
on the length of time the account has been overdrawn, the magnitude of the overdrawn
balance, or which are otherwise equivalent to interest (report in the appropriate subitem
of Schedule RI, item 1.a, "Interest and fee income on loans").
(10) For issuing stop payment orders.
(11) For certifying checks.
(12) For the accumulation or disbursement of funds deposited to Individual Retirement
Accounts (IRAs), Keogh Plan accounts, Health Savings Accounts, Medical Savings
Accounts, and Coverdell Education Savings Accounts when not handled by the
institution's trust department. Report such commissions and fees received for accounts
handled by the institution's trust department in Schedule RI, item 5.a, "Income from
fiduciary activities."
(13) For wire transfer services provided to the institution’s depositors.
Exclude penalties paid by depositors for the early withdrawal of time deposits (report as
"Other noninterest income" in Schedule RI, item 5.l, or deduct from the interest expense of
the related category of time deposits, as appropriate).
5.c
5.d.(1)
Not applicable.
Fees and commissions from securities brokerage, investment banking, advisory, and
underwriting activities. Report fees and commissions from securities brokerage activities,
from the sale and servicing of mutual funds, from the purchase and sale of securities and
money market instruments where the bank is acting as agent for other banks or customers,
and from the lending of securities owned by the bank or by bank customers (if these fees and
commissions are not included in Schedule RI, item 5.a, “Income from fiduciary activities,” or
as trading revenue in item 5.l, “Other noninterest income”). However, exclude fees and
commissions from the sale of annuities (fixed, variable, and other) to bank customers by the
bank or any securities brokerage subsidiary (report such income in Schedule RI, item 5.d.(2),
“Income from insurance activities”).
Also report fees and commissions from underwriting (or participating in the underwriting of)
securities, private placements of securities, investment advisory and management services,
merger and acquisition services, and other related consulting fees. Include fees and
commissions from the placement of commercial paper, both for transactions issued in the
bank's name and transactions in which the bank acts as an agent for a third party issuer.
Also include the bank’s proportionate share of the income or loss before discontinued
operations from its investments in equity method investees that are principally engaged in
securities brokerage, investment banking, advisory, or securities underwriting activities.
Equity method investees include unconsolidated subsidiaries; associated companies; and
corporate joint ventures, unincorporated joint ventures, general partnerships, and limited
partnerships over which the bank exercises significant influence.
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.d.(2)
Income from insurance activities. Report fees and commissions from sales of annuities
(fixed, variable, and other) by the bank and any subsidiary of the bank and fees earned from
customer referrals for annuities to insurance companies and insurance agencies external to
the consolidated bank. Also include management fees earned from annuities.
However, exclude fees and commissions from sales of annuities by the bank's trust
department (or by a consolidated trust company subsidiary) that are executed in a fiduciary
capacity (report in Schedule RI, item 5.a, "Income from fiduciary activities").
Also report the amount of premiums earned by bank subsidiaries engaged in insurance
underwriting or reinsurance activities. Include earned premiums from (a) life and health
insurance and (b) property and casualty insurance, whether (direct) underwritten business or
ceded or assumed (reinsured) business. Insurance premiums should be reported net of any
premiums transferred to other insurance underwriters/reinsurers in conjunction with
reinsurance contracts.
Report income from insurance product sales and referrals, including:
(1) Service charges, commissions, and fees earned from insurance sales, including credit,
life, health, property, casualty, and title insurance products.
(2) Fees earned from customer referrals for insurance products to insurance companies and
insurance agencies external to the consolidated bank.
Also include management fees earned from separate accounts and universal life products.
Also include the bank's proportionate share of the income or loss before discontinued
operations from its investments in equity method investees that are principally engaged in
annuity sales, insurance underwriting or reinsurance activities, or insurance product sales
and referrals. Equity method investees include unconsolidated subsidiaries; associated
companies; and corporate joint ventures, unincorporated joint ventures, general partnerships,
and limited partnerships over which the bank exercises significant influence.
5.e
FFIEC 051
Not applicable.
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RI - INCOME STATEMENT
FFIEC 051
Item No.
5.f
RI - INCOME STATEMENT
Caption and Instructions
Net servicing fees. Report income from servicing real estate mortgages, credit cards, and
other financial assets held by others. Report any premiums received in lieu of regular
servicing fees on such loans only as earned over the life of the loans. For servicing assets
and liabilities measured under the amortization method, banks should report servicing income
net of the related servicing assets’ amortization expense, include impairments recognized on
servicing assets, and also include increases in servicing liabilities recognized when
subsequent events have increased the fair value of the liability above its carrying amount.
For servicing assets and liabilities remeasured at fair value under the fair value option,
include changes in the fair value of these servicing assets and liabilities. For further
information on servicing, see the Glossary entry for “servicing assets and liabilities.”
5.g and 5.h
Not applicable.
5.i
Net gains (losses) on sales of loans and leases. Report the amount of net gains (losses)
on sales and other disposals of loans and leases (reportable in Schedule RC-C), including in
the bank’s own securitization transactions, and unrealized losses (and subsequent recoveries
of such net unrealized losses) on loans and leases held for sale, including in the bank’s own
securitization transactions. .
5.j
Net gains (losses) on sales of other real estate owned. Report the amount of net gains
(losses) on sales and other disposals of other real estate owned (reportable in Schedule RC,
item 7), increases and decreases in the valuation allowance for foreclosed real estate, and
write-downs of other real estate owned subsequent to acquisition (or physical possession)
charged to expense. Do not include as a loss on other real estate owned any amount
charged to the allowance for loan and lease losses at the time of foreclosure (actual
or physical possession) for the difference between the carrying value of a loan and the
fair value less cost to sell of the foreclosed real estate.
5.k
Net gains (losses) on sales of other assets. Report the amount of net gains (losses) on
sales and other disposals of assets not required to be reported elsewhere in the income
statement (Schedule RI). Include net gains (losses) on sales and other disposals of premises
and fixed assets; personal property acquired for debts previously contracted (such as
automobiles, boats, equipment, and appliances); and coins, art, and other similar assets.
Do not include net gains (losses) on sales and other disposals of held-to-maturity securities,
available-for-sale debt securities, equity securities with readily determinable fair values not
held for trading, loans and leases (either directly or through securitization), trading assets,
and other real estate owned (report these net gains (losses) in the appropriate items of
Schedule RI).
Do not include:
(1) The year-to-date change in net unrealized gains (losses) on equity securities with readily
determinable fair values not held for trading.
(2) The year-to-date change in net unrealized holding gains (losses) on equity securities and
other equity investments without readily determinable fair values not held for trading that
are measured at fair value through earnings.
(3) Impairment, if any, plus or minus changes resulting from observable price changes on
equity securities and other equity investments without readily determinable fair values not
held for trading for which this measurement election is made.
These amounts should be reported in Schedule RI, item 8.b.
FFIEC 051
RI-13
(12-20)
RI - INCOME STATEMENT
FFIEC 051
Item No.
5.l
RI - INCOME STATEMENT
Caption and Instructions
Other noninterest income. Report all operating income of the bank for the calendar year to
date not required to be reported elsewhere in Schedule RI.
In the December report only, disclose in Schedule RI-E, items 1.a through 1.j, each
component of other noninterest income, and the dollar amount of such component, that is
greater than $100,000 and exceeds 7 percent of the other noninterest income reported in this
item. If net losses have been reported in this item for a component of “Other noninterest
income,” use the absolute value of such net losses to determine whether the amount of the
net losses is greater than $100,000 and exceeds 7 percent of “Other noninterest income” and
should be reported in Schedule RI-E, item 1. (The absolute value refers to the magnitude of
the dollar amount without regard to whether the amount represents net gains or net losses.)
For each component of other noninterest income that exceeds the disclosure threshold in
the preceding paragraph and for which a preprinted caption has not been provided in
Schedule RI-E, items 1.a through 1.g, describe the component with a clear but concise
caption in Schedule RI-E, items 1.h through 1.j. These descriptions should not exceed
50 characters in length (including spacing between words).
For disclosure purposes in Schedule RI-E, items 1.a through 1.g, when components of
“Other noninterest income” reflect a single credit for separate “bundled services” provided
through third party vendors, disclose such amounts in the item with the preprinted caption
that most closely describes the predominant type of income earned, and this categorization
should be used consistently over time.
Include as other noninterest income:
(1) Service charges, commissions, and fees for such services as:
(a) The rental of safe deposit boxes. (Report the amount of such fees in Schedule RI-E,
item 1.e, if this amount is greater than $100,000 and exceeds 7 percent of the
amount reported in Schedule RI, item 5.l.)
(b) The safekeeping of securities for other depository institutions (if the income for such
safekeeping services is not included in Schedule RI, item 5.a, “Income from fiduciary
activities”).
(c) The sale of bank drafts, money orders, cashiers' checks, and travelers' checks.
(d) The collection of utility bills, checks, notes, bond coupons, and bills of exchange.
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FFIEC 051
Item No.
5.l
(cont.)
RI - INCOME STATEMENT
Caption and Instructions
(e) The redemption of U.S. savings bonds.
(f) The handling of food stamps.
(g) The execution of acceptances and the issuance of commercial letters of credit,
standby letters of credit, deferred payment letters of credit, and letters of credit issued
for cash or its equivalent. Exclude income on bankers acceptances and trade
acceptances (report such income in the appropriate subitem of Schedule RI, item 1.a,
"Interest and fee income on loans," or in Schedule RI, item 1.g, "Other interest
income," as appropriate).
(h) The notarizing of forms and documents.
(i) The negotiation or management of loans from other lenders for customers or
correspondents.
(j) The providing of consulting and advisory services to others. Exclude income from
investment advisory services, which is to be reported in Schedule RI, item 5.d.(1).
(k) The use of the bank's automated teller machines or remote service units by
depositors of other depository institutions. (Report the amount of such income and
fees in Schedule RI-E, item 1.c, if this amount is greater than $100,000 and exceeds
7 percent of the amount reported in Schedule RI, item 5.l.)
(l) Wire transfer services, except for wire transfers for which service charges or fees are
levied on deposit accounts of the institution’s depositors, for which the income is to
be reported in Schedule RI, item 5.b, “Service charges on deposit accounts.” (Report
the amount of income and fees from wire transfers in Schedule RI-E, item 1.g, if this
amount is greater than $100,000 and exceeds 7 percent of the amount reported in
Schedule RI, item 5.l.)
(2) Income and fees from the sale and printing of checks. (Report the amount of such
income and fees in Schedule RI-E, item 1.a, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 5.l.)
(3) Gross rentals and other income from all real estate reportable in Schedule RC, item 7,
"Other real estate owned." (Report the amount of such income in Schedule RI-E,
item 1.d, if this amount is greater than $100,000 and exceeds 7 percent of the amount
reported in Schedule RI, item 5.l.)
(4) Earnings on or other increases in the value of the cash surrender value of bank-owned
life insurance policies. (Report the amount of such earnings or other increases in
Schedule RI-E, item 1.b, if this amount is greater than $100,000 and exceeds 7 percent
of the amount reported in Schedule RI, item 5.l.)
(5) Annual or other periodic fees paid by holders of credit cards issued by the bank. Fees
that are periodically charged to cardholders shall be deferred and recognized on a
straight-line basis over the period the fee entitles the cardholder to use the card.
(6) Charges to merchants for the bank's handling of credit card or charge sales when the
bank does not carry the related loan accounts on its books. Banks may report this
income net of the expenses (except salaries) related to the handling of these credit card
or charge sales.
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.l
(cont.)
(7) Interchange fees earned from bank card and credit card transactions. (Report the
amount of such fees in Schedule RI-E, item 1.f, if this amount is greater than $100,000
and exceeds 7 percent of the amount reported in Schedule RI, item 5.l.)
(8) Gross income received for performing data processing services for others. Do not deduct
the expense of performing such services for others (report in the appropriate items of
noninterest expense).
(9) Loan commitment fees that are recognized during the commitment period (i.e., fees
retrospectively determined and fees for commitments where exercise is remote) or
included in income when the commitment expires and loan syndication fees that are not
required to be deferred. Refer to the Glossary entry for "loan fees" for further information.
(10) Trading revenue (which may be a net gain or loss) from cash instruments and derivative
contracts reportable in Schedule RC, item 5, "Trading assets," and Schedule RC,
item 15, "Trading liabilities," including gains (losses) from trading such instruments and
contracts, revaluation adjustments from the periodic marking to fair value of such
instruments and contracts, and incidental income and expense related to the purchase
and sale of such instruments and contracts.
(11) Net tellers' overages (shortages), net recoveries (losses) on forged checks, net
recoveries (losses) on payment of checks over stop payment orders, and similar
recurring operating gains (losses) of this type. Banks should consistently report these
gains (losses) either in this item or in Schedule RI, item 7.d.
(12) Net gains (losses) from the sale or other disposal of branches (i.e., where the reporting
bank sells a branch's assets to another depository institution, which assumes the
deposit liabilities of the branch). Banks should consistently report these net gains
(losses) either in this item or in Schedule RI, item 7.d.
(13) Net gains (losses) from all transactions involving foreign currency or foreign exchange
other than trading transactions. Banks should consistently report these net gains
(losses) either in this item or in Schedule RI, item 7.d.
(14) Rental fees applicable to operating leases for furniture and equipment rented to others.
(15) Interest received on tax refunds.
(16) Life insurance proceeds on policies for which the bank is the beneficiary.
(17) Credits resulting from litigation or other claims.
(18) Portions of penalties for early withdrawals of time deposits that exceed the interest
accrued or paid on the deposit to the date of withdrawal, if material. Penalties for
early withdrawals, or portions of such penalties, that represent the forfeiture of interest
accrued or paid to the date of withdrawal are a reduction of interest expense and should
be deducted from the gross interest expense of the appropriate category of
time deposits in Schedule RI, item 2.a, "Interest on deposits."
FFIEC 051
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RI - INCOME STATEMENT
FFIEC 051
RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.l
(cont.)
(19) Interest income from advances to, or obligations of, and the bank's proportionate
share of the income or loss before discontinued operations from its investments in:
• unconsolidated subsidiaries,
• associated companies,
• corporate joint ventures, unincorporated joint ventures, and general partnerships
over which the bank exercises significant influence, and
• noncontrolling investments in certain limited partnerships and limited liability
companies (described in the Glossary entry for “equity method of accounting”)
other than those that are principally engaged in (a) securities brokerage, investment
banking, advisory, or securities underwriting activities or (b) insurance and reinsurance
underwriting or insurance and annuity sales activities (the income from which should be
reported in Schedule RI, items 5.d.(1) and 5.d.(2), respectively). Exclude the bank's
proportionate share of the results of discontinued operations of these entities (report in
Schedule RI, item 11, "Discontinued operations, net of applicable income taxes").
(20) Net gains (losses) on derivative instruments held for purposes other than trading that
are not designated as hedging instruments in hedging relationships that qualify for
hedge accounting in accordance with ASC Topic 815, Derivatives and Hedging
(formerly FASB Statement No. 133, “Accounting for Derivative Instruments and
Hedging Activities”). Institutions should consistently report these net gains (losses)
either in this item or in Schedule RI, item 7.d. For further information, see the Glossary
entries for “derivative contracts” and “trading account.”
(21) Gross income generated by securities contributed to charitable contribution Clifford
Trusts.
(22) Income from ground rents and air rights.
(23) Revaluation adjustments to the carrying value of all assets and liabilities reported in
Schedule RC at fair value under a fair value option (excluding servicing assets and
liabilities reported in Schedule RC, item 10, “Intangible assets,” and Schedule RC,
item 20, “Other liabilities,” respectively) resulting from the periodic marking of such
assets and liabilities to fair value. Exclude interest income earned and interest
expense incurred on financial assets and liabilities reported at fair value under a fair
value option, which should be reported in the appropriate interest income or interest
expense items on Schedule RI. Also exclude the portion of the total change in the fair
value of a fair value option liability resulting from a change in the instrument-specific
credit risk (“own credit risk”), which should be reported in Schedule RI-A, item 10,
“Other comprehensive income.”
(24) Gains on bargain purchases recognized and measured in accordance with
ASC Topic 805, Business Combinations (formerly FASB Statement No. 141(R),
“Business Combinations”).
(25) Revenue from venture capital activities (which may be a net gain or loss), which
generally involves the providing of funds, whether in the form of loans or equity, and
technical and management assistance, when needed and requested, to start-up or
high-risk companies specializing in new technologies, ideas, products, or processes.
For further information, see the instructions for Schedule RI, item 5.e, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
(26) Fee income (other than servicing fees and commercial paper placement fees) from the
bank's securitization and structured finance transactions. (Report income from
servicing securitized assets in Schedule RI, item 5.f, and fee income from the
placement of commercial paper in Schedule RI, item 5.d.(1)).
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Item No.
Caption and Instructions
5.l
(cont.)
Exclude from Schedule RI, item 5.l, “Other noninterest income,” income from seller’s interests
and residual interests retained by the bank in the bank’s own securitization transactions
(report in the appropriate subitem of Schedule RI, item 1, “Interest income").
5.m
Total noninterest income. Report the sum of items 5.a through 5.l.
6.a
Realized gains (losses) on held-to-maturity securities. Report the net gain or loss
realized during the calendar year to date from the sale, exchange, redemption, or retirement
of all securities reportable in Schedule RC, item 2.a, "Held-to-maturity securities." The
realized gain or loss on a security is the difference between the sales price (excluding interest
at the coupon rate accrued since the last interest payment date, if any) and its amortized
cost. Institutions that have not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses, should also include in this
item other-than-temporary impairment losses on individual held-to-maturity securities that
must be recognized in earnings. For further information on the accounting for impairment of
held-to-maturity securities, see the Glossary entry for “securities activities.”
Institutions that have adopted ASU 2016-13 should adjust the amortized cost of a held-tomaturity debt security for recoveries of any prior charge-offs when calculating the realized
gain or loss on the security, such that the recovery of a previously charged-off amount should
be recorded as a credit to the allowance for credit losses before recognizing the gain.
If the amount to be reported in this item is a net loss, report it with a minus (-) sign.
Exclude from this item realized gains (losses) on available-for-sale securities (report in
Schedule RI, item 6.b, below) and on trading securities (report as trading revenue in
Schedule RI, item 5.l, “Other noninterest income”).
6.b
Realized gains (losses) on available-for-sale debt securities. Report the net gain or loss
realized during the calendar year to date from the sale, exchange, redemption, or retirement
of all debt securities reportable in Schedule RC, item 2.b, "Available-for-sale debt securities."
The realized gain or loss on a debt security is the difference between the sales price
(excluding interest at the coupon rate accrued since the last interest payment date, if any)
and its amortized cost. Institutions that have not adopted ASU 2016-13 should also include
in this item other-than-temporary impairment losses on individual available-for-sale debt
securities that must be recognized in earnings. For further information on the accounting for
impairment of available-for-sale debt securities, see the Glossary entry for “Securities
Activities.”
Institutions that have adopted ASU 2016-13 should adjust the amortized cost of an availablefor-sale debt security for recoveries of any prior charge-offs when calculating the realized
gain or loss on the security, such that the recovery of a previously charged-off amount should
be recorded as a credit to the allowance for credit losses before recognizing the gain. Also
include in this item any write-off recorded when the fair value of an available-for-sale debt
security is less than its amortized cost basis and (a) the institution intends to sell the security
or (b) it is more likely than not that the institution will be required to sell the security before
recovery of its amortized cost basis.
If the amount to be reported in this item is a net loss, report it with a minus (-) sign.
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RI - INCOME STATEMENT
Item No.
Caption and Instructions
6.b
(cont.)
Exclude from this item:
(1) The change in net unrealized holding gains (losses) on available-for-sale debt securities
during the calendar year to date (report in Schedule RI-A, item 10, “Other comprehensive
income”).
(2) Realized and unrealized gains (losses) during the calendar year to date on equity
securities with readily determinable fair values not held for trading (report in Schedule RI,
item 8.b, “Change in net unrealized holding gains (losses) on equity securities not held
for trading”).
(3) Realized gains (losses) on held-to-maturity securities (report in Schedule RI, item 6.a,
above) and on trading securities (report in Schedule RI, item 5.c, “Trading revenue”).
(4) For institutions that have adopted ASU 2016-13, provisions for credit losses (and
reversals of provisions) that increase (and decrease) the allowance for credit losses on
available-for-sale debt securities (report in Schedule RI, item 4, “Provision for loan and
lease losses”).
7
Noninterest expense:
7.a
Salaries and employee benefits. Report salaries and benefits of all officers and
employees of the bank and its consolidated subsidiaries including guards and contracted
guards, temporary office help, dining room and cafeteria employees, and building department
officers and employees (including maintenance personnel). 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 bank. However, banking organizations should not segregate the
compensation component of other intercompany cost allocations arising from arrangements
other than that described in the preceding sentence for purposes of this item.
Include as salaries and employee benefits:
(1) Gross salaries, wages, overtime, bonuses, incentive compensation, and extra
compensation.
(2) Social security taxes and state and federal unemployment taxes paid by the bank.
(3) Costs of the bank's retirement plan, pension fund, profit-sharing plan, employee stock
ownership plan, employee stock purchase plan, and employee savings plan. For
defined benefit pension plans and other postretirement plans, report only the service
cost component of net benefit cost for such plans in this item 7.a; the other cost
components of net benefit cost should be reported in Schedule RI, item 7.d, “Other
noninterest expense.”
(4) Premiums (net of dividends received) on health and accident, hospitalization, dental,
disability, and life insurance policies for which the bank is not the beneficiary.
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Item No.
Caption and Instructions
7.a
(cont.)
(5)
Cost of office temporaries whether hired directly by the bank or through an outside
agency.
(6)
Workmen's compensation insurance premiums.
(7)
The net cost to the bank for employee dining rooms, restaurants, and cafeterias.
(8)
Accrued vacation pay earned by employees during the calendar year-to-date.
(9)
The cost of medical or health services, relocation programs and reimbursements of
moving expenses, tuition reimbursement programs, and other so-called fringe benefits
for officers and employees.
(10) Compensation expense (service component and interest component) related to
deferred compensation agreements.
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Item No.
Caption and Instructions
7.a
(cont.)
Exclude from salaries and employee benefits (report in Schedule RI, item 7.d, "Other
noninterest expense"):
(1) Amounts paid to attorneys, accountants, management consultants, investment
counselors, and other professionals who are not salaried officers or employees of the
bank (except if these professionals, in form, are employed by an affiliate of the reporting
bank but, in substance, do substantially all of their work for the reporting bank).
(2) Expenses related to the testing and training of officers and employees.
(3) The cost of bank newspapers and magazines prepared for distribution to bank officers
and employees.
(4) Expenses of life insurance policies for which the bank is the beneficiary. (However, when
these expenses relate to bank-owned life insurance policies with cash surrender values,
banks may report the net earnings on or the net increases in the value of these cash
surrender values in Schedule RI, item 5.l, above.)
(5) The cost of athletic activities in which officers and employees participate when the
purpose may be construed to be for marketing or public relations, and employee benefits
are only incidental to the activities.
(6) Dues, fees and other expenses associated with memberships in country clubs, social or
private clubs, civic organizations, and similar clubs and organizations.
7.b
Expenses of premises and fixed assets. Report all noninterest expenses related to the
use of premises, equipment, furniture, and fixtures reportable in Schedule RC, item 6,
"Premises and fixed assets," net of rental income. If this net amount is a credit balance,
report it with a minus (-) sign.
Deduct rental income from gross premises and fixed asset expense. Rental income includes
all rentals charged for the use of buildings not incident to their use by the reporting institution
and its consolidated subsidiaries, including rentals by regular tenants of the institution’s
buildings, income received from short-term rentals of other bank facilities, and income from
subleases. Also deduct income from stocks and bonds issued by nonmajority-owned
corporations and investments in limited partnerships or limited liability companies whose
principal activity is the ownership of premises, equipment, furniture, or fixtures occupied or
used (or to be occupied or used) by the institution, its branches, or its consolidated
subsidiaries and are reportable in Schedule RC, item 6, "Premises and fixed assets."
Include as expenses of premises and fixed assets:
(1)
FFIEC 051
Normal and recurring depreciation and amortization charges against, and any
impairments on, assets reportable in Schedule RC, item 6, "Premises and fixed assets,"
including capital lease assets accounted for in accordance with ASC Topic 840,
Leases, and right-of-use (ROU) assets for finance leases accounted for in accordance
with ASC Topic 842, as applicable. Include depreciation and amortization charges
regardless of whether they represent direct reductions in the carrying value of the
assets or additions to accumulated depreciation or amortization accounts. Any method
of depreciation or amortization conforming to accounting principles that are generally
acceptable for financial reporting purposes may be used. However, depreciation for
premises and fixed assets may be based on a method used for federal income tax
purposes if the results would not be materially different from depreciation based on the
asset's estimated useful life.
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Item No.
Caption and Instructions
7.b
(cont.)
(2)
For operating leases accounted for in accordance with:
(a) ASC Topic 840 by a lessee institution that has not adopted ASC Topic 842, rental
expense for leased premises (including parking lots), equipment (including data
processing equipment), furniture, and fixtures.
(b) ASC Topic 842 by a lessee institution that has adopted this topic, a single lease
cost for the expenses related to lease liabilities and the amortization of ROU assets
for leased premises, equipment, furniture, and fixtures; variable lease payments not
included in lease liabilities; and any impairments of ROU assets.
(3)
Cost of ordinary repairs to premises (including leasehold improvements), equipment,
furniture, and fixtures.
(4)
Cost of service or maintenance contracts for equipment, furniture, and fixtures.
(5)
Cost of leasehold improvements, equipment, furniture, and fixtures charged directly to
expense and not placed on the bank's books as assets.
(6)
Insurance expense related to the use of premises, equipment, furniture, and fixtures
including such coverages as fire, multi-peril, boiler, plate glass, flood, and public liability.
(7)
All property tax and other tax expense related to premises (including leasehold
improvements), equipment, furniture, and fixtures, including deficiency payments, net of
all rebates, refunds, or credits.
(8)
Any portion of a lessee institution’s payments to lessors representing executory costs
such as insurance, maintenance, and taxes.
(9)
Cost of heat, electricity, water, and other utilities connected with the use of premises
and fixed assets.
(10) Cost of janitorial supplies and outside janitorial services.
(11) Fuel, maintenance, and other expenses related to the use of the bank-owned
automobiles, airplanes, and other vehicles for bank business.
Exclude from expenses of premises and fixed assets:
(1) Salaries and employee benefits (report such expenses for all officers and employees of
the bank and its consolidated subsidiaries in Schedule RI, item 7.a, "Salaries and
employee benefits").
(2) Interest on mortgages, liens, or other encumbrances on premises or equipment owned,
including the portion of lease payments representing interest expense for capital leases
accounted for in accordance with ASC Topic 840 and the interest expense on lease
liabilities for finance leases accounted for in accordance with ASC Topic 842 (report in
Schedule RI, item 2.c, "Interest on trading liabilities and other borrowed money").
(3) All expenses associated with other real estate owned (report in Schedule RI, item 7.d,
"Other noninterest expense").
(4) Gross rentals from other real estate owned and fees charged for the use of parking lots
properly reported as other real estate owned, as well as safe deposit box rentals and
rental fees applicable to operating leases for furniture and equipment rented to others
(report in Schedule RI, item 5.l).
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Item No.
Caption and Instructions
7.c.(1)
Goodwill impairment losses. Report any impairment losses recognized during the period
on goodwill. Exclude goodwill impairment losses associated with discontinued operations
(report such losses on a net-of-tax basis in Schedule RI, item 11, "Discontinued operations,
net of applicable income taxes").
An institution that meets the definition of a private company in U.S. generally accepted
accounting principles and has elected the accounting alternative for the amortization of
goodwill in ASC Subtopic 350-20, Intangibles-Goodwill and Other – Goodwill (formerly FASB
Statement No. 142, “Goodwill and Other Intangible Assets”), as amended by Accounting
Standards Update No. 2014-02, “Accounting for Goodwill,” should report the amortization
expense of goodwill in this item. Exclude goodwill amortization expense associated with
discontinued operations (report such expense on a net-of-tax basis in Schedule RI, item 11,
“Discontinued operations, net of applicable income taxes”). A private company that elects the
accounting alternative for the subsequent measurement of goodwill should amortize each
amortizable unit of goodwill on a straight-line basis over ten years (or less than ten years if
the private company demonstrates that another useful life is more appropriate).
Except when the private company accounting alternative described above has been elected,
goodwill should not be amortized. However, regardless of whether goodwill is amortized, it
must be tested for impairment as described in the Glossary entry for “goodwill.”
7.c.(2)
Amortization expense and impairment losses for other intangible assets. Report the
amortization expense of and any impairment losses on intangible assets (other than goodwill
and servicing assets) reportable in Schedule RC-M, item 2.c. Under ASC Topic 350,
Intangibles-Goodwill and Other (formerly FASB Statement No. 142, “Goodwill and Other
Intangible Assets”), intangible assets that have indefinite useful lives should not be
amortized, but must be tested at least annually for impairment. Intangible assets that have
finite useful lives must be amortized over their useful lives and must be reviewed for
impairment in accordance with ASC Topic 360, Property, Plant, and Equipment (formerly
FASB Statement No. 144, “Accounting for the Impairment of Long-Lived Assets”).
Exclude the amortization expense of and any impairment losses on servicing assets, which
should be netted against the servicing income reported in Schedule RI, item 5.f, “Net
servicing fees,” above.
7.d
Other noninterest expense. Report all operating expenses of the bank for the calendar
year-to-date not required to be reported elsewhere in Schedule RI.
In the December report only, disclose in Schedule RI-E, items 2.a through 2.p, each
component of other noninterest expense, and the dollar amount of such component, that is
greater than $100,000 and exceeds 7 percent of the other noninterest expense reported in
this item. If net gains have been reported in this item for a component of “Other noninterest
expense,” use the absolute value of such net gains to determine whether the amount of the
net gains is greater than $100,000 and exceeds 7 percent of “Other noninterest expense” and
should be reported in Schedule RI-E, item 2. (The absolute value refers to the magnitude of
the dollar amount without regard to whether the amount represents net gains or net losses.)
For each component of other noninterest expense that exceeds the disclosure threshold in
the preceding paragraph and for which a preprinted caption has not been provided in
Schedule RI-E, items 2.a.through 2.m, describe the component with a clear but concise
caption in Schedule RI-E, items 2.n through 2.p. These descriptions should not exceed
50 characters in length (including spacing between words).
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Item No.
Caption and Instructions
7.d
(cont.)
For disclosure purposes in Schedule RI-E, items 2.a through 2.m, when components of
“Other noninterest expense” reflect a single charge for separate “bundled services” provided
by third party vendors, disclose such amounts in the item with the preprinted caption that
most closely describes the predominant type of expense incurred, and this categorization
should be used consistently over time.
Include as other noninterest expense:
(1) Fees paid to directors and advisory directors for attendance at board of directors’ or
committee meetings (including travel and expense allowances). (Report the amount of
such fees in Schedule RI-E, item 2.c, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(2) Cost of data processing services performed for the bank by others. (Report the amount
of such expenses in Schedule RI-E, item 2.a, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(3) Advertising, promotional, public relations, marketing, and business development
expenses. Such expenses include the cost of athletic activities in which officers and
employees participate when the purpose may be construed to be for marketing or public
relations, and employee benefits are only incidental to the activities. (Report the amount
of such expenses in Schedule RI-E, item 2.b, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(4) Cost of gifts or premiums (whether in the form of merchandise, credit, or cash) given to
depositors at the time of the opening of a new account or an addition to, or renewal of, an
existing account, if not included in advertising and marketing expenses above.
(5) Retainer fees, legal fees, and other fees and expenses paid to attorneys who are not
bank officers or employees and to outside law firms. (Report the amount of such
expenses in Schedule RI-E, item 2.f, if this amount is greater than $100,000 and exceeds
7 percent of the amount reported in Schedule RI, item 7.d.)
(6) Cost of printing, stationery, and office supplies. (Report the amount of such expenses in
Schedule RI-E, item 2.d, if this amount is greater than $100,000 and exceeds 7 percent
of the amount reported in Schedule RI, item 7.d.)
(7) Postage and mailing expenses. (Report the amount of such expenses in Schedule RI-E,
item 2.e, if this amount is greater than $100,000 and exceeds 7 percent of the amount
reported in Schedule RI, item 7.d.)
(8) Telecommunications expenses, including any expenses associated with telephone,
telegraph, cable, and internet services (including web page maintenance). (Report the
amount of such expenses in Schedule RI-E, item 2.k, if this amount is greater than
$100,000 and exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(9) Federal deposit insurance assessments. (Report the amount of such assessments in
Schedule RI-E, item 2.g, if this amount is greater than $100,000 and exceeds 7 percent
of the amount reported in Schedule RI, item 7.d.)
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Item No.
Caption and Instructions
7.d
(cont.)
(10) Premiums on fidelity insurance (blanket bond, excess employee dishonesty bond),
directors' and officers' liability insurance, life insurance policies for which the bank is the
beneficiary, and other insurance policies for which the premiums are not included in
salaries and employee benefits, expenses of premises and fixed assets, and expenses
of other real estate owned. (Report the amount of such insurance expenses in
Schedule RI-E, item 2.m, if this amount is greater than $100,000 and exceeds 7 percent
of the amount reported in Schedule RI, item 7.d.)
(11) Assessment expense, examination expense, and other fees levied by the Comptroller
of the Currency or a state chartering authority, net of any assessment credits during the
period.
(12) Legal fees and other direct costs incurred to effect foreclosures on real estate and
subsequent noninterest expenses related to holdings of real estate owned other than
bank premises (including depreciation charges, if appropriate). (Report the amount of
such expenses in Schedule RI-E, item 2.l, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(13) Net losses (gains) from the sale or other disposal of branches (i.e., where the reporting
bank sells a branch's assets to another depository institution, which assumes the
deposit liabilities of the branch). Banks should consistently report these net losses
(gains) either in this item or in Schedule RI, item 5.l.
(14) Net losses (gains) from all transactions involving foreign currency or foreign exchange
other than trading transactions. Banks should consistently report these net losses
(gains) either in this item or in Schedule RI, item 5.l.
(15) Management fees assessed by the bank’s parent holding company, whether for specific
services rendered or of a general (prorated) nature.
(16) Sales taxes, taxes based on the number of shares of bank stock outstanding, taxes
based on the bank's total assets or total deposits, taxes based on the bank's gross
revenues or gross receipts, capital stock taxes, and other taxes not included in other
categories of expense. Exclude any state and local taxes based on a net amount of
revenues less expenses (report as applicable income taxes in Schedule RI, item 9).
(17) Fees levied by deposit brokers that are, in substance, retainer fees or that otherwise do
not represent an adjustment to the interest rate paid on deposits the reporting bank
acquires through brokers. However, report as interest expense on the appropriate
category of deposits those finders' fees and brokers' fees that do represent an
adjustment to the interest rate paid on brokered deposits.
(18) Research and development costs and costs incurred in the internal development of
computer software.
(19) Charges resulting from litigation or other claims.
(20) Charitable contributions including donations by Clifford Trusts.
(21) Fees for accounting, auditing, and attestation services; retainer fees; and other fees
and expenses paid to accountants and auditors who are not bank officers or
employees. (Report the amount of such expenses in Schedule RI-E, item 2.h, if this
amount is greater than $100,000 and exceeds 7 percent of the amount reported in
Schedule RI, item 7.d.)
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Item No.
Caption and Instructions
7.d
(cont.)
(22) Fees for consulting and advisory services, retainer fees, and other fees and expenses
to management consultants, investment advisors, and other professionals (other than
attorneys providing legal services and accountants providing accounting, auditing, and
attestation services) who are not bank officers or employees. (Report the amount of
such expenses in Schedule RI-E, item 2.i, if this amount is greater than $100,000 and
exceeds 7 percent of the amount reported in Schedule RI, item 7.d.)
(23) Net losses (gains) on derivative instruments held for purposes other than trading that
are not designated as hedging instruments in hedging relationships that qualify for
hedge accounting in accordance with ASC Topic 815, Derivatives and Hedging
(formerly FASB Statement No. 133, “Accounting for Derivative Instruments and
Hedging Activities”). Institutions should consistently report these net losses (gains)
either in this item or in Schedule RI, item 5.l. For further information, see the Glossary
entries for “derivative contracts” and “trading account.”
(24) Net tellers' shortages (overages), net losses (recoveries) on forged checks, net losses
(recoveries) on payment of checks over stop payment orders, and similar recurring
operating losses (gains) of this type. Banks should consistently report these losses
(gains) either in this item or in Schedule RI, item 5.l.
(25) Net losses resulting from fiduciary and related services. Net losses are gross losses
less recoveries (including those from insurance payments). Gross losses include
settlements, surcharges, and other losses arising from errors, misfeasance, or
malfeasance on fiduciary accounts and related services and should reflect losses
recognized on an accrual basis. Recoveries may be for current or prior years’ losses
from fiduciary and related services and should be reported when payment is actually
realized. If the institution enters into a “fee reduction” or “fee waiver” agreement with a
client as the method for reimbursing or compensating the client for a loss on the client’s
fiduciary or related services account, the full amount of this loss must be recognized on
an accrual basis and reported in this item as “Other noninterest expense.” An institution
should not report such a loss as a reduction of the gross income from fiduciary and
related services it reports in Schedule RI, item 5.a, “Income from fiduciary activities,”
in the current or future periods when the “fee reduction” or “fee waiver” takes place.
(See the example after the instructions to Schedule RC-T, Memorandum item 4.e.)
For institutions required to complete Schedule RC-T, item 24, the amount of net losses
from fiduciary and related services also is reported in that item.
(26) Losses from robberies, defalcations, and other criminal acts not covered by the bank's
blanket bond.
(27) Travel and entertainment expenses, including costs incurred by bank officers and
employees for attending meetings and conventions.
(28) Dues, fees, and other expenses associated with memberships in country clubs, social
or private clubs, civic organizations, and similar clubs and organizations.
(29) Civil money penalties and fines.
(30) All service charges, commissions, and fees levied by others for the repossession of
assets and the collection of the bank's loans or other assets, including charged-off
loans or other charged-off assets.
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Item No.
Caption and Instructions
7.d
(cont.)
(31) Expenses (except salaries) related to handling credit card or charge sales received
from merchants when the bank does not carry the related loan accounts on its books.
Banks are also permitted to net these expenses against their charges to merchants for
the bank's handling of these sales in Schedule RI, item 5.l.
(32) Expenses related to the testing and training of officers and employees.
(33) The cost of bank newspapers and magazines prepared for distribution to bank officers
and employees or to others.
(34) Depreciation expense of furniture and equipment rented to others under operating
leases.
(35) Cost of checks provided to depositors.
(36) Amortization expense of purchased computer software and of the 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”).
(37) Provision for credit losses on off-balance sheet credit exposures.
(38) Net losses (gains) from the extinguishment of liabilities (debt), including losses resulting
from the payment of prepayment penalties on borrowings such as Federal Home Loan
Bank advances. However, if a bank's debt extinguishments normally result in net gains
over time, then the bank should consistently report its net gains (losses) in Schedule RI,
item 5.l, "Other noninterest income."
(39) Automated teller machine (ATM) and interchange expenses from bank card and credit
card transactions. (Report the amount of such expenses in Schedule RI-E, item 2.j, if
this amount is greater than $100,000 and exceeds 7 percent of the amount reported in
Schedule RI, item 7.d.)
(40) The cost components of net benefit cost of defined benefit pension plans and other
postretirement plans other than the service cost component of such plans. (Report the
service cost component of such plans in Schedule RI, item 7.a, “Salaries and employee
benefits.”)
Exclude from other noninterest expense:
(1) Material expenses incurred in the issuance of subordinated notes and debentures
(capitalize such expenses and amortize them over the life of the related notes and
debentures using the effective interest method and report the expense in Schedule RI,
item 2.c, "Other interest expense"). For further information, see the Glossary entry for
“Debt issuance costs.”
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Item No.
Caption and Instructions
7.d
(cont.)
(2) Expenses incurred in the sale of preferred and common stock (deduct such expenses
from the sale proceeds and credit the net amount to the appropriate stock account.
For perpetual preferred and common stock only, report the net sales proceeds in
Schedule RI-A, item 5, "Sale, conversion, acquisition, or retirement of capital stock, net").
(3) Depreciation and other expenses related to the use of bank-owned automobiles,
airplanes, and other vehicles for bank business (report in Schedule RI, item 7.b,
"Expenses of premises and fixed assets").
(4) For institutions that have not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses, write-downs of the cost
basis of individual held-to-maturity and available-for-sale securities for other-thantemporary impairments that must be recognized in earnings (report in Schedule RI,
item 6.a, "Realized gains (losses) on held-to-maturity securities," and item 6.b, "Realized
gains (losses) on available-for-sale securities," respectively).
(5) For institutions that have adopted ASU 2016-13:
(a) Charge-offs of the cost basis of individual held-to-maturity and available-for-sale debt
securities resulting from credit losses (report as deductions from the applicable
allowance for credit losses in columns B and C, respectively, of Schedule RI-B,
Part II, item 3, “Charge-offs”); and
(b) Any write-off recorded when the fair value of an available-for-sale debt security is
less than its amortized cost basis and (i) the institution intends to sell the security or
(ii) it is more likely than not that the institution will be required to sell the security
before recovery of its amortized cost basis (report in Schedule RI, item 6.b, "Realized
gains (losses) on available-for-sale securities”).
(6) Revaluation adjustments to the carrying value of all assets and liabilities reported in
Schedule RC at fair value under a fair value option. Except as noted below, institutions
should report net decreases (increases) in fair value on such servicing assets and
liabilities in Schedule RI, item 5.f, and on such financial assets and liabilities in
Schedule RI, item 5.l. Institutions should report the portion of the total change in the fair
value of a fair value option liability resulting from a change in the instrument-specific
credit risk (“own credit risk”) in Schedule RI-A, item 10, “Other comprehensive income.”
Interest income earned and interest expense incurred on fair value option financial assets
and liabilities should be excluded from the net decreases (increases) in fair value and
reported in the appropriate interest income or interest expense items on Schedule RI.
7.e
Total noninterest expense. Report the sum of items 7.a through 7.d.
8.a
Income (loss) before change in net unrealized holding gains (losses) on equity
securities not held for trading, applicable income taxes, and discontinued operations.
Report the institution’s pretax income from continuing operations before any change in net
unrealized holding gains (losses) on equity securities and other equity investments not held
for trading. This amount is determined by taking item 3, "Net interest income"; minus item 4,
"Provision for loan and lease losses";1 plus item 5.m, "Total noninterest income"; plus
item 6.b, "Realized gains (losses) on available-for-sale securities," minus item 7.e, "Total
noninterest expense." If the result is negative, report it with a minus (-) sign.
1 Note: Institutions that have adopted ASU 2016-13 should report provisions for credit losses on all assets within the
scope of the ASU in Schedule RI, item 4.
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Item No.
RI - INCOME STATEMENT
Caption and Instructions
NOTE: All institutions must complete Schedule RI, item 8.b (i.e., not leave item 8.b blank), because all
institutions are now required to have adopted FASB Accounting Standards Update No. 2016-01
(ASU 2016-01) for Call Report purposes. ASU 2016-01 includes provisions governing the accounting for
investments in equity securities 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 the 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. See the Glossary entry for “Securities
Activities” for further information on accounting for investments in equity securities.
8.b
Change in net unrealized holding gains (losses) on equity securities not held for
trading. Report the year-to-date change in net unrealized holding gains (losses) on equity
securities with readily determinable fair values not held for trading. Include the year-to-date
change in net unrealized holding gains (losses) on equity securities and other equity
investments without readily determinable fair values not held for trading that are measured at
fair value through earnings. Also include impairment, if any, plus or minus changes resulting
from observable price changes during the year-to-date reporting period on equity securities
and other equity investments without readily determinable fair values not held for trading for
which this measurement election is made.
Include realized gains (losses) on equity securities and other equity investments during the
year-to-date reporting period. A realized gain (loss) arises if an institution sells an equity
security or other equity investment, but had not yet recorded in earnings the change in value
to the point of sale since the last value change was recorded.
8.c
Income (loss) before applicable income taxes and discontinued operations. Report the
institution’s pretax income from continuing operations as the sum of Schedule RI, item 8.a,
"Income (loss) before change in net unrealized holding gains (losses) on equity securities not
held for trading, applicable income taxes, and discontinued operations," and Schedule RI,
item 8.b, "Change in net unrealized holding gains (losses) on equity securities not held for
trading." If the amount is negative, report it with a minus (-) sign.
9
Applicable income taxes (on item 8.c). Report the total estimated federal, state, and local
income tax expense applicable to item 8.c, "Income (loss) before applicable income taxes
and discontinued operations." Include both the current and deferred portions of these income
taxes. If the amount is a tax benefit rather than tax expense, report it with a minus (-) sign.
Include as applicable income taxes all taxes based on a net amount of taxable revenues less
deductible expenses. Exclude from applicable income taxes all taxes based on gross revenues
or gross receipts (report such taxes in Schedule RI, item 7.d, "Other noninterest expense").
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Item No.
Caption and Instructions
9
(cont.)
Include income tax effects of changes in tax laws or rates. Also include the effect of changes
in the valuation allowance related to deferred tax assets resulting from a change in estimate
of the realizability of deferred tax assets, excluding the effect of any valuation allowance
changes related to unrealized holding gains (losses) on available-for-sale securities that are
charged or credited directly to the separate component of equity capital for “Accumulated
other comprehensive income" (Schedule RC, item 26.b).
Include the tax benefit of an operating loss carryforward or carryback for which the source of
the income or loss in the current year is reported in Schedule RI, item 8.a, "Income (loss)
before unrealized holding gains (losses) on equity securities not held for trading, applicable
income taxes, and discontinued operations."
Also include the dollar amount of any material adjustments or settlements reached with a
taxing authority (whether negotiated or adjudicated) relating to disputed income taxes of prior
years.
Exclude the estimated federal, state, and local income taxes applicable to:
(1) Schedule RI, item 11, "Discontinued operations, net of applicable income taxes."
(2) Schedule RI-A, item 2, "Cumulative effect of changes in accounting principles and
corrections of material accounting errors."
(3) Schedule RI-A, item 10, "Other comprehensive income.“
Refer to the Glossary entry for "income taxes" for additional information.
10
Income (loss) before discontinued operations. Report Schedule RI, item 8.c, "Income
(loss) before applicable income taxes and discontinued operations," minus Schedule RI,
item 9, "Applicable income taxes (on item 8.c)." If the amount is negative, report it with a
minus (-) sign.
11
Discontinued operations, net of applicable income taxes. Report the results of
discontinued operations, if any, net of applicable income taxes, as determined in accordance
with the provisions of ASC Subtopic 205-20, Presentation of Financial Statements –
Discontinued Operations (formerly FASB Statement No. 144, “Accounting for the Impairment
of Long-Lived Assets”). If the amount reported in this item is a net loss, report it with a
minus (-) sign. State the dollar amount of the results of, and describe each of, the reporting
institution’s discontinued operations included in this item and the applicable income tax effect
in Schedule RI-E, item 3.
12
Net income (loss) attributable to bank and noncontrolling (minority) interests.
Report the sum of Schedule RI, items 10 and 11. If this amount is a net loss, report it with a
minus (-) sign.
13
LESS: Net income (loss) attributable to noncontrolling (minority) interests. Report that
portion of consolidated net income reported in Schedule RI, item 12, above, attributable to
noncontrolling interests in consolidated subsidiaries of the bank. A noncontrolling interest,
also called a minority interest, is the portion of equity in a bank’s subsidiary not attributable,
directly or indirectly, to the parent bank. If the amount reported in this item is a net loss,
report it with a minus (-) sign.
14
Net income (loss) attributable to bank. Report Schedule RI, item 12, less item 13. If this
amount is a net loss, report it with a minus (-) sign.
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Memoranda
Item No.
Caption and Instructions
1 and 2
Not applicable.
3
Income on tax-exempt loans and leases to states and political subdivisions in the U.S.
Report the bank’s best estimate of the income earned on:
(1) Tax-exempt loans to states and political subdivisions in the U.S. reportable in
Schedule RC-C, Part I, item 8. This income will have been included in Schedule RI,
item 1.a.(5), Interest and fee income on “All other loans,” above.
(2) Tax-exempt leases to states and political subdivisions in the U.S. reportable in
Schedule RC-C, Part I, item 10. This income will have been included in Schedule RI,
item 1.b, “Income from lease financing receivables,” above.
Tax-exempt loans and leases are those loans and leases to states and political subdivisions
in the U.S. whose income is excludable from gross income for federal income tax purposes,
regardless of whether the income from the loan or lease must be included in the bank’s
alternative minimum taxable income and regardless of the federal income tax treatment of the
interest expense incurred to carry the loan or lease.
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Memoranda
Item No.
Caption and Instructions
4
Income on tax-exempt securities issued by states and political subdivisions in the U.S.
Report the bank's best estimate of the income earned on those securities issued by states
and political subdivisions in the U.S. reportable in Schedule RC-B, item 3, the income from
which is excludable from gross income for federal income tax purposes, regardless of
whether the income from the securities must be included in the bank's alternative minimum
taxable income and regardless of the federal income tax treatment of the interest expense
incurred to carry the securities.
5
Number of full-time equivalent employees at end of current period. Report the number
of full-time equivalent employees of the bank and its consolidated subsidiaries as of the
report date (round to the nearest whole number). For purposes of this Memorandum item, a
bank 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 bank. However, banking
organizations should not segregate the compensation component of other intercompany cost
allocations arising from arrangements other than that described in the preceding sentence
nor calculate the related pro rata number of full-time equivalent employees for purposes of
this Memorandum item.
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 bank.)
6
Interest and fee income on loans to finance agricultural production and other loans to
farmers.
Memorandum items 6 is to be completed by:
•
•
banks with $300 million or more in total assets, and
banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, Part I, item 3)
exceeding five percent of total loans and leases held for investment and held for sale
(Schedule RC-C, Part I, item 12).
Report in this item all interest, fees, and similar charges levied against or associated with all
loans reportable in Schedule RC-C, Part I, item 3, "Loans to finance agricultural production
and other loans to farmers."
7
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If the reporting institution has applied pushdown accounting this calendar year, report
the date of the institution's acquisition. Pushdown accounting is an acquired institution’s
establishment of a new accounting basis in its separate financial statements (including its
Consolidated Reports of Condition and Income) when an acquirer obtains control of the
acquired institution and the institution retains its separate corporate existence. Under ASU
No. 2014-17, “Pushdown Accounting,” which amended ASC Subtopic 805-50, Business
Combinations–Related Issues, an acquired institution that retains its separate corporate
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Memoranda
Item No.
Caption and Instructions
7
(cont.)
existence may apply pushdown accounting upon a change-in-control event. A change-incontrol event occurs when an acquirer obtains a controlling financial interest in the acquired
institution. A controlling financial interest typically requires ownership of more than 50
percent of the voting rights in an acquired entity. For further information, see the “pushdown
accounting” section of the Glossary entry for "business combinations."
If the reporting institution was acquired during the calendar year-to-date reporting period, has
retained its separate corporate existence, and has elected to apply pushdown accounting in
its separate financial statements (including its Consolidated Reports of Condition and
Income) in accordance with the "pushdown accounting" section of the Glossary entry for
"business combinations," report the date (year, month, and day) as of which the acquisition
took place. For example, an institution that was acquired as of the close of business June 1,
2018, and elected to apply pushdown accounting in its separate financial statements
(including its Consolidated Reports of Condition and Income) would report 20180601 in this
Memorandum item for June 30, September 30, and December 31, 2018.
An acquired institution that has elected pushdown accounting also must report certain
information on its loans and leases reported as held for investment after applying pushdown
accounting in Schedule RC-C, Part I, Memorandum item 12, in the reports for June 30 and
December 31 of the calendar year of acquisition, as appropriate, regardless of whether the
institution still holds the loans and leases.
If the reporting institution has not been acquired during this calendar year or if the reporting
institution has been acquired during this calendar year but it did not elect to apply pushdown
accounting, the institution should report zeros (i.e., 00000000) for the date in this
Memorandum item.
8 - 10
11
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Not applicable.
Does the reporting bank have a Subchapter S election in effect for federal income tax
purposes for the current tax year? Indicate in the boxes marked “YES” and “NO” whether
the bank is, for federal income tax purposes, either an "S corporation" or a "qualifying
subchapter S subsidiary," as defined in Internal Revenue Code Section 1361, as of the report
date. In order to be an S corporation, the bank must have filed a valid election with the
Internal Revenue Service and obtained the consent of all of its shareholders. An election for
a bank to be a qualifying subchapter S subsidiary must have been made by a bank's parent
holding company, which must also have made a valid election to be an S corporation. In
addition, the bank (and its parent holding company, if applicable) must meet specific criteria
for federal income tax purposes at all times during which the election remains in effect.
These specific criteria include, for example, having no more than 100 qualifying shareholders
and having only one class of stock outstanding.
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Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum item 12 is to be completed by banks that are required to complete Schedule RC-C,
Part I, Memorandum items 8.b and 8.c, and is to be completed annually as of the December 31 report
date.
12
Noncash income from negative amortization on closed-end loans secured by
1-4 family residential properties. Report the amount of noncash income from negative
amortization on closed-end loans secured by 1-4 family residential properties (i.e., interest
income accrued and uncollected that has been added to principal) included in interest and
fee income on loans secured by real estate (Schedule RI, item 1.a.(1)).
Negative amortization refers to a method in which a loan is structured so that the borrower’s
minimum monthly (or other periodic) payment is contractually permitted to be less than the
full amount of interest owed to the lender, with the unpaid interest added to the loan’s
principal balance. The contractual terms of the loan provide that if the borrower allows the
principal balance to rise to a pre-specified amount or maximum cap, the loan payments are
then recast to a fully amortizing schedule. Negative amortization features may be applied to
either adjustable rate mortgages or fixed rate mortgages, the latter commonly referred to as
graduated payment mortgages (GPMs).
13
Not applicable.
NOTE: Memorandum item 14 is to be completed only by institutions that have not adopted FASB
Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit
losses. Institutions that have adopted ASU 2016-13 should leave Memorandum item 14 blank.
14
Other-than-temporary impairment losses on held-to-maturity and available-for-sale
debt securities recognized in earnings. Report the amount of other-than-temporary
impairment losses on held-to-maturity and available-for-sale debt securities that have been
recognized in earnings during the calendar year to date as discussed in the following
paragraphs. This amount is included in the realized gains (losses) on held-to-maturity and
available-for-sale securities reported in Schedule RI, items 6.a and 6.b, respectively.
When the fair value of an individual held-to-maturity or available-for-sale debt security is less
than its amortized cost basis, the security is impaired and the impairment is either temporary
or other-than-temporary. To determine whether the impairment is other-than-temporary, a
bank must apply the relevant guidance in ASC Topic 320, Investments-Debt Securities
(formerly FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity
Securities,” as amended by FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, “The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,”
and FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-ThanTemporary Impairments”) and ASC Subtopic 325-40, Investments-Other – Beneficial
Interests in Securitized Financial Assets (formerly Emerging Issues Task Force (EITF) Issue
No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests
and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial
Assets,” as amended by FSP EITF 99-20-1, “Amendments to the Impairment Guidance of
EITF Issue No. 99-20”), as appropriate.
When an other-than-temporary impairment loss has occurred on an individual debt security,
the total amount of the loss is the entire difference between the amortized cost of the debt
security and its fair value on the measurement date of the other-than-temporary impairment.
For an other-than-temporary impairment loss on a debt security that the bank intends to sell
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Memoranda
Item No.
Caption and Instructions
14
(cont.)
and on a debt security that it is more likely than not that the bank will be required to sell
before recovery of its amortized cost basis less any current-period credit loss, the total
amount of the other-than-temporary impairment loss must be recognized in earnings and
must be reported in this item.
For an other-than-temporary impairment loss on a debt security when the bank does not
intend to sell the security and it is not more likely than not that the bank will be required to sell
the security before recovery of its amortized cost basis less any current-period credit loss, the
other-than-temporary impairment loss must be separated into (a) the amount representing
the credit loss, which must be recognized in earnings, and (b) the amount related to all other
factors, which must be recognized in other comprehensive income. Report in this item the
portion of such an other-than-temporary impairment loss that represents the credit loss.
For further information, see the Glossary entry for “securities activities.”
NOTE: Memorandum items 15.a through 15.d are to be completed annually in the December report only
by institutions with $1 billion or more in total assets1 that answered "Yes" to Schedule RC-E,
Memorandum item 5, “Does your institution offer one or more consumer deposit account products,
i.e., transaction account or nontransaction savings account deposit products intended primarily for
individuals for personal, household, or family use?”
15
Components of service charges on deposit accounts. Report in the appropriate subitem
the calendar year-to-date amount of the specified category of service charges on deposit
accounts included in Schedule RI, item 5.b, “Service charges on deposit accounts.”
Consistent with the instructions for Schedule RI, item 5.b, the amount of service charges on
deposit accounts reported in Memorandum items 15.a through 15.d should be net of amounts
refunded to depositors.
The specified categories of service charges to be reported in Schedule RI, Memorandum
items 15.a through 15.c, are those levied against consumer deposit account products offered
by the reporting institution during the calendar year to date that would be reportable in
Schedule RC-E, Memorandum items 6.a, 6.b, 7.a.(1), and 7.b.(1).
Once a customer has opened a deposit account with the reporting institution that is a deposit
product intended primarily for individuals for personal, household, or family use, the institution
is not required thereafter to review the customer’s status or usage of the account to
determine whether the transaction account is being used for personal, household, or family
purposes. Thus, when reporting the amount of service charges on consumer deposit account
products in Schedule RI, Memorandum items 15.a through 15.c, below, the reporting
institution is not required to identify those individual accounts within the population of a
particular consumer deposit account product that are not being used for personal, household,
or family purposes and remove any service charges levied against these accounts from the
total amounts of overdraft-related, periodic maintenance, and customer automated teller
machine (ATM) fees charged to customer accounts within that consumer deposit product.
Treatment of Transfer Fees – If the reporting institution levies a service charge or fee on a
consumer deposit account for a transfer between the account holder’s deposit account and
1
In general, the determination as to whether an institution has $1 billion or more in total assets is measured as of
June 30 of the previous calendar year. See pages 6a and 7 of the General Instructions for guidance on shifts in
reporting status.
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Memoranda
Item No.
Caption and Instructions
15
(cont.)
another account (including a loan account) regardless of the means by which the transfer is
effected (e.g., in person, by telephone, via an ATM, and via online account access), the
transfer fee should be reported in Schedule RI, Memorandum item 15.d, “All other service
charges on deposit accounts.” In contrast, if the reporting institution levies a service charge
or fee on a consumer deposit account for the account holder’s use of an ATM to effect a
transfer between the account holder’s deposit account and another account (and not for the
transfer itself), the service charge or fee is considered a fee for accessing the ATM and
should be reported in Schedule RI, Memorandum item 15.c, “Consumer customer automated
teller machine (ATM) fees levied on those transaction account and nontransaction savings
account deposit products intended primarily for individuals for personal, household, or family
use,” and is not considered a transfer fee.
The sum of Memorandum items 15.a through 15.d must equal Schedule RI, item 5.b.
15.a
Consumer overdraft-related service charges levied on those transaction account and
nontransaction savings account deposit products intended primarily for individuals for
personal, household, or family use. For deposit account products intended, marketed, or
presented to the public primarily for individuals for personal, household, or family use, report
the amount of service charges and fees related to the processing of payments and debits
against insufficient funds, including “nonsufficient funds (NSF) check charges,” that the
reporting institution assesses with respect to items that it either pays or returns unpaid, and
all subsequent charges levied against overdrawn accounts, but excluding those fees
equivalent to interest and reported in Schedule RI, item 1, “Interest and fee income on loans.”
15.b
Consumer account periodic maintenance charges levied on those transaction account
and nontransaction savings account deposit products intended primarily for
individuals for personal, household, or family use. For deposit account products
intended, marketed, or presented to the public primarily for individuals for personal,
household, or family use, report the amount of service charges levied on such consumer
deposit accounts for account holders’ maintenance of their deposit accounts with the
reporting institution (often labeled “monthly maintenance charges”). Include recurring fees
not subject to waiver, which include fixed monthly or other periodic charges levied against a
consumer deposit account for the maintenance of the account that the account holder cannot
avoid under any circumstances, including, for example, by maintaining other deposit or loan
accounts with the institution, maintaining a minimum deposit balance, or engaging in a
specified level of account activity (such as the number of debit card transactions) during a
month or other period. Also include maintenance charges subject to waiver during a month
or other period that have not been waived, but have been levied against a consumer deposit
account because of the account holder’s failure to maintain specified minimum deposit
balances or meet other requirements (e.g., requirements related to transacting and
purchasing other services).
Exclude so-called “per-check fees” levied on consumer deposit accounts regardless of
whether such fees are charged, for example, (a) for each check that is paid during a month
or other period, (b) if a specified minimum account balance is not maintained during a month
or other period, or (c) if the number of checks paid during a month or other period exceeds
a specified number. “Per-check fees” should be reported in Schedule RI, Memorandum
item 15.d, “All other service charges on deposit accounts.” In addition, exclude so-called
“per-item fees” that function in a manner similar to “per-check fees” and report such fees in
Memorandum item 15.d.
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Item No.
Caption and Instructions
15.b
(cont.)
Also exclude event-based service charges and fees levied on consumer deposit accounts,
such as stop payment fees and wire transfer fees. Such service charges and fees should be
reported in Schedule RI, Memorandum item 15.d.
15.c
Consumer customer automated teller machine (ATM) fees levied on those transaction
account and nontransaction savings account deposit products intended primarily for
individuals for personal, household, or family use. For deposit account products
maintained at the reporting institution and intended, marketed, or presented to the public
primarily for individuals for personal, household, or family use, report the amount of service
charges and fees levied against such consumer deposit accounts by the reporting institution
for the account holder’s use of ATMs or remote service units (RSUs) owned, operated, or
branded by the institution, other institutions, or other third-party, non-bank ATM operators to
access the account holder’s consumer deposit accounts at the institution for purposes of
conducting transactions and other activities. Such transactions and other activities include
deposits to or withdrawals from consumer deposit accounts, account balance inquiries, and
transfers between the account holder’s consumer deposit account and another account
(including a loan account). (See the “Treatment of Transfer Fees” above in the instructions
for Schedule RI, Memorandum item 15.)
Exclude service charges levied by the reporting institution against deposit accounts
maintained at other institutions for transactions conducted through the use of ATMs or RSUs
owned, operated, or branded by the reporting institution. Also exclude debit card interchange
fees. Such service charges and interchange fees should be reported in Schedule RI, item 5.l,
“Other noninterest income,” not in Schedule RI, item 5.b.
15.d
All other service charges on deposit accounts. Report all other service charges on
deposit accounts levied by the reporting institution and not reported in Schedule RI,
Memorandum items 15.a, 15.b, and 15.c. Include service charges and fees on the reporting
institution’s deposit account products intended for use by a broad range of depositors (which
may include individuals), rather than being intended, marketed, or presented to the public
primarily for individuals for personal, household, or family use. For deposit account products
intended for use by a broad range of depositors, the reporting institution need not identify the
fees charged to accounts held by individuals for personal, household, or family use and need
not report these fees in one of the three categories of consumer deposit account fees above.
Include “per-check fees” and “per-item fees” (as discussed in the instructions to Schedule RI,
Memorandum item 15.b, above) and event-based service charges and fees (such as stop
payment fees and wire transfer fees) levied on deposit accounts, including consumer deposit
accounts. See the instructions for Schedule RI, Memorandum item 15, above for information
on the “Treatment of Transfer Fees.”
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RI-A - EQUITY CAPITAL
SCHEDULE RI-A – CHANGES IN BANK EQUITY CAPITAL
General Instructions
This schedule is to be completed quarterly by all banks.
Total bank equity capital includes perpetual preferred stock, common stock, surplus, retained earnings,
and accumulated other comprehensive income. All amounts in Schedule RI-A, other than those reported
in items 1, 3, and 12, should represent net aggregate changes for the calendar year-to-date. Report all
net decreases and losses (net reductions in bank equity capital) with a minus (-) sign.
Item No.
1
Caption and Instructions
Total bank equity capital most recently reported for the December 31, 20xx, Reports
of Condition and Income. Report the bank's total equity capital balance as reported in the
Reports of Condition and Income for the previous calendar year-end after the effect of all
corrections and adjustments to total bank equity capital that were made in any amended
report(s) for the previous calendar year-end.
For banks opened since January 1 of the current calendar year, report a zero in this item.
Report the bank's opening (original) total equity capital in Schedule RI-A, item 5, "Sale,
conversion, acquisition, or retirement of capital stock, net."
2
Cumulative effect of changes in accounting principles and corrections of material
accounting errors. Report the sum of the cumulative effect, net of applicable income taxes,
of all changes in accounting principles adopted during the calendar year-to-date reporting
period that were applied retroactively and for which prior years' financial statements were
restated and all corrections resulting from material accounting errors that were made in prior
years' Reports of Condition and Income and not corrected by the filing of an amended report
for the period in which the error was made.
Include only those corrections that result from:
(1) Mathematical mistakes.
(2) Mistakes in applying accounting principles.
(3) Improper use of information which existed when the prior Reports of Condition and
Income were prepared.
(4) A change from an accounting principle that is neither accepted nor sanctioned by bank
supervisors to one that is acceptable to supervisors.
The effect of accounting errors differs from the effect of changes in accounting estimates.
Changes in accounting estimates are an inherent part of the accrual accounting process.
Report the effect of any changes in accounting estimates in the appropriate line items of
Schedule RI, Income Statement.
The cumulative effect of a change in accounting principle is the difference between (1) the
balance in the retained earnings account at the beginning of the year in which the change is
made and (2) the balance in the retained earnings account that would have been reported
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FFIEC 051
RI-A - EQUITY CAPITAL
Item No.
Caption and Instructions
2
(cont.)
at the beginning of the year had the newly adopted accounting principle been applied in all
prior periods.
State the dollar amount of and describe the cumulative effect of each accounting principle
change and accounting error correction included in this item in Schedule RI-E, item 4.
Refer to the Glossary entry for "accounting changes" for additional information on how to
report the effects of changes in accounting principles, corrections of errors, and changes in
estimates.
3
Balance end of previous calendar year as restated. Report the sum of items 1 and 2.
4
Net income (loss) attributable to bank. Report the net income (loss) attributable to the
bank for the calendar year-to-date as reported in Schedule RI, item 14, "Net income (loss)
attributable to bank."
5
Sale, conversion, acquisition, or retirement of capital stock, net (excluding treasury
stock transactions). Report the changes in the bank's total equity capital resulting from:
(1) Sale of the bank's perpetual preferred stock or common stock. Limited-life preferred
stock is not included in equity capital; any proceeds from the sale of limited-life preferred
stock during the calendar year-to-date is not to be reported in this schedule.
(2) Exercise of stock options, including:
(a) Any income tax benefits to the bank resulting from the sale of the bank's own stock
acquired under a qualified stock option within three years of its purchase by the
employee who had been granted the option.
(b) Any tax benefits to the bank resulting from the exercise (or granting) of nonqualified
stock options (on the bank's stock) based on the difference between the option price
and the fair market value of the stock at the date of exercise (or grant).
(3) Conversion of convertible debt, limited-life preferred stock, or perpetual preferred stock
into perpetual preferred or common stock.
(4) Redemption of perpetual preferred stock or common stock.
(5) Retirement of perpetual preferred stock or common stock.
(6) Capital-related transactions involving the bank's Employee Stock Ownership Plan.
(7) The awarding of share-based employee compensation classified as equity. Under
ASC Topic 718, Compensation-Stock Compensation (formerly FASB Statement
No. 123(R), “Share-Based Payment”), the compensation cost for such an award must be
recognized over the requisite service period with a corresponding credit to equity. This
reporting treatment applies regardless of whether the shares awarded to an employee
are shares of bank stock or shares of stock in the bank's parent holding company.
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RI-A-2
(3-17)
RI-A - EQUITY CAPITAL
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RI-A - EQUITY CAPITAL
Item No.
Caption and Instructions
5
(cont.)
Include in this item:
(1) The net decrease in equity capital that occurs when cash is distributed in lieu of fractional
shares in a stock dividend.
(2) The net increase in equity capital when a stockholder who receives a fractional share
from a stock dividend purchases the additional fraction necessary to make a whole share.
Exclude treasury stock transactions from this item (report such transactions in Schedule RI-A,
item 6, below).
For banks opened since January 1 of the year-to-date reporting period, report opening
(original) equity capital in this item. Pre-opening income earned and expenses incurred from
the bank's inception until the date the bank commenced operations should be reported in the
Report of Income using one of the two following methods, consistent with the manner in
which the bank reports pre-opening income and expenses for other financial reporting
purposes:
(1) Pre-opening income and expenses for the entire period from the bank's inception until the
date the bank commenced operations should be reported in the appropriate items of
Schedule RI, Income Statement, each quarter during the calendar year in which
operations commenced; or
(2) Pre-opening income and expenses for the period from the bank's inception until the
beginning of the calendar year in which the bank commenced operations should be
included, along with the bank's opening (original) equity capital, in this item. The net
amount of these pre-opening income and expenses should be identified and described in
Schedule RI-E, item 7. Pre-opening income earned and expenses incurred during the
calendar year in which the bank commenced operations should be reported in the
appropriate items of Schedule RI, Income Statement, each quarter during the calendar
year in which operations commenced.
6
Treasury stock transactions, net. Report the change in the bank’s total equity capital
during the calendar year to date from the acquisition (without retirement) and resale or other
disposal of the bank's own perpetual preferred stock or common stock, i.e., treasury stock
transactions (see the Glossary entry for "treasury stock").
7
Changes incident to business combinations, net. If the reporting institution purchased
another institution or business during the year-to-date reporting period, report the fair value of
any perpetual preferred or common shares issued (less the direct cost of issuing the shares).
Exclude the fair value of limited-life preferred stock issued in connection with purchase
acquisitions. Refer to the Glossary entry for "business combinations" for further information
on purchase acquisitions.
If the reporting institution was acquired in a transaction that became effective during the
reporting period, retained its separate corporate existence, and elected to apply pushdown
accounting in its separate financial statements (including its Consolidated Reports of
Condition and Income), report in this item the initial increase or decrease in equity capital that
results from the application of pushdown accounting, i.e., the difference between the
institution's total equity capital as of the end of the previous calendar year and its restated
equity capital after the pushdown adjusting entries have been recorded as of the acquisition
date. For further information on pushdown accounting, refer to the Glossary entry for
"business combinations."
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FFIEC 051
RI-A - EQUITY CAPITAL
Item No.
Caption and Instructions
7
(cont.)
If the reporting institution was involved in a transaction between entities under common
control that became effective during the year-to-date reporting period and has been
accounted for in a manner similar to a pooling of interests, report in this item the historical
equity capital balances as of the end of the previous calendar year of the institution or other
business that was combined with the reporting institution in the transaction. For further
information on transactions between entities under common control, refer to the Glossary
entry for "business combinations."
8
LESS: Cash dividends declared on preferred stock. Report all cash dividends declared
on limited-life preferred and perpetual preferred stock during the calendar year-to-date,
including dividends not payable until after the report date.
Do not include dividends declared during the previous calendar year but paid in the current
period.
Refer to the Glossary entry for "dividends" for further information on cash dividends.
9
LESS: Cash dividends declared on common stock. Report all cash dividends declared
on common stock during the calendar year-to-date, including dividends not payable until after
the report date.
Do not include dividends declared during the previous calendar year but paid in the current
period.
For further information on cash dividends, see the Glossary entry for "dividends."
10
Other comprehensive income. Report the institution’s other comprehensive income,
including reclassification adjustments, for the calendar year-to-date, net of applicable income
taxes, if any. Reclassification adjustments are adjustments made to avoid double counting of
items in comprehensive income that are presented as part of net income for the calendar
year-to-date reporting period that also had been presented as part of other comprehensive
income in that reporting period or earlier reporting periods. If the amount to be reported in
this item represents a reduction in the institution’s equity capital, report the amount with a
minus (-) sign.
Items of other comprehensive income include:
(1) The change in net unrealized holding gains (losses) on the institution’s available-for-sale
debt securities.
(2) Unrealized holding gains (losses) that result from a debt security being transferred into
the available-for-sale category from the held-to-maturity category.
(3) For a debt security transferred into the held-to-maturity category from the available-forsale category, amortization of the unrealized holding gain (loss) on the debt security at
the date of transfer. Consistent with ASC Subtopic 320, Investments-Debt Securities,
this unrealized holding gain (loss) should be amortized over the remaining life of the debt
security as an adjustment of yield.
(4) The portion of other-than-temporary impairment losses on available-for-sale and
held-to-maturity debt securities that was not recognized in earnings in accordance with
ASC Topic 320, Investments-Debt Securities, subsequent decreases (if not
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FFIEC 051
Item No.
10
(cont.)
RI-A - EQUITY CAPITAL
Caption and Instructions
other-than-temporary impairment losses) or increases in the fair value of available-forsale debt securities previously written down as other-than-temporarily impaired, and
subsequent accretion (based on the amount and timing of future estimated cash flows) of
the portion of other-than-temporary impairment losses on held-to-maturity debt securities
not recognized in earnings.
(5) The change in the institution’s accumulated net gains (losses) (effective portion) on
derivative instruments that are designated and qualify as cash flow hedges.
(6) Gains (losses) and transition assets or obligations associated with single-employer
defined benefit pension and other postretirement plans not recognized immediately as a
component of net periodic benefit cost and prior service costs or credits associated with
such plans, which are accounted for in accordance with ASC Topic 715, CompensationRetirement Benefits.
(7) The portion of the total change in the fair value of a liability resulting from a change in the
instrument-specific credit risk (“own credit risk”) when the institution has elected to
measure the liability at fair value in accordance with the fair value option for financial
instruments.
Exclude the year-to-date change in net unrealized holding gains (losses) on equity securities
with readily determinable fair values not held for trading (report in Schedule RI, item 8.b).
For further guidance on reporting other comprehensive income, see ASC Topic 220,
Comprehensive Income.
11
Other transactions with stockholders (including a parent holding company). Report the
net aggregate amount of transactions with the institution's stockholders, including its parent
holding company, if any, that affect equity capital directly (other than those transactions
reported in Schedule RI-A, items 5, 6, 8, and 9, above), such as:
(1) Capital contributions other than those for which stock has been issued to stockholders
(report issuances of perpetual preferred and common stock and sales of treasury stock in
Schedule RI-A, items 5 and 6, respectively; issuances of limited-life preferred stock are
not reported in Schedule RI-A).
(2) Dividends distributed to stockholders in the form of property rather than cash (report cash
dividends in Schedule RI-A, items 8 or 9, as appropriate). Record such property
dividends at the fair value of the transferred asset. Include any gain or loss recognized
on the disposition of the asset in the determination of net income for the calendar
year-to-date in Schedule RI, Income Statement. Refer to the Glossary entry for
"dividends" for additional information on property dividends.
(3) Return-of-capital transactions in which contributed capital (i.e., surplus) is reduced
without retiring stock and cash is distributed to the institution’s stockholders.
State the dollar amount of and describe each transaction included in this item in
Schedule RI-E, item 5.
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Item No.
12
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Caption and Instructions
Total bank equity capital end of current period. Report the sum of Schedule RI-A, items 3
through 11. This item must equal Schedule RC, item 27.a, "Total bank equity capital."
RI-A-6
(12-20)
RI-A - EQUITY CAPITAL
FFIEC 051
RI-B - ALLOWANCE
SCHEDULE RI-B – CHARGE-OFFS AND RECOVERIES ON LOANS
AND LEASES AND CHANGES IN ALLOWANCES FOR CREDIT
LOSSES
Part I. Charge-offs and Recoveries on Loans and Leases
General Instructions
This part has two columns. In column A report loans and leases charged off against the allowance for
loan and lease losses during the current calendar year-to-date. Also include in column A write-downs to
fair value on loans (and leases) transferred to the held-for-sale account during the calendar year-to-date
that occurred when (1) the reporting bank decided to sell loans that were not originated or otherwise
acquired with the intent to sell and (2) the fair value of those loans had declined for any reason other than
a change in the general market level of interest or foreign exchange rates. In column B report amounts
recovered through the allowance for loan and lease losses during the calendar year-to-date on loans and
leases previously charged off.
For those banks required to establish and maintain an allocated transfer risk reserve as specified in
Section 905(a) of the International Lending Supervision Act of 1983, include in column A loans and leases
charged off against the allocated transfer risk reserve during the current calendar year-to-date. Include in
column B amounts recovered through the allocated transfer risk reserve during the calendar year-to-date
on loans and leases previously charged off against this reserve.
These instructions should be read in conjunction with the Glossary entry for "allowance for loan and lease
losses."
Business Combinations, Pushdown Accounting Transactions, and Transactions between Entities under
Common Control – If the reporting institution entered into a business combination that became effective
during the year-to-date reporting period and has been accounted for under the acquisition method,
include the charge-offs and recoveries of the acquired institution or other business only after its
acquisition. Similarly, if the reporting institution was acquired in a transaction that became effective
during the reporting period, retained its separate corporate existence, and elected to apply pushdown
accounting in its separate financial statements (including its Consolidated Reports of Condition and
Income), include only the charge-offs and recoveries from the date of the institution's acquisition through
the end of the year-to-date reporting period. If the reporting institution was involved in a transaction
between entities under common control that became effective during the year-to-date reporting period
and has been accounted for in a manner similar to a pooling of interests, report the charge-offs and
recoveries of the combined entities for the entire calendar year-to-date as though they had combined at
the beginning of the year. For further information on business combinations, pushdown accounting, and
transactions between entities under common control, see the Glossary entry for "business combinations."
Item Instructions
Item No.
Caption and Instructions
1
Loans secured by real estate. Report in the appropriate subitem and column loans secured
by real estate (as defined for Schedule RC-C, Part I, item 1) charged off and recovered.
1.a
Construction, land development, and other land loans. Report in the appropriate
subitem and column construction, land development, and other land loans (as defined for
Schedule RC-C, Part I, item 1.a) charged off and recovered.
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FFIEC 051
RI-B - ALLOWANCE
Part I. (cont.)
Item No.
Caption and Instructions
1.a.(1)
1-4 family residential construction loans. Report in columns A and B, as appropriate,
1-4 family residential construction loans (as defined for Schedule RC-C, Part I, item 1.a.(1))
charged off and recovered.
1.a.(2)
Other construction loans and all land development and other land loans. Report in
columns A and B, as appropriate, other construction loans and all land development and
other land loans (as defined for Schedule RC-C, Part I, item 1.a.(2)) charged off and
recovered.
1.b
Secured by farmland. Report in columns A and B, as appropriate, loans secured by
farmland (as defined for Schedule RC-C, Part I, item 1.b) charged off and recovered.
1.c
Secured by 1-4 family residential properties. Report in the appropriate subitem and
column loans secured by 1-4 family residential properties (as defined for Schedule RC-C,
Part I, item 1.c) charged off and recovered.
1.c.(1)
Revolving, open-end loans secured 1-4 family residential properties and extended
under lines of credit. Report in columns A and B, as appropriate, loans secured by
revolving, open-end loans secured by 1-4 family residential properties and extended under
line of credit (as defined for Schedule RC-C, Part I, item 1.c.(1)) charged-off and recovered.
1.c.(2)
Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem and column closed-end loans secured by 1-4 family residential properties (as defined
for Schedule RC-C, Part I, item 1.c.(2)) charged-off and recovered.
1.c.(2)(a)
Secured by first liens. Report in columns A and B, as appropriate, closed-end loans
secured by first liens on 1-4 family residential properties (as defined for Schedule RC-C,
Part I, item 1.c.(2)(a)) charged-off and recovered.
1.c.(2)(b)
Secured by junior liens. Report in columns A and B, as appropriate, closed-end loans
secured by junior liens on 1-4 family residential properties (as defined for Schedule RC-C,
Part I, item 1.c.(2)(b)) charged-off and recovered. Include loans secured by junior liens in this
item even if the bank also holds a loan secured by a first lien on the same 1-4 family
residential property and there are no intervening junior liens.
1.d
Secured by multifamily (5 or more) residential properties. Report in columns A and B, as
appropriate, loans secured by multifamily (5 or more) residential properties (as defined for
Schedule RC-C, Part I, item 1.d) charged-off and recovered.
1.e
Secured by nonfarm nonresidential properties. Report in the appropriate subitem and
column loans secured by nonfarm nonresidential properties (as defined for Schedule RC-C,
Part I, item 1.e) charged off and recovered.
1.e.(1)
Loans secured by owner-occupied nonfarm nonresidential properties. Report in
columns A and B, as appropriate, loans secured by owner-occupied nonfarm nonresidential
properties (as defined for Schedule RC-C, Part I, item 1.e.(1)) charged off and recovered.
1.e.(2)
Loans secured by other nonfarm nonresidential properties. Report in columns A and B,
as appropriate, loans secured by other nonfarm nonresidential properties (as defined for
Schedule RC-C, Part I, item 1.e.(2)) charged off and recovered.
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FFIEC 051
RI-B - ALLOWANCE
Part I. (cont.)
Item No.
Caption and Instructions
2 and 3
Not applicable.
4
Commercial and industrial loans. Report in columns A and B, as appropriate, commercial
and industrial loans (as defined for Schedule RC-C, Part I, item 4) charged-off and recovered.
5
Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem and column loans to individuals for household, family, and other
personal expenditures (as defined for Schedule RC-C, Part I, item 6) charged-off and
recovered.
5.a
Credit cards. Report in columns A and B, as appropriate, all extensions of credit under
credit cards (as defined for Schedule RC-C, Part I, items 6.a) charged-off and recovered.
5.b
Automobile loans. Report in columns A and B, as appropriate, all loans arising from retail
sales of passenger cars and other vehicles such as minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use (as defined for Schedule RC-C, Part I,
item 6.c) charged-off and recovered.
5.c
Other (includes revolving credit plans other than credit cards and other consumer
loans). Report in columns A and B, as appropriate, all other extensions of credit to
individuals for household, family, and other personal expenditures (as defined for
Schedule RC-C, Part I, items 6.b and 6.d) charged-off and recovered.
6
Not applicable.
7
All other loans. Report in columns A and B, as appropriate, loans to depository institutions
and acceptances of other banks, loans to finance agricultural production and other loans to
farmers, obligations (other than securities and leases) of states and political subdivisions in
the U.S., and loans to nondepository financial institutions and other loans (as defined for
Schedule RC-C, Part I, items 2, 3, 8, and 9) charged-off and recovered.
8
Lease financing receivables. Report in columns A and B, as appropriate, all lease
financing receivables (as defined for Schedule RC-C, Part I, item 10) charged-off and
recovered.
9
Total. Report in columns A and B the sum of item 1 through 8. The amount reported in
column A must equal Schedule RI-B, Part II, item 3, column A, “Charge-offs,” below. The
amount reported in column B must equal Schedule RI-B, Part II, item 2, column A,
“Recoveries,” below.
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Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
1
Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RI-B, Part I, items 4 and 7, above.
Report in columns A and B, as appropriate, loans to finance commercial real estate,
construction, and land development activities not secured by real estate (as defined for
Schedule RC-C, Part I, Memorandum item 3) charged off and recovered. Such loans will
have been included in items 4 and 7 of Schedule RI-B, Part I, above. Exclude from this item
all loans secured by real estate included in item 1 of Schedule RI-B, Part I, above.
2
Not applicable.
3
Loans to finance agricultural production and other loans to farmers.
Memorandum item 3 is to be completed by:
• banks with $300 million or more in total assets, and
• banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, Part I, item 3,)
exceeding five percent of total loans and leases held for investment and held for sale
(Schedule RC-C, Part I, item 12).
Report in columns A and B, as appropriate, loans to finance agricultural production and other
loans to farmers (as defined for Schedule RC-C, Part I, item 3) charged off and recovered.
Such loans will have been included in Schedule RI-B, Part I, item 7, above.
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RI-B - ALLOWANCE
Part II. Changes In Allowances for Credit Losses
General Instructions
This part has three columns for information on year-to-date activity in the allowances for credit losses,
one for each of the following three asset categories: (1) loans and leases held for investment (column A),
(2) held-to-maturity debt securities (column B), and (3) available-for-sale debt securities (column C).
Institutions that have not adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13),
which governs the accounting for credit losses, should report the reconcilement of the allowance for loan
and lease losses on a calendar year-to-date basis in column A. Such institutions should leave columns B
and C blank.
Institutions that have adopted ASU 2016-13 should report reconcilements of the allowances for credit
losses on loans and leases held for investment, held-to-maturity debt securities, and available-for-sale
debt securities in columns A, B, and C, respectively.
For those banks required to establish and maintain an allocated transfer risk reserve as specified in
Section 905(a) of the International Lending Supervision Act of 1983, the reconcilement should include in
column A the activity in the allocated transfer risk reserve during the calendar year-to-date that relates to
loans and leases held for investment. Institutions that have adopted ASU 2016-13 should report such
activity that relates to held-to-maturity and available-for-sale debt securities in columns B and C,
respectively.
Exclude the balances of the allowance for credit losses on off-balance sheet credit exposures reported
in Schedule RC-G, item 3, and any capital reserves included in Schedule RC, item 26.a, "Retained
earnings," and the effects of any transactions therein.
Refer to the Glossary entry for "allowance for loan and lease losses" for further information.
Business Combinations, Pushdown Accounting Transactions, and Transactions between Entities under
Common Control – If the reporting institution entered into a business combination that became effective
during the year-to-date reporting period and has been accounted for under the acquisition method,
include the recoveries, charge-offs, and provisions of the acquired institution or other business only after
its acquisition. Under ASC Topic 805, Business Combinations (formerly FASB Statement No. 141(R),
“Business Combinations”), the acquired loans and leases must be measured at their acquisition-date fair
values. Therefore, regardless of whether the reporting institution has adopted ASU 2016-13, the
institution may not carry over the allowance for loan and lease losses or the allowances for credit losses,
as applicable, of the acquired institution or other business as of the acquisition date. However, for a
reporting institution that has adopted ASU 2016-13 and has acquired financial assets in a business
combination that management has determined to be purchased credit-deteriorated as of the acquisition
date, the institution should report the initial allowance gross-up amounts established upon the purchase of
these assets, which are recorded at the date of acquisition as an addition to the purchase price to
determine the initial amortized cost basis of the assets, should be reported as positive amounts in the
applicable columns of Schedule RI-B, Part II, item 6, “Adjustments.”
Similarly, if the reporting institution was acquired in a transaction that became effective during the year-todate reporting period, retained its separate corporate existence, and elected to apply pushdown
accounting in its separate financial statements (including its Consolidated Reports of Condition and
Income), include only the recoveries, charge-offs, and provisions from the date of the institution's
acquisition through the end of the year-to-date reporting period. When applying pushdown accounting,
regardless of whether the reporting institution has adopted ASU 2016-13, the reporting institution’s loans
and leases must be restated to their acquisition-date fair values and the institution may not carry over its
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Part II. (cont.)
General Instructions (cont.)
allowance for loan and lease losses or its allowances for credit losses, as applicable, as of the acquisition
date. As a consequence:
• For a reporting institution that has not adopted ASU 2016-13, the amount reported in Schedule RI-B,
Part II, item 1, column A, for the balance of the allowance for loan and lease losses most recently
reported for the end of the previous calendar year must be reported as a negative amount in
Schedule RI-B, Part II, item 6, column A, "Adjustments."
• For a reporting institution that has adopted ASU 2016-13, the amounts reported in Schedule RI-B,
Part II, item 1, columns A, B, and C, for the balances of the allowances for credit losses most recently
reported for the end of the previous calendar year must be reported as negative amounts in
Schedule RI-B, Part II, item 6, columns A, B, and C, "Adjustments." In addition, when applying
pushdown accounting, for those financial assets that management has determined to be purchased
credit-deteriorated as of the institution’s acquisition date, the institution should report as positive
amounts in the applicable columns of Schedule RI-B, Part II, item 6, “Adjustments,” the initial
allowance gross-up amounts established as of the acquisition date, which are recorded as an addition
to the acquisition-date fair values of these purchased credit-deteriorated assets to determine their
initial amortized cost basis.
If the reporting institution was involved in a transaction between entities under common control that
became effective during the year-to-date reporting period and has been accounted for in a manner similar
to a pooling of interests, report the recoveries, charge-offs, and provisions of the combined entities for the
entire calendar year-to-date as though they had combined at the beginning of the year.
• A reporting institution that has not adopted ASU 2016-13 should report the balance as of the end
of the previous calendar year of the allowance for loan and lease losses of the institution or other
business that combined with the reporting institution in the common control transaction in
Schedule RI-B, Part II, item 6, column A, "Adjustments."
• A reporting institution that has adopted ASU 2016-13 should report the balances as of the end of the
previous calendar year of the allowances for credit losses of the institution or other business that
combined with the reporting institution in the common control transaction in Schedule RI-B, Part II,
item 6, columns A, B, or C, "Adjustments."
For further information on business combinations, pushdown accounting, and transactions between
entities under common control, see the Glossary entry for "business combinations."
Item Instructions
Item No.
1
Caption and Instructions
Balance most recently reported in the December 31, 20xx, Reports of Condition and
Income. For an institution that has not adopted FASB Accounting Standards Update No.
2016-13 (ASU 2016-13), which governs the accounting for credit losses, report in column A
the balance of the institution's allowance for loan and lease losses as reported in the Reports
of Condition and Income for the previous calendar year-end after the effect of all corrections
and adjustments to the allowance for loan and lease losses that were made in any amended
report(s) the previous calendar year-end.
For an institution that has adopted ASU 2016-13, report in columns A, B, and C the balances
of the institution’s allowances for credit losses on loans and leases held for investment, heldto-maturity debt securities, and available-for-sale debt securities, respectively, as reported in
the Consolidated Reports of Condition and Income for the previous calendar year-end after
the effect of all corrections and adjustments to these allowances for credit losses that were
made in any amended report(s) for the previous calendar year-end. In the year of adoption of
ASU 2016-13, institutions should report a zero balance in columns B and C.
FFIEC 051
RI-B-6
(3-19)
RI-B - ALLOWANCE
FFIEC 051
RI-B - ALLOWANCE
Part II. (cont.)
Item No.
2
Caption and Instructions
Recoveries. For an institution that has not adopted ASU 2016-13, report in column A the
amount credited to the allowance for loan and lease losses for recoveries during the calendar
year-to-date on amounts previously charged against the allowance for loan and lease losses.
The amount reported in column A for this item must equal Schedule RI-B, Part I, item 9,
column B.
For an institution that has adopted ASU 2016-13, report in columns A, B, and C the amounts
credited to the allowances for credit losses on loans and leases held for investment, held-tomaturity debt securities, and available-for-sale debt securities, respectively, for recoveries
during the calendar year-to-date on amounts previously charged against these allowances for
credit losses. The amount reported in column A for this item must equal Schedule RI-B,
Part I, item 9, column B.
3
LESS: Charge-offs. For an institution that has not adopted ASU 2016-13, report in
column A the amount of all loans and leases charged against the allowance for loan and
lease losses during the calendar year-to-date. The amount reported in column A for this item
must equal Schedule RI-B, Part I, item 9, column A, "Total" charge-offs, less Schedule RI-B,
Part II, item 4, “LESS: Write-downs arising from transfers of financial assets.”
For an institution that has adopted ASU 2016-13, report in columns A, B, and C the amounts
of loans and leases held for investment, held-to-maturity debt securities, and available-forsale debt securities charged against the allowances for credit losses on loans and leases
held for investment, held-to-maturity debt securities, and available-for-sale debt securities,
respectively, during the calendar year-to-date. The amount reported in column A for this item
must equal Schedule RI-B, Part I, item 9, column A, "Total" charge-offs, less Schedule RI-B,
Part II, item 4, column A, “LESS: Write-downs arising from transfers of financial assets.”
4
LESS: Write-downs arising from transfers of financial assets. For an institution that has
not adopted ASU 2016-13, report in column A the amount of write-downs to fair value
charged against the allowance for loan and lease losses resulting from transfers of loans and
leases to a held-for-sale account during the calendar year-to-date that occurred when:
• The reporting institution decided to sell loans and leases that were not originated or
otherwise acquired with the intent to sell, and
• The fair value of those loans and leases had declined for any reason other than a change
in the general market level of interest or foreign exchange rates.
For an institution that has adopted ASU 2016-13, report in columns A, B, and C the amounts
of write-downs to fair value charged against the allowances for credit losses on loans and
leases held for investment, held-to-maturity debt securities, and available-for-sale debt
securities, respectively, resulting from transfers of loans and leases to a held-for-sale account
(resulting from the events described above), or transfers of held-to-maturity debt securities
and available-for-sale debt securities between held-to-maturity, available-for-sale, and trading
accounts during the calendar year-to-date.
5
FFIEC 051
Provisions for credit losses. For an institution that has not adopted ASU 2016-13, report in
column A the amount expensed as the provision for loan and losses during the calendar
year-to-date. The provision for loan and lease losses represents the amount needed to make
the allowance for loan and lease losses adequate to absorb estimated loan and lease losses,
based upon management's evaluation of the bank's current loan and lease exposures. The
amount reported in this item must equal Schedule RI, item 4. If the amount reported in this
item is negative, report it with a minus (-) sign.
RI-B-7
(3-19)
RI-B - ALLOWANCE
FFIEC 051
RI-B - ALLOWANCE
Part II. (cont.)
Item No.
Caption and Instructions
5
(cont.)
For an institution that has adopted ASU 2016-13, report in columns A, B, and C the amounts
columns A, B, and C the amounts expensed as provisions for credit losses (or reversals of
provisions) on loans and leases held for investment, held-to-maturity debt securities, and
available-for-sale debt securities, respectively, during the calendar year-to-date. Provisions
for credit losses (or reversals of provisions) on loans and leases held for investment and
held-to-maturity debt securities represent the amounts necessary to adjust the related
allowances for credit losses at the quarter-end report date for management’s current estimate
of expected credit losses on these assets. Provisions for credit losses (or reversals of
provisions) on available-for-sale debt securities represent changes during the calendar year
to date in the amount of impairment related to credit losses on individual available-for-sale
debt securities. The sum of the amounts reported in item 5, columns A through C, plus
Schedule RI-B, Part II, Memorandum item 5, “Provisions for credit losses on other financial
assets measured at amortized cost,” must equal Schedule RI, item 4. If the amount reported
in column A, B, or C for this item is negative, report it with a minus (-) sign.
6
Adjustments. Report all activity in the allowance for loan and lease losses or the allowances
for credit losses, as applicable, that cannot be properly reported in Schedule RI-B, Part II,
items 2 through 5, above.
If the reporting institution was acquired in a transaction that became effective during the yearto-date reporting period, retained its separate corporate existence, and elected to apply
pushdown accounting in its separate financial statements (including its Consolidated Reports
of Condition and Income):
• A reporting institution that has not adopted ASU 2016-13 should report in column A of
this item as a negative amount the balance of the allowance for loan and lease losses
most recently reported for the end of the previous calendar year, as reported in
Schedule RI-B, Part II, item 1, column A, above.
• A reporting institution that has adopted ASU 2016-13 should report as negative amounts
in columns A, B, and C of this item the balances of the allowances for credit losses on
loans and leases held for investment, held-to-maturity debt securities, and available-forsale debt securities, respectively, most recently reported for the end of the previous
calendar year in Schedule RI-B, Part II, item 1, columns A, B, and C, above. In addition,
when applying pushdown accounting, for those financial assets that management has
determined to be purchased credit-deteriorated as of the institution’s acquisition date, the
institution should report as positive amounts in columns A, B, and C of this item, as
appropriate, the initial allowance gross-up amounts established as of the acquisition date,
which are recorded as an addition to the acquisition-date fair values of these purchased
credit-deteriorated assets to determine their initial amortized cost basis.
If the reporting institution was involved in a transaction between entities under common
control that became effective during the year-to-date reporting period and has been
accounted for in a manner similar to a pooling of interests:
• A reporting institution that has not adopted ASU 2016-13 should report in column A of
this item the balance as of the end of the previous calendar year of the allowance for loan
and lease losses of the institution or other business that combined with the reporting
institution in the common control transaction.
• A reporting institution that has adopted ASU 2016-13 should report in columns A, B, and
C of this item the balances as of the end of the previous calendar year of the allowances
for credit losses on loans and leases held for investment, held-to-maturity debt securities,
and available-for-sale debt securities, respectively, of the institution or other business that
combined with the reporting institution in the common control transaction.
FFIEC 051
RI-B-8
(3-19)
RI-B - ALLOWANCE
FFIEC 051
RI-B - ALLOWANCE
Part II. (cont.)
Item No.
Caption and Instructions
6
(cont.)
A reporting institution that adopted ASU 2016-13 as of an effective date during the year-todate reporting period should report in columns A, B, and C of this item, as appropriate,
changes in allowance amounts from initially applying ASU 2016-13 to loans and leases held
for investment, held-to-maturity debt securities, and available-for-sale debt securities as of
the beginning of the fiscal year in which the institution adopts this ASU. The changes in
allowance amounts include the initial allowance gross-up amounts for any purchased creditimpaired assets held as of the effective date of ASU 2016-13 that, in accordance with the
ASU, are deemed purchased credit-deteriorated assets as of that date.
A reporting institution that has adopted ASU 2016-13 should report in columns A, B, and C
of this item, as appropriate, the initial allowance gross-up amounts recognized upon the
acquisition of purchased credit-deteriorated assets on or after the effective date of ASU
2016-13.
If the amount reported in this item is negative, report it with a minus (-) sign.
State the dollar amount of and describe each transaction included in this item in
Schedule RI-E, Explanations, item 6.
7
FFIEC 051
Balance end of current period. Report in columns A, B, and C the sum of items 1, 2, 5,
and 6, less items 3 and 4. The amount reported in column A for this item must equal the
allowance amount reported in Schedule RC, item 4.c.
RI-B-9
(3-19)
RI-B - ALLOWANCE
FFIEC 051
RI-B - ALLOWANCE
Part II. (cont.)
Memoranda
Item No.
1-4
Caption and Instructions
Not applicable.
NOTE: Memorandum items 5 and 6 are to be completed only by institutions that have adopted FASB
Accounting Standards Update No. 2016-13, which governs the accounting for credit losses.
5
Provisions for credit losses on other financial assets measured at amortized cost (not
included in item 5, above). Report in this item the year-to-date amount of provisions for
credit losses (or reversals of provisions) included in Schedule RI, item 4, on financial assets
measured at amortized cost other than loans and leases held for investment, held-to-maturity
debt securities, and available-for-sale debt securities. Provisions for credit losses (or
reversals of provisions) on these other financial assets measured at amortized cost represent
the amounts necessary to adjust the related allowances for credit losses at the quarter-end
report date for management’s current estimate of expected credit losses on these assets.
Exclude provisions for credit losses on off-balance sheet credit exposures, which are
reported in Schedule RI, item 7.d, “Other noninterest expense.”
6
Allowances for credit losses on other financial assets measured at amortized cost (not
included in item 7, above). Report in this item the total amount of allowances for credit
losses on financial assets measured at amortized cost other than loans and leases held for
investment, held-to-maturity debt securities, and available-for-sale debt securities. The
allowances to be included in this item are associated with the provisions for credit losses
reported in Memorandum item 5, above.
Exclude the allowance for credit losses on off-balance sheet credit exposures, which is
reported in Schedule RC-G, item 3.
FFIEC 051
RI-B-10
(3-19)
RI-B - ALLOWANCE
FFIEC 051
RI-C – DISAGGREGATED ALLOWANCE DATA
SCHEDULE RI-C – DISAGGREGATED DATA ON THE ALLOWANCE
FOR LOAN AND LEASE LOSSES
General Instructions
Schedule RI-C is to be completed semiannually in the June and December reports only by institutions
1
with $1 billion or more in total assets.
Institutions that have not adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13),
which governs the accounting for credit losses, should complete Schedule RI-C, items 1 through 6, only
and leave Schedule RI-C, items 7 through 11, blank.
Institutions that have adopted ASU 2016-13 should complete Schedule RI-C, items 1 through 11.
Loans and Leases Held for Investment
For institutions that have not adopted ASU 2016-13, Schedule RI-C, items 1 through 6, have two columns
for the disclosure of disaggregated information by portfolio category on the recorded investment in loans
(and, as applicable, leases) held for investment (column A) and the related balance in the allowance for
loan and lease losses (column B) as of the report date, excluding loans held for investment that the
institution has elected to report at fair value under a fair value option. Loans and leases held for
investment are loans and leases that the institution has the intent and ability to hold for the foreseeable
future or until maturity or payoff.
Institutions that have adopted ASU 2016-13 should report the amortized cost and related allowances for
credit losses by loan category in Schedule RI-C, items 1 through 4, columns A and B, respectively.
The loan and lease portfolio categories for which amounts are to be reported in Schedule RI-C, items 1
through 4, represent general categories rather than the standardized loan categories defined in
Schedule RC-C, Part I, Loans and Leases. Based on the manner in which it segments its portfolio for
purposes of applying its allowance methodology, each institution should report each component of the
overall allowance reported in Schedule RC, item 4.c, and the recorded investment in the related loans
and leases in the general loan category in Schedule RI-C, items 1 through 4, that best corresponds to the
2
characteristics of the related loans and leases.
The total recorded investment amount reported in Schedule RI-C, item 6, column A, plus the fair value
of loans held for investment for which the fair value option has been elected, must equal the balance
sheet amount of held-for-investment loans and leases reported in Schedule RC, item 4.b, “Loans
and leases held for investment.” Thus, the recorded investment amounts reported in column A of
Schedule RI-C must be net of unearned income.
1
In general, the determination as to whether an institution has $1 billion or more in total assets is measured as of
June 30 of the previous calendar year. See pages 6a and 7 of the General Instructions for guidance on shifts in
reporting status.
2
For example, based on its allowance methodology, one institution’s allowance components for credit cards might
relate to both consumer and business credit card receivables, but another institution’s allowance components for
credit cards might relate only to consumer credit card receivables.
As another example, based on its allowance methodology, one institution might include its loans secured by
farmland in its allowance components for commercial real estate loans, but another institution might include its loans
secured by farmland in its allowance components for commercial loans.
FFIEC 051
RI-C-1
(9-19)
RI-C – DISAGGREGATED ALLOWANCE DATA
FFIEC 051
Item No.
RI-C – DISAGGREGATED ALLOWANCE DATA
Caption and Instructions
1
Real estate loans:
1.a
Construction loans. Report in columns A and B the recorded investment in held-forinvestment construction loans and the related balance in the allowance for loan and lease
losses for such loans, respectively. Exclude loans that the institution has elected to report at
fair value under a fair value option.
1.b
Commercial real estate loans. Report in columns A and B the recorded investment in heldfor-investment commercial real estate loans and the related balance in the allowance for loan
and lease losses for such loans, respectively. Exclude loans that the institution has elected
to report at fair value under a fair value option.
1.c
Residential real estate loans. Report in columns A and B the recorded investment in
residential real estate loans and the related balance in the allowance for loan and lease
losses for such loans, respectively. Exclude loans that the institution has elected to report at
fair value under a fair value option.
2
Commercial loans. Report in columns A and B the recorded investment in all held-forinvestment commercial loans and the related balance in the allowance for loan and lease
losses for such loans, respectively. For purposes of this item, commercial loans include all
loans and leases not reported as real estate loans, credit cards, or other consumer loans in
Schedule RI-C, items 1, 3, and 4. Exclude loans that the institution has elected to report at
fair value under a fair value option.
3
Credit cards. Report in columns A and B the recorded investment in all held-for-investment
extensions of credit arising from credit cards and the related balance in the allowance for loan
and lease losses for such extensions of credit, respectively. Exclude loans that the institution
has elected to report at fair value under a fair value option.
4
Other consumer loans. Report in columns A and B the recorded investment in all held-forinvestment consumer loans other than credit cards and the related balance in the allowance
for loan and lease losses for such loans, respectively. Exclude loans that the institution has
elected to report at fair value under a fair value option.
5
Unallocated, if any. Report in column B the amount of any unallocated portion of the
allowance for loan and lease losses. An institution is not required to have an unallocated
portion of the allowance.
6
Total. Report in columns A and B the sum of items 1 through 5. The amount reported in
column A plus the fair value of any loans held for investment for which the fair value option
has been elected must equal Schedule RC, item 4.b, “Loans and leases held for investment.”
The amount reported in column B must equal Schedule RC, item 4.c, “Allowance for loan and
lease losses.”
FFIEC 051
RI-C-2
(9-19)
RI-C – DISAGGREGATED ALLOWANCE DATA
FFIEC 051
RI-C – DISAGGREGATED ALLOWANCE DATA
Held-to-Maturity Securities
For each of the specified categories of held-to-maturity debt securities in Schedule RI-C, items 7 through
10, which correspond to the securities categories defined in Schedule RC-B, report the related balance of
the allowance for credit losses measured in accordance with ASC Subtopic 326-20.
Institutions that have not adopted ASU 2016-13 should leave Schedule RI-C, items 7 through 11, blank.
Item No.
Caption and Instructions
7
Securities issued by states and political subdivisions in the U.S. Report the allowance
for credit losses on held-to-maturity debt securities issued by states and political subdivisions
in the U.S. (as defined for Schedule RC-B, item 3, column A).
8
Mortgage-backed securities (MBS) (including CMOs, REMICs, and stripped MBS).
Report the allowance for credit losses on held-to-maturity mortgage-backed securities (as
defined for Schedule RC-B, items 4.a, 4.b, and 4.c, column A).
9
Asset-backed securities and structured financial products. Report the allowance for
credit losses on held-to-maturity asset-backed securities and structured financial products (as
defined for Schedule RC-B, items 5.a and 5.b, column A).
10
Other debt securities. Report the allowance for credit losses on categories of held-tomaturity debt securities not reported in items 7 through 9, above.
11
Total. Report the sum of items 7 through 10. The amount reported in item 11, “Total,” should
equal the amount reported in Schedule RI-B, Part II, item 7, column B, “Balance end of
current period,” for held-to-maturity debt securities.
FFIEC 051
RI-C-3
(9-19)
RI-C – DISAGGREGATED ALLOWANCE DATA
This page intentionally left blank.
FFIEC 051
RI-E - EXPLANATIONS
SCHEDULE RI-E – EXPLANATIONS
General Instructions
Items 1 and 2 of Schedule RI-E are to be completed annually on a calendar year-to-date basis in the
December report only. Items 3 through 6 of Schedule RI-E are to be completed each quarter on a
calendar year-to-date basis.
On those lines for which your bank must provide a description of the amount being reported, the
description should not exceed 50 characters (including punctuation and spacing between words). If
additional space is needed to complete a description or if your bank, at its option, chooses to briefly
describe other significant items affecting the Consolidated Report of Income, item 7 of this schedule may
be used. Any amounts reported in Schedule RI-E, item 2.g, “FDIC deposit insurance assessments,” for
report dates beginning June 30, 2009, will not be made available to the public on an individual institution
basis.
Item Instructions
Item No.
1
Caption and Instructions
Other noninterest income. Disclose in items 1.a through 1.j each component of
Schedule RI, item 5.l, “Other noninterest income,” and the dollar amount of such component,
that is greater than $100,000 and exceeds 7 percent of the “Other noninterest income.” If net
losses have been reported in Schedule RI, item 5.l, for a component of “Other noninterest
income,” use the absolute value of such net losses to determine whether the amount of the
net losses is greater than $100,000 and exceeds 7 percent of “Other noninterest income” and
should be reported in this item. (The absolute value refers to the magnitude of the dollar
amount without regard to whether the amount represents net gains or net losses.) If net
losses are reported in this item, report them with a minus (-) sign.
Preprinted captions have been provided for the following components of “Other noninterest
income”:
•
•
•
•
•
•
•
Item 1.a, “Income and fees from the printing and sale of checks,”
Item 1.b, “Earnings on/increase in value of cash surrender value of life insurance,”
Item 1.c, “Income and fees from automated teller machines (ATMs),”
Item 1.d, “Rent and other income from other real estate owned,”
Item 1.e, “Safe deposit box rent,”
Item 1.f, “Bank card and credit card interchange fees,” and
Item 1.g,“Income and fees from wire transfers not reportable as service charges on
deposit accounts.”
General descriptions of the components of “Other noninterest income,” including those for
which preprinted captions have been provided in items 1.a through 1.g, are included in the
instructions for Schedule RI, item 5.l. However, institutions need not adjust their internal
noninterest income definitions to match the agencies’ descriptions in the item 5.l instructions.
Rather, institutions may report the components of their “Other noninterest income” in
items 1.a through 1.j using their internal definitions, provided the internal definitions are used
consistently over time.
For other components of “Other noninterest income” that exceed the disclosure threshold, list
and briefly describe these components in items 1.h through 1.j and, if necessary, in
Schedule RI-E, item 7, below.
FFIEC 051
RI-E-1
(6-18)
RI-E - EXPLANATIONS
FFIEC 051
RI-E - EXPLANATIONS
Item No.
Caption and Instructions
1
(cont.)
For components of “Other noninterest income” that reflect a single credit for separate
“bundled services” provided through third party vendors, disclose such amounts in the item
that most closely describes the predominant type of income earned, and this categorization
should be used consistently over time.
2
Other noninterest expense. Disclose in items 2.a through 2.p each component of
Schedule RI, item 7.d, “Other noninterest expense,” and the dollar amount of such
component, that is greater than $100,000 and exceeds 7 percent of the ”Other noninterest
expense.” If net gains have been reported in Schedule RI, item 7.d, for a component of
“Other noninterest expense,” use the absolute value of such net gains to determine whether
the amount of the net gains is greater than $100,000 and exceeds 7 percent of “Other
noninterest expense” and should be reported in this item. (The absolute value refers to the
magnitude of the dollar amount without regard to whether the amount represents net gains or
net losses.) If net gains are reported in this item, report them with a minus (-) sign.
Preprinted captions have been provided for the following components of “Other noninterest
expense”:
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 2.a, “Data processing expenses,”
Item 2.b, “Advertising and marketing expenses,”
Item 2.c, “Directors’ fees,”
Item 2.d, “Printing, stationery, and supplies,”
Item 2.e, “Postage,”
Item 2.f, “Legal fees and expenses,”
Item 2.g, “FDIC deposit insurance assessments,”
Item 2.h, “Accounting and auditing expenses,”
Item 2.i, “Consulting and advisory expenses,”
Item 2.j, “Automated teller machine (ATM) and interchange expenses,”
Item 2.k, “Telecommunications expenses,”
Item 2.l, “Other real estate owned expenses,” and
Item 2.m, “Insurance expenses (not included in employee expenses, premises and fixed
asset expenses, and other real estate owned expenses).”
General descriptions of the components of “Other noninterest expense,” including those for
which preprinted captions have been provided in items 2.a through 2.m, are included in the
instructions for Schedule RI, item 7.d. However, institutions need not adjust their internal
noninterest expense definitions to match the agencies’ descriptions in the item 7.d
instructions. Rather, institutions may report the components of their “Other noninterest
expense” in items 2.a through 2.p using their internal definitions, provided the internal
definitions are used consistently over time.
For other components of “Other noninterest expense” that exceed the disclosure threshold,
list and briefly describe these components in items 2.n through 2.p and, if necessary, in
Schedule RI-E, item 7, below.
For components of “Other noninterest expense” that reflect a single charge for separate
“bundled services” provided by third party vendors, disclose such amounts in the item that
most closely describes the predominant type of expense incurred, and this categorization
should be used consistently over time.
FFIEC 051
RI-E-2
(6-18)
RI-E - EXPLANATIONS
FFIEC 051
Item No.
3
RI-E - EXPLANATIONS
Caption and Instructions
Discontinued operations and applicable income tax effect. List and briefly describe in
items 3.a and 3.b the gross dollar amount of the results of each of the discontinued
operations included in Schedule RI, item 11, "Discontinued operations, net of applicable
income taxes," and its related income tax effect, if any. If Schedule RI, item 11, includes the
results of more than two discontinued operations, report the additional items and their related
tax effects in Schedule RI-E, item 7, below.
If the results of discontinued operations are a loss, report the dollar amount with a minus (-)
sign. If an applicable income tax effect is a tax benefit (rather than a tax expense), report the
dollar amount with a minus (-) sign.
4
Cumulative effect of changes in accounting principles and corrections of material
accounting errors. Disclose in items 4.a through 4.d the dollar amount of the cumulative
effect of each change in accounting principle and correction of a material accounting error,
net of applicable income taxes, that is included in Schedule RI-A, item 2.
If the cumulative effect of an accounting principle change or an accounting error correction
represents a reduction of the bank's equity capital, report the dollar amount with a minus (-)
sign.
Preprinted captions have been provided for the following accounting principle changes:
•
•
Item 4.a, “Effect of adoption of current expected credit losses methodology –
ASU 2016-13,” and
Item 4.b, “Effect of adoption of lease accounting standard – ASC Topic 842.”
In item 4.a, report the cumulative-effect adjustment included in Schedule RI-A, item 2, for the
changes in the allowances for credit losses, net of applicable income taxes, recognized in
retained earnings as of the beginning of the fiscal year in which the institution adopts FASB
Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for
credit losses. Exclude the initial allowance gross-up amounts for any purchased creditimpaired assets held as of the effective date of ASU 2016-13 that, in accordance with the
ASU, are deemed purchased credit-deteriorated assets as of that date (report the initial
allowance gross-up amounts for loans and leases held for investment, held-to-maturity debt
securities, and available-for-sale debt securities in the appropriate column of Schedule RI-B,
Part II, item 6, and in the aggregate in Schedule RI-E, item 6.b). Institutions that have not
adopted ASU 2016-13 should leave item 4.a blank.
In item 4.b, report the adjustment to bank equity capital included in Schedule RI-A, item 2,
resulting from the initial application of ASC Topic 842, Leases, net of applicable income
taxes, as of the beginning of the fiscal year in which the institution adopts this accounting
standard. Institutions that have not adopted ASC Topic 842 should leave item 4.b blank.
For other accounting principle changes and accounting error corrections included in
Schedule RI-A, item 2, list and briefly describe in items 4.c and 4.d the dollar amount of the
cumulative effect of each change in accounting principle and correction of a material
accounting error, net of applicable income taxes. If Schedule RI-A, item 2, includes more
than two accounting principle changes and accounting error corrections (other than the
accounting principle changes reported in items 4.a and 4.b), report the cumulative effect
of each additional accounting principle change and accounting error correction in
Schedule RI-E, item 7, below.
FFIEC 051
RI-E-3
(3-19)
RI-E - EXPLANATIONS
FFIEC 051
Item No.
5
RI-E - EXPLANATIONS
Caption and Instructions
Other transactions with stockholders (including a parent holding company). List and
briefly describe in items 5.a and 5.b the dollar amount of each type of other transaction with
the reporting institution's stockholders, including its parent holding company, if any, that is
included in Schedule RI-A, item 11. If Schedule RI-A, item 11, includes more than two types
of other transactions, report the additional types of other transactions in Schedule RI-E,
item 7, below.
If the effect of a type of other transaction with the reporting institution’s stockholders,
including a parent holding company, if any, is to reduce the institution’s equity capital, report
the dollar amount with a minus (-) sign.
6
Adjustments to allowances for credit losses. Disclose in items 6.a through 4.d the dollar
amount of each type of adjustment to allowances for credit losses on loans and leases,
held-to-maturity debt securities, and available-for-sale debt securities that is included in
Schedule RI-B, Part II, item 6, columns A, B, and C, respectively.
If the effect of an adjustment is to reduce the bank's allowances for credit losses, report the
dollar amount with a minus (-) sign.
Preprinted captions have been provided for the following adjustments to allowances for credit
losses:
•
•
Item 6.a, “Initial allowances for credit losses recognized upon the acquisition of
purchased credit-deteriorated assets on or after the effective date of ASU 2016-13,” and
Item 6.b, “Effect of adoption of current expected credit losses methodology on allowances
for credit losses.”
In item 6.a, institutions that have adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses, should report the initial
allowance gross-up amounts recognized upon the acquisition of purchased creditdeteriorated assets on or after the effective date of ASU 2016-13 that are included as
adjustments in Schedule RI-B, Part II, item 6, columns A, B, and C. Exclude post-acquisition
changes in the allowances for credit losses on purchased credit-deteriorated loans and
leases, held-to-maturity debt securities, and available-for-sale debt securities (report such
changes as provisions for credit losses in Schedule RI-B, Part II, item 5, columns A, B,
and C, respectively.) Institutions that have not adopted ASU 2016-13 should leave item 6.a
blank.
In item 6.b, institutions that have adopted ASU 2016-13 should report the changes in
allowance amounts from initially applying ASU 2016-13 to loans and leases held for
investment, held-to-maturity debt securities, and available-for-sale debt securities as of the
beginning of the fiscal year in which the institution adopts this ASU. These changes in
allowance amounts include the initial allowance gross-up amounts for any purchased creditimpaired assets held as of the effective date of ASU 2016-13 that, in accordance with the
ASU, are deemed purchased credit-deteriorated assets as of that date. Institutions that have
not adopted ASU 2016-13 should leave item 6.b blank.
Institutions that have not adopted ASU 2016-13 should list and briefly describe in items 6.c
and 6.d the dollar amount of each type of adjustment to the allowance for loan and lease
losses included in Schedule RI-B, Part II, item 6, column A.
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Item No.
Caption and Instructions
6
(cont.)
Institutions that have adopted ASU 2016-13 should list and briefly describe in items 6.c and
6.d the dollar amount of each type of adjustment to allowances for credit losses included in
Schedule RI-B, Part II, item 6, columns A, B, and C, that is not reported in items 6.a or 6.b.
If Schedule RI-B, Part II, item 6, includes more than two types of adjustments (other than
the adjustments reported in items 6.a and 6.b), report the additional adjustments in
Schedule RI-E, item 7, below.
7
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Other explanations. In the space provided on the report form, the bank may, at its option,
list and briefly describe any other significant items relating to the Consolidated Report of
Income. The bank's other explanations must not exceed 750 characters, including
punctuation and standard spacing between words and sentences.
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LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF
CONDITION
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions. See the discussion of the Organization of the Instruction Books in the General Instructions.
For purposes of these Consolidated Report of Condition instructions, the Financial Accounting Standards
Board (FASB) Accounting Standards Codification is referred to as the “ASC.”
SCHEDULE RC – BALANCE SHEET
ASSETS
Item No.
1
Caption and Instructions
Cash and balances due from depository institutions.
Treatment of reciprocal balances with depository institutions – Reciprocal balances arise
when two depository institutions maintain deposit accounts with each other, i.e., when a
reporting bank has both a "due from" and a "due to" balance with another depository
institution. Reciprocal balances between the reporting bank and other depository institutions
may be reported on a net basis in accordance with generally accepted accounting principles.
Net "due from" balances should be reported in items 1.a and 1.b below, as appropriate. Net
"due to" balances should be reported as deposit liabilities in Schedule RC, item 13 below.
See the Glossary entry for "Reciprocal Balances."
1.a
Noninterest-bearing balances and currency and coin. Report the total of all
noninterest-bearing balances due from depository institutions, currency and coin, cash items
in process of collection, and unposted debits.
For purposes of these reports, deposit accounts "due from" other depository institutions that
are overdrawn are to be reported as borrowings in Schedule RC, item 16, and in
Schedule RC-M, item 5.b, except overdrawn "due from" accounts arising in connection with
checks or drafts drawn by the reporting bank 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 RC-E until the funds are remitted). For further
information, refer to the Glossary entry for "Overdraft."
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Item No.
Caption and Instructions
1.a
(cont.)
Cash items in process of collection include:
(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 immediately upon presentation in
the United States. This includes:
(a) Checks or drafts drawn on other institutions that have already been forwarded for
collection but for which the reporting bank has not yet been given credit ("cash
letters").
(b) Checks or drafts on hand that will be presented for payment or forwarded for
collection on the following business day.
(c) Checks or drafts that have been deposited with the reporting bank's correspondent
and for which the reporting bank has already been given credit, but for which the
amount credited is not subject to immediate withdrawal ("ledger credit" items).
However, if the reporting bank has been given immediate credit by its correspondent for
checks or drafts presented for payment or forwarded for collection and if the funds on
deposit are subject to immediate withdrawal, the amount of such checks or drafts is
considered part of the reporting bank's balances due from depository institutions.
(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 that are payable immediately upon presentation
and that are customarily cleared or collected as cash items by depository institutions in
the United States, such as:
(a) Redeemed United States savings bonds and food stamps.
(b) 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.
(c) 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 are considered part of the reporting bank's
balances due from depository institutions.
(d) Checks or drafts drawn on another depository institution that have been deposited in
one office of the reporting bank and forwarded for collection to another office of the
reporting bank.
(e) Brokers' security drafts and commodity or bill-of-lading rafts payable immediately
upon presentation in the U.S. (See the Glossary entries for "Broker's Security Draft"
and "Commodity or Bill-of-Lading Draft" for the definitions of these terms.)
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Item No.
Caption and Instructions
1.a
(cont.)
Exclude from cash items in process of collection:
(1) Cash items for which the reporting bank has already received credit, provided that the
funds on deposit are subject to immediate withdrawal. The amount of such cash items is
considered part of the reporting bank's balances due from depository institutions.
(2) Credit or debit card sales slips in process of collection (report as noncash items in
Schedule RC-F, item 6, "All other assets”). However, when the reporting bank has been
notified that it has been given credit, the amount of such sales slips is considered part of
the reporting bank's balances due from depository institutions.
(3) Cash items not conforming to the definition of in process of collection, whether or not
cleared through Federal Reserve Banks (report in Schedule RC-F, item 6, "All other
assets”).
(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 RC-C, Part I; if the drafts were received on a collection
basis, they should be excluded entirely from the bank's balance sheet, Schedule RC,
until the funds have actually been collected.)
Unposted debits are cash items in the bank's possession, drawn on itself, that are
immediately chargeable, but that have not been charged to the general ledger deposit control
account at the close of business on the report date.
Currency and coin include both U.S. and foreign currency and coin owned and held in all
offices of the reporting bank, currency and coin in transit to a Federal Reserve Bank or to any
other depository institution for which the reporting bank has not yet received credit, and
currency and coin in transit from a Federal Reserve Bank or from any other depository
institution for which the reporting bank's account has already been charged. Foreign
currency and coin should be converted into U.S. dollar equivalents as of the report date.
Noninterest-bearing balances due from depository institutions include balances due from
commercial banks in the U.S., other depository institutions in the U.S. (e.g., credit unions,
mutual and stock savings banks, savings or building and loan associations, and cooperative
banks), Federal Home Loan Banks, banks in foreign countries, and foreign central banks.
Noninterest-bearing balances include those noninterest-bearing funds on deposit at other
depository institutions for which the reporting bank has already received credit and which are
subject to immediate withdrawal. Balances for which the bank has not yet received credit
and balances representing checks or drafts for which immediate credit has been given but
which are not subject to immediate withdrawal are considered "cash items in process of
collection."
Include as noninterest-bearing balances due from depository institutions:
(1) Noninterest-bearing balances due from the reporting bank'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 bank (see the Glossary entry for
"Pass-through Reserve Balances" for further discussion).
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Item No.
Caption and Instructions
1.a
(cont.)
(2) Noninterest-bearing balances that reflect deposit credit received by the reporting bank
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 RC-F, item 6, "All other assets.”)
(3) Amounts that the reporting bank has actually passed through to a Federal Reserve Bank
on behalf of its respondent depository institutions (see the Glossary entry for
"Pass-through Reserve Balances" for further discussion).
Exclude from noninterest-bearing balances due from depository institutions:
(1) Balances due from Federal Reserve Banks (report as interest-bearing balances due from
depository institutions in Schedule RC, item 1.b).
(2) Deposit accounts "due to" other depository institutions that are overdrawn (report in
Schedule RC-C, Part I, item 2, "Loans to depository institutions and acceptances of other
banks").
(3) All noninterest-bearing balances that the reporting bank's trust department maintains with
other depository institutions.
1.b
Interest-bearing balances. Report all interest-bearing balances due from depository
institutions whether in the form of demand, savings, or time balances, including certificates of
deposit (CDs), even if the CDs are negotiable or have CUSIP numbers, but excluding
certificates of deposit held for trading. Include balances due from Federal Reserve Banks
(including balances maintained to satisfy reserve balance requirements, excess balances,
and term deposits), commercial banks in the U.S., other depository institutions in the U.S.,
Federal Home Loan Banks, banks in foreign countries, and foreign central banks. Include the
fair value of interest-bearing balances due from depository institutions that are accounted for
at fair value under a fair value option.
Exclude from interest-bearing balances:
(1) Loans to depository institutions and acceptances of other banks (report in
Schedule RC-C, Part I, item 2).
(2) All interest-bearing balances that the reporting bank's trust department maintains with
other depository institutions.
(3) Certificates of deposit held for trading (report in Schedule RC, item 5).
(4) Investments in money market mutual funds, which, for purposes of these reports, are to
be reported as investments in equity securities.
2
Securities:
2.a
Held-to-maturity securities. For institutions that have not adopted FASB Accounting
Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit
losses, report the amount from Schedule RC-B, item 8, column A, "Total amortized cost."
For institutions that have adopted ASU 2016-13, report the amortized cost of held-to-maturity
securities net of any applicable allowances for credit losses, i.e., report the amount from
Schedule RC-B, item 8, column A, “Total amortized cost,” less the amount of allowances
for credit losses on held-to-maturity securities reported in Schedule RI-B, Part II, item 7,
column B, “Balance end of current period.”
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Item No.
2.b
RC - BALANCE SHEET
Caption and Instructions
Available-for-sale debt securities. Report the amount from Schedule RC-B, item 8,
column D, "Total fair value."
NOTE: All institutions must complete Schedule RC, item 2.c (i.e., not leave item 2.c blank), because
all institutions are now required to have adopted FASB Accounting Standards Update No. 2016-01
(ASU 2016-01) for Call Report purposes. ASU 2016-01 includes provisions governing the accounting for
investments in equity securities, including investment in mutual funds, and eliminated the concept of
available-for-sale equity securities. See the Glossary entry for “Securities Activities” for further
information on accounting for investments in equity securities.
2.c
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.
The fair value of equity securities with readily determinable fair values not held for trading
included in this item 2.c that are pledged should be reported in Schedule RC-B,
Memorandum item 1, “Pledged securities.”
Insured state banks that have received FDIC approval in accordance with Section 362.3(a) of
the FDIC’s regulations to hold certain equity investments (“grandfathered equity securities”)
should report in Schedule RC-M, item 4, the aggregate cost basis of all equity securities with
readily determinable fair values not held for trading that are included in this item 2.c.
Exclude equity securities held for trading from Schedule RC, item 2.c. For purposes of the
Call Report balance sheet, trading activities typically include (a) regularly underwriting or
dealing in securities; interest rate, foreign exchange rate, commodity, equity, and credit
derivative contracts; other financial instruments; and other assets for resale, (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 in order to profit from short-term price movements, and
(c) acquiring or taking positions in such items as accommodations to customers, provided
that acquiring or taking such positions meets the definition of “trading” in ASC Topic 320,
Investments–Debt Securities, and ASC Topic 815, Derivatives and Hedging, and the
definition of “trading purposes” in ASC Topic 815. When an institution’s holdings of equity
securities with readily determinable fair values fall within the scope of the preceding
description of trading activities, the equity securities should be reported as trading assets in
Schedule RC, item 5. Otherwise, the equity securities should be reported in this item 2.c.
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
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Item No.
Caption and Instructions
2.c
(cont.)
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) Federal Reserve Bank stock (report as an equity investment without a readily
determinable fair value in Schedule RC-F, item 4).
(2) Federal Home Loan Bank stock (report as an equity investment without a readily
determinable fair value in Schedule RC-F, item 4).
(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 RC-F, item 4).
(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 RC-B, item 6).
(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, report "restricted stock" as an equity investment
without a readily determinable fair value in Schedule RC-F, item 4).
(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 RC-F, item 4).
(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 RC-F, item 4), except minority holdings that
indirectly represent bank premises (report in Schedule RC, item 6) or other real estate
owned (report in Schedule RC, item 7), provided that the fair value of any capital stock
representing the minority interest is not readily determinable. (See the Glossary entry for
"Subsidiaries" for the definition of associated company.)
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Item No.
Caption and Instructions
2.c
(cont.)
(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 RC-F, item 4), except equity holdings that indirectly
represent bank premises (report in Schedule RC, item 6) or other real estate owned
(report in Schedule RC, item 7). (See the Glossary entry for "Subsidiaries" for the
definition of corporate joint venture.)
(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 RC, item 8, "Investments in unconsolidated
subsidiaries and associated companies").
3
Federal funds sold and securities purchased under agreements to resell:
3.a
Federal funds sold. Report the outstanding amount of federal funds sold, i.e., immediately
available funds lent under agreements or contracts that have an original maturity of 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 RC,
item 3.b) and overnight lending for commercial and industrial purposes (which generally
should be reported in Schedule RC, item 4.b). 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 bank 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. Include the fair value of federal funds sold that are accounted for at fair value
under a fair value option.
Also exclude from federal funds sold:
(1) Sales of so-called "term federal funds" (as defined in the Glossary entry for "Federal
Funds Transactions") (report in Schedule RC, item 4.b, "Loans and leases held for
investment").
(2) Securities 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 RC, item 3.b, "Securities purchased under
agreements to resell").
(3) Deposit balances due from a Federal Home Loan Bank (report as balances due from
depository institutions in Schedule RC, item 1.a or 1.b, as appropriate).
(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 securities
resale agreements (report in Schedule RC, item 4.b, "Loans and leases held for
investment").
For further information, see the Glossary entry for "Federal Funds Transactions."
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Item No.
3.b
RC - BALANCE SHEET
Caption and Instructions
Securities purchased under agreements to resell. Report the outstanding amount of:
(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.
Except as noted below, 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. Include the
fair value of securities purchased under agreements to resell that are accounted for at fair
value under a fair value option.
For institutions that have adopted FASB Accounting Standards Update No. 2016-13, which
governs the accounting for credit losses, report securities purchased under agreements to
resell net of any applicable allowances for credit losses.
Exclude from this item:
(1) Resale agreements involving assets other than securities (report in Schedule RC,
item 3.a, "Federal funds sold," or item 4.b, "Loans and leases held for investment,"
as appropriate, depending on the maturity and office location of the transaction).
(2) Due bills representing purchases of securities or other assets by the reporting bank that
have not yet been delivered and similar instruments, whether collateralized or
uncollateralized (report in Schedule RC, item 4.b). 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."
4
Loans and lease financing receivables. Report in the appropriate subitem loans and
leases held for sale and loans and leases that the reporting bank has the intent and ability to
hold for the foreseeable future or until maturity or payoff, i.e., held for investment. The sum of
Schedule RC, items 4.a and 4.b, must equal Schedule RC-C, Part I, item 12.
4.a
Loans and leases held for sale. Report the amount of loans and leases held for sale.
Loans and leases held for sale should be reported at the lower of cost or fair value except for
those loans held for sale that the bank has elected to account for at fair value under a fair
value option, which should be reported in this item at fair value. For loan and leases held for
sale that are reported at the lower of cost or fair value, the amount by which cost exceeds fair
value, if any, shall be accounted for as a valuation allowance within this item. For institutions
that have not adopted FASB Accounting Standards Update No. 2016-13, which governs the
accounting for credit losses, no allowance for loan and lease losses should be included in
Schedule RC, item 4.c, for loans and leases held for sale. All loans and leases reported in
this item must also be reported by loan category in Schedule RC-C, Part I.
For institutions that have adopted ASU 2016-13, no allowances for credit losses should be
included in Schedule RC, item 4.c, for loans and leases held for sale.
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Caption and Instructions
4.b
Loans and leases held for investment. Report the amount of loans and leases that
the reporting bank has the intent and ability to hold for the foreseeable future or until maturity
or payoff, i.e., loans held for investment. Include loans held for investment that the bank has
elected to account for at fair value under a fair value option, which should be reported in this
item at fair value. All loans and leases reported in this item must also be reported by loan
category in Schedule RC-C, Part I.
4.c
Less: Allowance for loan and lease losses. For institutions that have not adopted FASB
Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for
credit losses, report the allowance for loan and lease losses as determined in accordance
with the instructions in the Glossary entry for "Allowance for Loan and Lease Losses." For
institutions that have adopted ASU 2016-13, report the allowance for credit losses on loans
and leases as determined in accordance with the instructions in the Glossary entry for
"Allowance for Credit Losses." Also include in this item any allocated transfer risk reserve
related to loans and leases held for investment that the reporting bank is required to establish
and maintain as specified in Section 905(a) of the International Lending Supervision Act of
1983, in the agency regulations implementing the Act (Subpart D of Federal Reserve
Regulation K, Part 347 of the FDIC’s Rules and Regulations, and Subpart C of Part 28 of the
Comptroller of the Currency’s Regulations), and in any guidelines, letters, or instructions
issued by the agencies. This item must equal Report of Income Schedule RI-B, Part II,
item 7, column A, “Balance end of current period.”
4.d
Loans and leases held for investment, net of allowance. Report the amount derived by
subtracting Schedule RC, item 4.c, from Schedule RC, item 4.b.
5
Trading assets. Trading activities typically include (a) regularly underwriting or dealing in
securities; interest rate, foreign exchange rate, commodity, equity, and credit derivative
contracts; other financial instruments; and other assets for resale; (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 in order to profit from short-term price movements; or (c) acquiring or
taking positions in such items as accommodations to customers, provided that acquiring or
taking such positions meets the definition of “trading” in ASC Topic 320, Investments–Debt
Securities, and ASC Topic 815, Derivatives and Hedging, and the definition of “trading
purposes” in ASC Topic 815. Assets and other financial instruments held for trading shall be
consistently valued at fair value as defined by ASC Topic 820, Fair Value Measurement.
For purposes of the Consolidated Reports of Condition and Income, all debt securities within
the scope of ASC Topic 320, Investments-Debt Securities, that a bank has elected to report
at fair value under a fair value option with changes in fair value reported in current earnings
should be classified as trading securities. In addition, for purposes of these reports, banks
may classify assets (other than debt securities within the scope of ASC Topic 320 for which a
fair value option is elected) as trading if the bank applies fair value accounting, with changes
in fair value reported in current earnings, and manages these assets as trading positions,
subject to the controls and applicable regulatory guidance related to trading activities. For
example, a bank would generally not classify a loan to which it has applied the fair value
option as a trading asset unless the bank holds the loan, which it manages as a trading
position, for one of the following purposes: (1) for market making activities, including such
activities as accumulating loans for sale or securitization; (2) to benefit from actual or
expected price movements; or (3) to lock in arbitrage profits.
Do not include in this item the carrying value of any available-for-sale securities, any loans
that are held for sale (and are not classified as trading in accordance with the preceding
instruction), and any leases that are held for sale. Available-for-sale debt securities are
reported in Schedule RC, item 2.b, and in Schedule RC-B, columns C and D. Loans (not
classified as trading) and leases held for sale should be reported in Schedule RC, item 4.a,
"Loans and leases held for sale," and in Schedule RC-C.
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Item No.
Caption and Instructions
5
(cont.)
Trading assets also include derivatives with a positive fair value resulting from the "marking to
market" of interest rate, foreign exchange rate, commodity, equity, and credit derivative
contracts held for trading purposes as of the report date. Derivative contracts with the same
counterparty that have positive fair values and negative fair values and meet the criteria for a
valid right of setoff contained in ASC Subtopic 210-20, Balance Sheet – Offsetting
(e.g., those contracts subject to a qualifying master netting agreement) may be reported on
a net basis using this item and Schedule RC, item 15, "Trading liabilities," as appropriate.
(See the Glossary entry for "Offsetting.")
6
Premises and fixed assets. Report on a consolidated basis the book value, less
accumulated depreciation or amortization and any impairment losses, of all premises,
equipment, furniture, and fixtures purchased directly or acquired by means of a capital lease
accounted for in accordance with ASC Topic 840, Leases, or in the form of a right-of-use
(ROU) asset accounted for in accordance with ASC Topic 842, Leases, as applicable.
Any method of depreciation or amortization conforming to accounting principles that are
generally acceptable for financial reporting purposes may be used. However, depreciation
for premises and fixed assets may be based on a method used for federal income tax
purposes if the results would not be materially different from depreciation based on the
asset's estimated useful life.
Do not deduct mortgages or other liens on such property (report in Schedule RC, item 16,
"Other borrowed money").
Include as premises and fixed assets:
(1) Premises that are actually owned and occupied (or to be occupied, if under construction)
by the institution, its branches, or its consolidated subsidiaries.
(2) Leasehold improvements, vaults, and fixed machinery and equipment.
(3) Capitalized remodeling costs to existing premises.
(4) Real estate acquired and intended to be used for future expansion.
(5) Parking lots owned by the institution that are used by customers or employees of the
institution, its branches, and its consolidated subsidiaries.
(6) Furniture, fixtures, and movable equipment of the institution, its branches, and its
consolidated subsidiaries.
(7) Automobiles, airplanes, and other vehicles owned by the institution and used in the
conduct of its business.
(8) For a lessee institution that has not adopted ASC Topic 842, the amount of capital lease
property, and for a lessee institution that has adopted ASC Topic 842, the amount of
ROU assets that represents premises, equipment, furniture, and fixtures.
In general, under ASC Topic 842 for an institution as lessee, the ROU asset for a finance
lease should be reported at cost less any accumulated amortization and any
accumulated impairment losses; the ROU asset for an operating lease (not previously
impaired) should be reported at the book value of the related lease liability adjusted for
the remaining balance of any lease incentives received, any prepaid or accrued lease
payments, any unamortized initial direct costs, and any current period impairment. After
an ROU asset for an operating lease is impaired, it should be reported at its carrying
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Item No.
6
(cont.)
RC - BALANCE SHEET
Caption and Instructions
amount immediately after the impairment less any accumulated amortization. See the
discussion of accounting by an institution as lessee in the Glossary entry for "Lease
Accounting."
(9) (a) Stocks and bonds issued by nonmajority-owned corporations and
(b) Investments in limited partnerships or limited liability companies (other than
investments so minor that the institution has virtually no influence over the
partnership or company)
whose principal activity is the ownership of land, buildings, equipment, furniture, or
fixtures occupied or used (or to be occupied or used) by the institution, its branches, or
its consolidated subsidiaries. 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 orderly transactions for the identical or a
similar investment of the same issuer.
Exclude from premises and fixed assets:
(1) Original paintings, antiques, and similar valuable objects (report in Schedule RC-F,
item 6, "All other assets”).
(2) Favorable leasehold rights (report in Schedule RC-M, item 2.c, "All other intangible
assets")
Property formerly but no longer used for banking may be reported either in this item as
"Premises and fixed assets" or in Schedule RC-M, item 3, as "Other real estate owned."
7
Other real estate owned. Report the total amount of other real estate owned from
Schedule RC-M, item 3.f. For further information on other real estate owned, see the
instruction to Schedule RC-M, item 3, and the Glossary entry for "Foreclosed Assets."
8
Investments in unconsolidated subsidiaries and associated companies. Report the
amount of the bank's investments in subsidiaries that have not been consolidated; associated
companies; corporate joint ventures, unincorporated joint ventures, and general partnerships
over which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for
“Equity Method of Accounting”), excluding those that represent direct and indirect
investments in real estate ventures (which are to be reported in Schedule RC, item 9). The
entities in which these investments have been made are collectively referred to as
“investees.” Include loans and advances to investees and holdings of their bonds, notes, and
debentures.
Investments in investees shall be reported using the equity method of accounting. Under the
equity method, the carrying value of the bank's investment in an investee is originally
recorded at cost but is adjusted periodically to record as income the bank's proportionate
share of the investee's earnings or losses and decreased by the amount of any cash
dividends or similar distributions received from the investee. For purposes of these reports,
the date through which the carrying value of the bank's investment in an investee has been
adjusted should, to the extent practicable, match the report date of the Consolidated Report
of Condition, but in no case differ by more than 93 days from the report date.
Unconsolidated subsidiaries include those majority-owned subsidiaries that do not meet the
significance standards for required consolidation that the bank chooses not to consolidate
under the optional consolidation provisions. Refer to the General Instructions section of this
book for a detailed discussion of consolidation. See also the Glossary entry for
"Subsidiaries."
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Item No.
9
RC - BALANCE SHEET
Caption and Instructions
Direct and indirect investments in real estate ventures. Report the amount of the bank’s
direct and indirect investments in real estate ventures. Exclude real estate acquired in any
manner for debts previously contracted, including, but not limited to, real estate acquired
through foreclosure or acquired by deed in lieu of foreclosure, and equity holdings that
indirectly represent such real estate (report in Schedule RC-M, item 3, “Other real estate
owned”).
NOTE: 12 USC 29 limits the authority of national banks to hold real estate. State member
banks are not authorized to invest in real estate except with the prior approval of the Board of
Governors of the Federal Reserve System under Federal Reserve Regulation H (12 CFR
Part 208). In certain states, nonmember banks may invest in real estate.
Include as direct and indirect investments in real estate ventures:
(1) Any real estate originally acquired, directly or indirectly, by the bank or a consolidated
subsidiary and held for development, resale, or other investment purposes.
(2) Real estate acquisition, development, or construction (ADC) arrangements which are
accounted for as direct investments in real estate or real estate joint ventures in
accordance with ASC Subtopic 310-10, Receivables – Overall.
(3) Real estate originally acquired and held for investment by the bank or a consolidated
subsidiary that has been 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. 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 real estate should be reported as a loan in
Schedule RC-C and any gain on the sale should be recognized in accordance with
ASC Subtopic 360-20.
(4) Any other loans secured by real estate and advanced for real estate acquisition,
development, or investment purposes if the reporting bank in substance has virtually the
same risks and potential rewards as an investor in the borrower's real estate venture.
(5) Investments in subsidiaries that have not been consolidated; associated companies;
corporate joint ventures, unincorporated joint ventures, and general partnerships over
which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for
“Equity Method of Accounting”) that are primarily engaged in the holding of real estate for
development, resale, or other investment purposes. The entities in which these
investments have been made are collectively referred to as “investees.” Investments by
the bank in these investees may be in the form of common or preferred stock, partnership
interests, loans or other advances, bonds, notes, or debentures. Such investments shall
be reported using the equity method of accounting. For further information on the equity
method, see the instruction to Schedule RC, item 8, above.
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Item No.
Caption and Instructions
9
(cont.)
(6) Investments in corporate joint ventures, unincorporated joint ventures, and general
partnerships over which the bank does not exercise significant influence and investments
in limited partnerships and limited liability companies that are so minor that the bank has
virtually no influence over the partnership or company, where the entity in which the
investment has been made is primarily engaged in the holding of real estate for
development, resale, or other investment purposes. Report such 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 orderly transactions for the identical
or a similar investment of the same issuer.
10
Intangible assets. Report the total amount of intangible assets from Schedule RC-M,
item 2.d.
11
Other assets. Report the amount from Schedule RC-F, item 7, "Total."
12
Total assets. Report the sum of Schedule RC, items 1 through 11. This item must equal
Schedule RC, item 29, "Total liabilities and equity capital."
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FFIEC 051
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LIABILITIES
Item No.
Caption and Instructions
13
Deposits. (For a discussion of noninterest-bearing and interest-bearing deposits, see the
Glossary entry for "Deposits.")
13.a
In domestic offices. Report the total of all deposits of the reporting bank. This item must
equal the sum of Schedule RC-E, item 7, columns A and C.
This item must also equal the sum of Schedule RC, items 13.a.(1) and 13.a.(2), below.
13.a.(1)
Noninterest-bearing. Report the total of all noninterest-bearing deposits included in
Schedule RC-E, Deposit Liabilities. Noninterest-bearing deposits include noninterest-bearing
demand, time, and savings deposits.
13.a.(2)
Interest-bearing. Report the total of all interest-bearing deposits included in Schedule RC-E,
Deposit Liabilities. Include interest-bearing demand deposits.
13.b
Not applicable.
14
Federal funds purchased and securities sold under agreements to repurchase:
14.a
Federal funds purchased. Report the outstanding amount of federal funds purchased, i.e.,
immediately available funds borrowed under agreements or contracts that have an original
maturity of 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 RC, item 14.b) and Federal Home Loan Bank advances (which should
be reported in Schedule RC, item 16). 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 bank 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, Balance Sheet – Offsetting.
Include the fair value of federal funds purchased that are accounted for at fair value under a
fair value option.
Also exclude from federal funds purchased:
(1) Purchases of so-called "term federal funds" (as defined in the Glossary entry for "Federal
Funds Transactions") (report in Schedule RC, item 16, "Other borrowed money").
(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 security sold or a security that meets the definition of substantially the same in
the case of a dollar roll (report in Schedule RC, item 14.b, "Securities sold under
agreements to repurchase").
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Item No.
Caption and Instructions
14.a
(cont.)
(3) Borrowings from a Federal Home Loan Bank in the form of advances (report in
Schedule RC, item 16) and securities repurchase agreements (report in Schedule RC,
item 14.b).
(4) Borrowings from a Federal Reserve Bank in the form of securities repurchase
agreements (report in Schedule RC, item 14.b) and other borrowings (report in
Schedule RC, item 16).
For further information, see the Glossary entry for "Federal Funds Transactions."
14.b
Securities sold under agreements to repurchase. Report the outstanding amount of:
(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. Include the fair value of securities
sold under agreements to repurchase that are accounted for at fair value under a fair value
option.
Exclude from this item:
(1) Repurchase agreements involving assets other than securities (report in Schedule RC,
item 14.a, "Federal funds purchased," or item 16, "Other borrowed money," as
appropriate, depending on the maturity of the transaction).
(2) Borrowings from a Federal Home Loan Bank other than in the form of securities
repurchase agreements (report federal funds purchased in Schedule RC, item 14.a, and
advances in Schedule RC, item 16).
(3) Borrowings from a Federal Reserve Bank other than in the form of securities repurchase
agreements (report in Schedule RC, item 16).
(4) Obligations under due bills that resulted when the bank sold securities or other assets
and received payment, but has not yet delivered the assets, and similar obligations,
whether collateralized or uncollateralized (report in Schedule RC, item 16). See the
Glossary entry for "Due Bills."
(5) 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."
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Item No.
15
RC - BALANCE SHEET
Caption and Instructions
Trading liabilities. Report the amount of liabilities from the reporting bank's trading
activities. Trading liabilities shall be consistently valued at fair value as defined by ASC
Topic 820, Fair Value Measurement.
Include liabilities resulting from sales of assets that the reporting bank does not own (see the
Glossary entry for "Short Position") and revaluation losses from the "marking to market" of
interest rate, foreign exchange rate, equity, and commodity and other derivative contracts into
which the reporting bank has entered for trading, dealer, customer accommodation, and
similar purposes. In addition, for purposes of these reports, banks may classify liabilities as
trading if the bank applies fair value accounting, with changes in fair value reported in current
earnings, and manages these assets as trading positions, subject to the controls and
applicable regulatory guidance related to trading activities.
16
Other borrowed money. Report the amount from Schedule RC-M, item 5.c.
17 and 18 Not applicable.
19
Subordinated notes and debentures. Report the amount of subordinated notes and
debentures (including mandatory convertible debt). Include the fair value of subordinated
notes and debentures that are accounted for at fair value under a fair value option. (See the
Glossary entry for "Subordinated Notes and Debentures" for the definition of this term.) Also
include the amount of outstanding limited-life preferred stock including any amounts received
in excess of its par or stated value. (See the Glossary entry for "Preferred Stock" for the
definition of limited-life preferred stock.)
20
Other liabilities. Report the amount from Schedule RC-G, item 5, "Total."
21
Total liabilities. Report the sum of Schedule RC, items 13 through 20.
22
Not applicable.
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EQUITY CAPITAL
Item No.
Caption and Instructions
23
Perpetual preferred stock and related surplus. Report the amount of perpetual preferred
stock issued, including any amounts received in excess of its par or stated value. (See the
Glossary entry for "Preferred Stock" for the definition of perpetual preferred stock.)
24
Common stock. Report the aggregate par or stated value of common stock issued.
25
Surplus. Report the net amount formally transferred to the surplus account, including capital
contributions, adjustments arising from treasury stock transactions, and any amount received
for common stock in excess of its par or stated value on or before the report date.
Do not include any portion of the proceeds received from the sale of preferred stock in
excess of its par or stated value (report in Schedule RC, item 19 or 23, as appropriate).
26.a
Retained earnings. Report the amount of retained earnings (undivided profits) and capital
reserves. The amount of the retained earnings and capital reserves should reflect transfers of
net income, declarations of dividends, transfers to surplus, and any other appropriate entries.
Adjustments of accruals and other accounting estimates made shortly after the report date
which relate to the income and expenses of the year-to-date period ended as of the report
date must be reported in the appropriate items of Schedule RI, Income Statement, for that
year-to-date period.
Capital reserves are segregations of retained earnings and are not to be reported as liability
accounts or as reductions of asset balances. Capital reserves may be established for such
purposes as:
(1) Reserve for undeclared stock dividends – includes amounts set aside to provide for stock
dividends (not cash dividends) not yet declared.
(2) Reserve for undeclared cash dividends – includes amounts set aside for cash dividends
on common and preferred stock not yet declared. (Cash dividends declared but not yet
payable should be included in Schedule RC-G, item 5, "Other" liabilities.)
(3) Retirement account (for limited-life preferred stock or subordinated notes and
debentures) – includes amounts allocated under the plan for retirement of limited-life
preferred stock or subordinated notes and debentures contained in the bank's articles of
association or in the agreement under which such stock or notes and debentures were
issued.
(4) Reserve for contingencies – includes amounts set aside for possible unforeseen or
indeterminate liabilities not otherwise reflected on the bank's books and not covered by
insurance. This reserve may include, for example, reserves set up to provide for possible
losses which the bank may sustain because of lawsuits, the deductible amount under the
bank's blanket bond, defaults on obligations for which the bank is contingently liable, or
other claims against the bank. A reserve for contingencies represents a segregation of
retained earnings. It should not include any element of known losses or of any probable
incurred losses the amount of which can be estimated with reasonable accuracy (see the
Glossary entry for "Loss Contingencies" for additional information).
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Item No.
Caption and Instructions
26.a
(cont.)
Exclude from retained earnings:
(1) Any portion of the proceeds received from the sale of common stock in excess of its par
or stated value (report in Schedule RC, item 25).
(2) Any portion of the proceeds received from the sale of preferred stock in excess of its par
or stated value (report in Schedule RC, item 19 or 23, as appropriate).
(3) "Reserves" that reduce the related asset balances such as valuation allowances (e.g., for
institutions that have not adopted ASU 2016-13, which governs the accounting for credit
losses, the allowance for loan and lease losses, and, for institutions that have adopted
ASU 2016-13, allowances for credit losses), reserves for depreciation, and reserves for
bond premiums.
26.b
Accumulated other comprehensive income. Report the accumulated balance of other
comprehensive income as of the report date in accordance with ASC Subtopic 220-10,
Comprehensive Income – Overall, net of applicable income taxes, if any. “Other
comprehensive income” refers to revenues, expenses, gains, and losses that under
U.S. generally accepted accounting principles are included in comprehensive income but
excluded from net income.
Items of accumulated other comprehensive income include:
(1) Net unrealized holding gains (losses) on available-for-sale debt securities (including debt
securities transferred into the available-for-sale category from the held-to-maturity
category), i.e., the difference between the amortized cost and the fair value of the
reporting bank's available-for-sale debt securities (excluding any available-for-sale debt
securities previously written down as other-than-temporarily impaired, and, for institutions
that have adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13)
which governs the accounting for credit losses, excluding the portion of the difference
consisting of an allowance for credit losses, if any). 1 For most institutions, all "debt
securities," as that term is defined in ASC Topic 320, Investments-Debt Securities, that
are designated as "available-for-sale" will be reported as "Available-for-sale debt
securities" in Schedule RC, item 2.b, and in Schedule RC-B, columns C and D.
However, an institution may have certain assets that fall within the definition of "debt
securities" in ASC Topic 320 (e.g., nonrated industrial development obligations) that it
has designated as "available-for-sale" and reports in a balance sheet category other than
"Securities" (e.g., "Loans and lease financing receivables") for purposes of the
Consolidated Report of Condition. These "available-for-sale" assets must be carried on
the Consolidated Report of Condition balance sheet at fair value rather than amortized
cost and the difference between these two amounts, net of tax effects (and subject to the
exclusions mentioned above), also must be included in this item.
1
For example, if the fair value of the reporting institution's available-for-sale debt securities exceeds the amortized
cost of its available-for-sale debt securities by $100,000 (and the institution has had no other transactions affecting
the "net unrealized holding gains (losses)" account), the amount to be included in Schedule RC, item 26.b, must be
reduced by the estimated amount of taxes using the institution's applicable tax rate (federal, state and local). (See
the Glossary entry for "Income Taxes" for a discussion of "Applicable Tax Rate.") If the institution's applicable tax
rate (federal, state and local) is 25 percent and the tax basis of its available-for-sale debt securities approximates
their amortized cost, the institution would include "net unrealized holding gains" of $75,000 [$100,000 - (25% x
$100,000)] in Schedule RC, item 26.b. The institution would also have a deferred tax liability of $25,000 that would
enter into the determination of the amount of net deferred tax assets or liabilities to be reported in Schedule RC-F,
item 2, or Schedule RC-G, item 2.
.
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Item No.
Caption and Instructions
26.b
(cont.)
(2) The unamortized balance of the unrealized holding gain (loss) that existed at the date of
transfer of a debt security transferred into the held-to-maturity category from the
available-for-sale category. Consistent with ASC Topic 320, when a debt security is
transferred from the available-for-sale category into the held-to-maturity category, the
unrealized holding gain (loss) at the date of transfer continues to be reported in the
accumulated other comprehensive income account, but must be amortized over the
remaining life of the security as an adjustment of yield in a manner consistent with the
amortization of any premium or discount.
(3) (a) For institutions that have not adopted ASU 2016-13, the unaccreted portion of otherthan-temporary impairment losses on available-for-sale and held-to-maturity debt
securities that was not recognized in earnings in accordance with ASC Topic 320,
plus the accumulated amount of subsequent decreases (if not other-than-temporary
impairment losses) or increases in the fair value of available-for-sale debt securities
previously written down as other-than-temporarily impaired.
(b) For institutions that have adopted ASU 2016-13, the unaccreted portion of unrealized
losses on available-for-sale and held-to-maturity debt securities that was not
recognized in earnings in accordance with ASC Topic 320, plus the accumulated
amount of subsequent increases or decreases (not attributable to credit impairment)
in the fair value of available-for-sale debt securities, and increases in the fair value of
available-for-sale debt securities after a write-down that resulted from the intent to
sell or a more-likely-than-not requirement to sell.
(4) Accumulated net gains (losses) on derivative instruments that are designated and qualify
as cash flow hedges,2 i.e., the effective portion3 of the accumulated change in fair value
(gain or loss) on derivative instruments designated and qualifying as cash flow hedges in
accordance with ASC Topic 815, Derivatives and Hedging).
Under ASC Topic 815, an institution that elects to apply hedge accounting must exclude
from net income the effective portion of the change in fair value of a derivative designated
and qualifying as a cash flow hedge and record it on the balance sheet in the
accumulated other comprehensive income component of equity capital. The ineffective
portion of the change in fair value of the derivative designated and qualifying as a cash
flow hedge must be reported in earnings. The component of accumulated other
comprehensive income associated with a transaction hedged in a cash flow hedge
should be adjusted each reporting period to a balance that reflects the lesser (in absolute
amounts) of:
(a) The cumulative gain (loss) on the derivative from inception of the hedge, less
(i) amounts excluded consistent with the institution's defined risk management
2
Generally, the objective of a cash flow hedge is to link a derivative to an existing recognized asset or liability or a
forecasted transaction with exposure to variability in expected future cash flows, e.g., the future interest payments
(receipts) on a variable-rate liability (asset) or a forecasted purchase (sale). The changes in cash flows of the
derivative are expected to offset changes in cash flows of the hedged item or transaction. To achieve the matching of
cash flows, ASC Topic 815 requires that the effective portion of changes in the fair value of derivatives designated
and qualifying as cash flow hedges initially be reported in the accumulated other comprehensive income component
of equity capital and subsequently be reclassified into earnings in the same future period or periods that the hedged
transaction affects earnings.
3
The effective portion of a cash flow hedge can be described as the change in fair value of the derivative that
offsets the change in expected future cash flows being hedged. Refer to ASC Topic 815, for further information.
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FFIEC 051
Item No.
26.b
(cont.)
RC - BALANCE SHEET
Caption and Instructions
strategy and (ii) the derivative's gains (losses) previously reclassified from
accumulated other comprehensive income into earnings to offset the hedged
transaction, or
(b) The portion of the cumulative gain (loss) on the derivative necessary to offset the
cumulative change in expected future cash flows on the hedged transaction from
inception of the hedge less the derivative's gains (losses) previously reclassified
from accumulated other comprehensive income into earnings.
Accordingly, the amount reported in this item should reflect the sum of the adjusted
balance (as described above) of the cumulative gain (loss) for each derivative
designated and qualifying as a cash flow hedge. These amounts will be reclassified into
earnings in the same period or periods during which the hedged transaction affects
earnings (for example, when a hedged variable-rate interest receipt on a loan is accrued
or when a forecasted sale occurs).
(5) The accumulated amounts of gains (losses), transition assets or obligations, and prior
service costs or credits associated with single-employer defined benefit pension and
other postretirement plans that have not yet been recognized as components of net
periodic benefit cost in accordance with ASC Topic 715, Compensation-Retirement
Benefits.
(6) The accumulated amount of net gains (losses) resulting from changes in fair value
attributable to instrument-specific credit risk (“own credit risk”) of liabilities for which the
fair value option for financial instruments has been elected.
26.c
Other equity capital components. Report in this item as a negative amount the carrying
value of any treasury stock and any unearned Employee Stock Ownership Plan (ESOP)
shares, which under generally accepted accounting principles are reported in a contra-equity
account on the balance sheet. For further information, see the Glossary entry for “Treasury
Stock” and ASC Subtopic 718-40, Compensation-Stock Compensation – Employee Stock
Ownership Plans.
Report in this item as a negative amount notes receivable that represent a capital contribution
and are reported as a deduction from equity capital in accordance with ASC Subtopic 505-10,
Equity – Overall, and SEC Staff Accounting Bulletin No. 107 (Topic 4.E., Receivables from
Sale of Stock, in the Codification of Staff Accounting Bulletins). Also report in this item as a
negative amount accrued interest receivable on such notes receivable that are reported as a
deduction from equity capital in accordance with ASC Subtopic 505-10. Interest income
accrued on such notes receivable should not be reported as interest income in Schedule RI,
but as additional paid-in-capital in Schedule RC, item 23 or 25, as appropriate. For further
information, see the Glossary entry for “Capital Contributions of Cash and Notes Receivable”
and ASC Subtopic 505-10.
27.a
FFIEC 051
Total bank equity capital. Report the sum of Schedule RC, items 23 through 26.c. This
item must equal Report of Income Schedule RI-A, item 12, “Total bank equity capital end of
current period.”
RC-20
(12-20)
RC – BALANCE SHEET
FFIEC 051
Item No.
RC - BALANCE SHEET
Caption and Instructions
27.b
Noncontrolling (minority) interests in consolidated subsidiaries. Report the portion of
the equity capital accounts of all consolidated subsidiaries of the reporting bank held by
parties other than the parent bank. A noncontrolling interest, sometimes called a minority
interest, is the portion of equity in a bank’s subsidiary not attributable, directly or indirectly, to
the parent bank.
28
Total equity capital. Report the sum of Schedule RC, items 27.a and 27.b.
29
Total liabilities and equity capital. Report the sum of Schedule RC, items 21 and 28. This
item must equal Schedule RC, item 12, “Total assets.”
FFIEC 051
RC-21
(12-20)
RC – BALANCE SHEET
FFIEC 051
RC - BALANCE SHEET
Memoranda
Item No.
1
Caption and Instructions
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 bank by independent
external auditors as of any date during the preceding calendar year. (To be reported
only with the March Consolidated Report of Condition.) Report the number of the statement
listed on the report form that, in the reporting institution’s judgment, best describes the most
comprehensive level of auditing work performed by any independent external auditors during
the preceding calendar year.
The term "any date during the preceding calendar year" refers to the date of the balance
sheet and income statement 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 (integrated audit,1
financial statement audit, directors' examination, review, compilation, or specific procedures)
and regardless of the date of the report submitted by the auditor.
Exclude from "auditing work performed" any tax or consulting work regardless of whether it
was performed by an independent certified public accounting firm or others.
The list of possible external auditing work is structured with the "most comprehensive level,"
an integrated audit of the institution’s financial statements and its internal control over
financial reporting, identified as number 1a, and the other levels of auditing work listed in
descending order (excluding number 3) so that "no external audit work" is number 9.
Institutions may be assisted in determining the level of auditing work performed by reviewing
the type of report issued by the auditor.
If an institution or its parent holding company has external auditing work performed by a
certified public accounting firm, the work may be (i) an integrated audit of the institution’s or
the holding company’s financial statements and its internal control over financial reporting or
(ii) an audit of the financial statements only. When an integrated audit is performed, the
auditor may choose to issue a combined report (i.e., one report containing both an opinion on
the financial statements and an opinion on internal control over financial reporting) or
separate reports on the financial statements and on internal control over financial reporting.
(a) If the institution or parent holding company has external auditing work performed by a
certified public accounting firm and the report issued by the auditor:
Begins
"We have audited . . ."
and also states in the first paragraph
or in a separate paragraph
“We also have audited . . . internal
over financial reporting . . .” or
“We also have examined . . . internal
control over financial reporting . . .”
control
1
An integrated audit occurs when an independent external auditor is engaged to perform an audit of the
effectiveness of internal control over financial reporting that is integrated with an audit of the financial statements and
renders opinions on the financial statements and on internal control over financial reporting.
FFIEC 051
RC-22
(12-20)
RC – BALANCE SHEET
FFIEC 051
RC - BALANCE SHEET
Memoranda
Item No.
1
(cont.)
Caption and Instructions
and includes a paragraph that begins
"In our opinion, the [consolidated] financial
statements referred to above . . ." and also
refers to internal control over financial reporting
the institution would respond to this item with a "1a" if the first sentence of the first
paragraph of the report describes the financial statements of the institution or with a "2a"
if the first sentence of the first paragraph of the report describes the financial statements
of the institution’s parent holding company.
(b) If the institution or parent holding company has external auditing work performed by a
certified public accounting firm and the report issued by the auditor:
Begins
"We have audited . . ." but the first paragraph or
a separate paragraph makes no reference to
internal control over financial reporting
and the report includes a paragraph
that begins
"In our opinion, the [consolidated] financial
statements referred to above . . ." but makes no
reference to internal control over financial
reporting or
“In our opinion, the balance sheet referred to
above . . ."
the institution would respond to this item with a "1b" if the first sentence of the first
paragraph of the report describes the financial statements or the balance sheet of the
institution or with a "2b" if the first sentence of the first paragraph of the report describes
the financial statements or the balance sheet of the institution’s parent holding company.
(c) If the report submitted by the auditor:
Begins
"We have applied certain procedures to selected
records and transactions . . .,"
The second paragraph includes
"We do not express an opinion, . . ."
and
The next to last paragraph states
"Had we performed additional procedures . . .
other matters may have come to our
attention . . ."
the institution would respond with:
(i) a "4" if this auditing work was performed by a certified public accounting firm for the
Board of Directors as a directors' examination;
(ii) a "5" if this auditing work was performed by any other firm (e.g., a consulting firm,
another banking organization) for the Board of Directors as a directors' examination;
or
FFIEC 051
RC-23
(12-20)
RC – BALANCE SHEET
FFIEC 051
RC - BALANCE SHEET
Memoranda
Item No.
1
(cont.)
Caption and Instructions
(iii) an "8" if management otherwise engaged the auditor to perform specified auditing
work (excluding tax or consulting work), but this auditing work did not constitute
a directors' examination.
(d) If the report submitted by the auditor:
Begins
"We have reviewed . . . ,"
The second paragraph states
"A review consists principally of inquiries . . . ,"
and
The final paragraph begins
"Based on our review . . ."
the institution would respond to this item with a "6."
(e) If the report submitted by the auditor:
Begins
"We have compiled . . ."
and
The second paragraph begins
"A compilation is limited to presenting . . . "
the institution would respond to this item with a "7."
An "independent external auditor" is an auditor who at no time during the year:
(1) was an employee of the institution;
(2) performed the institution's bookkeeping or maintained the institution's accounting records;
(3) was dependent on the institution for his livelihood nor was the institution such a
significant client that the loss of that client would jeopardize his livelihood; nor
(4) held the institution's securities or was indebted to the institution beyond those types of
loans permitted under applicable professional standards.
2
FFIEC 051
Bank’s fiscal year-end date. (To be reported only with the March Consolidated Report of
Condition.) Report the bank’s fiscal year-end date (month and day) for financial reporting
purposes. For example, a bank whose fiscal year ends on June 30 would report 0630 in this
Memorandum item.
RC-24
(12-20)
RC – BALANCE SHEET
FFIEC 051
RC-B - SECURITIES
SCHEDULE RC-B – SECURITIES
General Instructions
Items 1 through 6.b and 8 of this schedule have four columns for information on securities: two columns
for held-to-maturity securities and two columns for available-for-sale debt securities.1 Report the
amortized cost and fair value of held-to-maturity securities in columns A and B, respectively. Report the
amortized cost and fair value of available-for-sale debt securities in columns C and D, respectively.
Investments in equity securities, including investment in mutual funds, with readily determinable fair
values not held for trading are no longer reported in Schedule RC-B. Institutions should report the fair
value of their holdings of equity securities with readily determinable fair values not held for trading in
Schedule RC, item 2.c. Insured state banks that have received FDIC approval in accordance with
Section 362.3(a) of the FDIC’s regulations to hold certain equity investments (“grandfathered equity
securities”) should report in Schedule RC-M, item 4, the cost basis of all equity securities with readily
determinable fair values not held for trading that are reported in Schedule RC, item 2.c, not just the cost
basis of those equity securities that are treated as “grandfathered.”
For institutions that have adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13),
which governs the accounting for credit losses, report the amortized cost of held-to-maturity securities
and available-for-sale debt securities in columns A and C, respectively, without any deduction for
allowances for credit losses on such securities.
Exclude from this schedule all securities held for trading and debt securities the bank has elected to
report at fair value under a fair value option even if bank management did not acquire the securities
principally for the purpose of selling them in the near term. Securities held for trading and debt securities
reported under a fair value option are to be reported in Schedule RC, item 5, "Trading assets.”
Institutions must report whether they utilize the fair value option to measure any of their assets or
liabilities in Schedule SU, item 3, and, if appropriate, information about their fair value option assets and
liabilities in the corresponding subitems.
In general, 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. (See the
Glossary entry for "Premiums and Discounts.") As defined in ASC Topic 820, Fair Value Measurement,
fair value is “the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.” For further information, see the
Glossary entry for “Fair Value.”
The preferred method for reporting purchases and sales of securities is as of trade date. However,
settlement date accounting is acceptable if the reported amounts would not be materially different.
(See the Glossary entry for "Trade Date and Settlement Date Accounting.")
For purposes of this schedule, 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 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. For further
information, see the Glossary entries for "Transfers of Financial Assets" and "Repurchase/Resale
Agreements."
1
Available-for-sale debt securities are generally reported in Schedule RC-B, columns C and D. However, a bank
may have certain assets that fall within the definition of "debt securities" in ASC Topic 320, Investments-Debt
Securities, (e.g., certain industrial development obligations) that the bank has designated as "available-for-sale"
which are reported for purposes of the Consolidated Report of Condition in a balance sheet category other than
"Securities" (e.g., "Loans and lease financing receivables").
FFIEC 051
RC-B-1
(12-20)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
General Instructions (cont.)
(2) Purchases and sales of participations in pools of securities – 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. For further information, see the Glossary
entries for "Transfers of Financial Assets" and "Repurchase/Resale Agreements."
(3) Pledged securities – Pledged held-to-maturity and available-for-sale debt securities that have not
been transferred to the secured party should continue to be included in the pledging bank's holdings
of securities that are reported in Schedule RC-B. If the bank has transferred pledged securities to the
secured party, the bank should account for the pledged securities in accordance with ASC Topic 860.
(4) Securities borrowed and lent – Securities borrowed and lent shall be reported on the balance sheet of
either the borrowing or lending bank in accordance with ASC Topic 860. For further information, see
the Glossary entries for "Transfers of Financial Assets" and "Securities Borrowing/Lending
Transactions."
(5) Short sales of securities – Such transactions are to be reported as described in the Glossary entry for
"Short Position."
(6) Futures, forward, and option contracts – Such open contracts to buy or sell securities in the future are
to be reported as derivatives. Institutions must report whether they have any derivative contracts in
Schedule SU, item 1, and, if appropriate, information about their derivative contracts in the
corresponding subitems.
Item Instructions
Item No.
1
Caption and Instructions
U.S. Treasury securities. Report in the appropriate columns the amortized cost and fair
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. Also exclude detached Treasury
security coupons and ex-coupon Treasury securities held as the result of either their
purchase or the bank's stripping of such securities and Treasury receipts such as CATS,
TIGRs, COUGARs, LIONs, and ETRs (report in Schedule RC-B, item 6.a below). Refer to
the Glossary entry for "Coupon Stripping, Treasury Receipts, and STRIPS" for additional
information.
. 2
U.S. Government agency and sponsored agency obligations. Report in the appropriate
columns the amortized cost and fair value of all obligations of U.S. Government agencies and
U.S. Government-sponsored agencies (excluding mortgage-backed securities) not held for
trading.
Distinction between U.S. Government Agencies and U.S. Government-sponsored Agencies ‒
For purposes of these reports, 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. In
contrast, a U.S. Government-sponsored agency is defined as an agency 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.
FFIEC 051
RC-B-2
(12-20)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
2
(cont.)
Include, among others, debt securities (but not mortgage-backed securities) of the following
U.S. Government agencies:
(1)
(2)
(3)
(4)
(5)
Export-Import Bank (Ex-Im Bank)
Federal Housing Administration (FHA)
Government National Mortgage Association (GNMA)
Maritime Administration
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 portions of loans for which
the SBA has further guaranteed the timely payment of scheduled principal and interest
payments. (Exclude SBA “Guaranteed Interest Certificates,” which represent a beneficial
interest in the entire SBA-guaranteed portion of an individual loan. SBA “Guaranteed
Interest Certificates” should be reported as loans in Schedule RC-C, Part I, or, if held for
trading, in Schedule RC, item 5.)
(2) Participation certificates issued by the Export-Import Bank and the General Services
Administration.
Include, among others, debt securities and mortgage-backed bonds (i.e., bonds that are
collateralized by mortgages) of the following U.S. 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)
(6) Federal National Mortgage Association (FNMA or Fannie Mae)
(7) Resolution Funding Corporation (REFCORP)
(8) Student Loan Marketing Association (SLMA or Sallie Mae)
(9) Tennessee Valley Authority (TVA)
(10) U.S. Postal Service
Exclude from U.S. Government agency obligations:
(1) Loans to the Export-Import Bank and to federally-sponsored lending agencies (report in
"Other loans," Schedule RC-C, Part I, item 9). Refer to the Glossary entry for "federallysponsored lending agency" for the definition of this term.
(2) All holdings of U.S. Government-issued or -guaranteed mortgage pass-through securities
(report in Schedule RC-B, item 4.a.(1) or 4.c.(1)(a), below, as appropriate).
(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 Schedule RC-B, item 4.b.(1)
or 4.c.(2)(a), below, as appropriate).
FFIEC 051
RC-B-3
(9-19)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
2
(cont.)
(4) Participations in pools of Federal Housing Administration (FHA) Title I loans, which
generally consist of junior lien home improvement loans (report as loans in
Schedule RC-C, generally in item 1.c.(2)(b), Loans "secured by junior liens" on
1-to-4 family residential properties).
(5) Debt securities issued by SLM Corporation, the private-sector corporation that is the
successor to the Student Loan Marketing Association (report in Schedule RC-B, item 6.a,
“Other domestic debt securities,” below), and securitized student loans issued by
SLM Corporation (or its affiliates) (report in Schedule RC-B, item 5.a, “Asset-backed
securities,” below).
3
Securities issued by states and political subdivisions in the U.S. Report in the
appropriate columns the amortized cost and fair value of all securities issued by states and
political subdivisions in the United States not held for trading.
States and political subdivisions in the U.S., for purposes of this report, include:
(1) 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
(2) the governments of Puerto Rico and of the U.S. territories and possessions and their
political subdivisions.
Securities issued by states and political subdivisions in the U.S. include:
(1) General obligations, which are securities whose principal and interest will be paid from
the general tax receipts of the state or political subdivision.
(2) Revenue obligations, which are securities whose debt service is paid solely from the
revenues of the projects financed by the securities rather than from general tax funds.
(3) Industrial development and similar obligations, which are discussed below.
Treatment of industrial development bonds (IDBs) and similar obligations. Industrial
development bonds (IDBs), sometimes referred to as "industrial revenue bonds," and similar
obligations are issued under the auspices of states or political subdivisions for the benefit of a
private party or enterprise where that party or enterprise, rather than the government entity,
is obligated to pay the principal and interest on the obligation. For purposes of these reports,
all IDBs and similar obligations should be reported as securities in this item (Schedule RC-B,
item 3) or as loans in Schedule RC-C, Part I, item 8, consistent with the asset category in
which the bank reports IDBs and similar obligations on its balance sheet for other financial
reporting purposes. Regardless of whether they are reported as securities in Schedule RC-B
or as loans in Schedule RC-C, Part I, all IDBs and similar obligations that meet the definition
of a "security" in ASC Topic 320, Investments-Debt Securities (formerly FASB Statement
No. 115, “Accounting for Certain Investments in Debt and Equity Securities”) must be
measured in accordance with ASC Topic 320.
FFIEC 051
RC-B-4
(9-19)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
3
(cont.)
Treatment of other obligations of states and political subdivisions in the U.S. In addition to
those IDBs and similar obligations that are reported as securities in accordance with the
preceding paragraph, also include in this item as securities issued by states and political
subdivisions in the U.S. all obligations other than IDBs that meet any of the following criteria:
(1) Nonrated obligations of states and political subdivisions in the U.S., other than those
specifically excluded below, that the bank considers securities for other financial reporting
purposes.
(2) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) that are
rated by a nationally-recognized rating service.
(3) Obligations of state and local governments that are guaranteed by the United States
Government (excluding mortgage-backed securities).
Exclude from item 3:
(1) All overdrafts of states and political subdivisions in the U.S. (report as loans in
Schedule RC-C, Part I, item 8).
(2) All lease financing receivables of states and political subdivisions in the U.S. (report as
leases in Schedule RC-C, Part I, item 10).
(3) All IDBs that are reported as loans in accordance with the reporting treatment described
above (report as loans in Schedule RC-C, Part I, item 8).
(4) All other nonrated obligations of states and political subdivisions in the U.S. that the bank
considers loans for other financial reporting purposes (report as loans in Schedule RC-C,
Part I, item 8).
(5) All mortgage-backed securities issued by state and local housing authorities in the U.S.
(report in Schedule RC-B, item 4, below).
(6) 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 state and local housing authorities in the U.S. (report in Schedule RC-B, item 4.b,
below).
(7) All obligations of states and political subdivisions in the U.S. held by the reporting bank for
trading (report in Schedule RC, item 5).
FFIEC 051
RC-B-5
(6-18)
RC-B - SECURITIES
FFIEC 051
Item No.
4
RC-B - SECURITIES
Caption and Instructions
Mortgage-backed securities. Report in the appropriate columns of the appropriate
subitems the amortized cost and fair value of all residential and commercial mortgage-backed
securities, including mortgage pass-through securities, collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits (REMICs), CMO and REMIC residuals,
stripped mortgage-backed securities (such as interest-only strips (IOs), principal-only strips
(POs), and similar instruments), and mortgage-backed commercial paper not held for trading.
Include mortgage-backed securities issued by non-U.S. issuers.
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 in Schedule RC-B, item 5.a).
(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 RC-B, item 2, "U.S. Government agency
and sponsored agency obligations"), and mortgage-backed bonds issued by non-U.S.
Government issuers (report in Schedule RC-B, item 6, "Other debt securities," below).
(3) Participation certificates issued by the Export-Import Bank and the General Services
Administration (report in Schedule RC-B, item 2, "U.S. Government agency and
sponsored agency obligations").
(4) Participation certificates issued by a Federal Intermediate Credit Bank (report in
Schedule RC-F, item 4, "Equity investments without readily determinable fair values").
4.a
Residential mortgage pass-through securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all holdings of residential mortgage
pass-through securities. In general, a residential mortgage pass-through security represents
an undivided interest in a pool of loans secured by 1-4 family residential properties 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 1-4 family residential mortgages even though
the reporting bank 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
bank 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 1-4 family residential
mortgages, e.g., FHLMC Giant PCs.
Exclude all holdings of commercial mortgage pass-through securities, including pass-through
securities backed by loans secured by multifamily (5 or more) residential properties (report in
Schedule RC-B, item 4.c.(1), below). Also exclude all collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits (REMICs), CMO and REMIC residuals,
stripped mortgage-backed securities (such as interest-only strips (IOs), principal-only strips
(POs), and similar instruments), and mortgage-backed commercial paper (report in
Schedule RC-B, item 4.b or 4.c.(2), below, as appropriate).
FFIEC 051
RC-B-6
(6-18)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
4.a.(1)
Issued or guaranteed by FNMA, FHLMC, or GNMA. Report in the appropriate columns the
amortized cost and fair value of all holdings of 1-4 family residential mortgage pass-through
securities issued or guaranteed by the Federal National Mortgage Association (FNMA), the
Federal Home Loan Mortgage Corporation (FHLMC), or the Government National Mortgage
Association (GNMA) that are not held for trading.
4.a.(2)
Other pass-through securities. Report in the appropriate columns the amortized cost and
fair value of all holdings of 1-4 family residential mortgage pass-through securities issued by
others (e.g., other depository institutions, insurance companies, state and local housing
authorities in the U.S.) that are not guaranteed by the U.S. Government and are not held for
trading.
If the bank has issued pass-through securities backed by a pool of its own 1-4 family
residential mortgages and the certificates are not guaranteed by the U.S. Government, any
holdings of these pass-through securities (not held for trading) are to be reported in this item.
4.b
Other residential mortgage-backed securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all 1-4 family residential
mortgage-backed securities other than pass-through securities that are not held for trading.
Other residential mortgage-backed securities include:
(1) All classes of collateralized mortgage obligations (CMOs) and real estate mortgage
investments conduits (REMICs) backed by loans secured by 1-4 family residential
properties.
(2) CMO and REMIC residuals and similar interests backed by loans secured by 1-4 family
residential properties.
(3) Stripped 1-4 family residential mortgage-backed securities (such as interest-only strips
(IOs), principal-only strips (POs), and similar instruments).
(4) Commercial paper backed by loans secured by 1-4 family residential properties.
4.b.(1)
Issued or guaranteed by U.S. Government agencies or sponsored agencies. Report in
the appropriate columns the amortized cost and fair value of all classes of CMOs and
REMICs, CMO and REMIC residuals, and stripped mortgage-backed securities issued or
guaranteed by U.S. Government agencies or U.S. Government-sponsored agencies that are
backed by loans secured by 1-4 family residential properties. For purposes of these reports,
include REMICs issued by the U.S. Department of Veterans Affairs (VA) that are backed by
1-4 family residential mortgages in this item.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored agencies
include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).
FFIEC 051
RC-B-7
(6-18)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
4.b.(2)
Collateralized by MBS issued or guaranteed by U.S. Government agencies or
sponsored agencies. Report in the appropriate columns the amortized cost and fair value
of all classes of CMOs, REMICs, CMO and REMIC residuals, and stripped mortgage-backed
securities issued by non-U.S. Government issuers (e.g., other depository institutions,
insurance companies, state and local housing authorities in the U.S.) for which the collateral
consists of GNMA (Ginnie Mae) residential pass-through securities, FNMA (Fannie Mae)
residential pass-through securities, FHLMC (Freddie Mac) residential participation
certificates, or other residential mortgage-backed securities (i.e., classes of CMOs or
REMICs, CMO or REMIC residuals, and stripped mortgage-backed securities) issued or
guaranteed by U.S. Government agencies or U.S. Government-sponsored agencies.
4.b.(3)
All other residential MBS. Report in the appropriate columns the amortized cost and fair
value of all CMOs, REMICs, CMO and REMIC residuals, stripped mortgage-backed
securities, and commercial paper backed by loans secured by 1-4 family residential
properties (or by securities collateralized by such loans) that have been issued by non-U.S.
Government issuers (e.g., other depository institutions, insurance companies, state and local
housing authorities in the U.S.) for which the collateral does not consist of GNMA (Ginnie
Mae) residential pass-through securities, FNMA (Fannie Mae) residential pass-through
securities, FHLMC (Freddie Mac) residential participation certificates, or other residential
mortgage-backed securities (i.e., classes of CMOs or REMICs, CMO or REMIC residuals,
and stripped mortgage-backed securities) issued or guaranteed by U.S. Government
agencies or U.S. Government-sponsored agencies.
4.c
Commercial MBS. Report in the appropriate columns of the appropriate subitems the
amortized cost and fair value of all holdings of commercial mortgage-backed securities
issued by U.S. Government-sponsored agencies or by others that are not held for trading.
In general, a commercial mortgage-backed security represents an interest in a pool of loans
secured by properties other than 1-4 family residential properties.
4.c.(1)
Commercial mortgage pass-through securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all holdings of commercial
mortgage pass-through securities. In general, a commercial mortgage pass-through security
represents an undivided interest in a pool of loans secured by properties other than 1-4 family
residential properties that provides the holder with a pro rata share of all principal and interest
payments on the mortgages in the pool.
4.c.(1)(a)
Issued or guaranteed by FNMA, FHLMC, or GNMA. Report in the appropriate columns the
amortized cost and fair value of all holdings of commercial mortgage pass-through 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 commercial mortgage pass-through securities guaranteed
by the Small Business Administration.
FFIEC 051
RC-B-8
(6-18)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
4.c.(1)(b)
Other pass-through securities. Report in the appropriate columns the amortized cost and
fair value of all holdings of commercial mortgage pass-through securities issued or
guaranteed by non-U.S. Government issuers.
4.c.(2)
Other commercial mortgage-backed securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all CMOs, REMICs, CMO and
REMIC residuals, stripped mortgage-backed securities, and commercial paper backed by
loans secured by properties other than 1-4 family residential properties. Exclude commercial
mortgage pass-through securities (report in Schedule RC-B, item 4.c.(1), above).
4.c.(2)(a)
Issued or guaranteed by U.S. Government agencies or sponsored agencies. Report in
the appropriate columns the amortized cost and fair value of all CMOs, REMICs, CMO and
REMIC residuals, stripped mortgage-backed securities, and commercial paper backed by
loans secured by properties other than 1-4 family residential properties that have been issued
by U.S. Government agencies or U.S. Government-sponsored agencies.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored agencies
include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).
4.c.(2)(b)
All other commercial MBS. Report in the appropriate columns the amortized cost and fair
value of all CMOs, REMICs, CMO and REMIC residuals, stripped mortgage-backed
securities, and commercial paper backed by loans secured by properties other than 1-4
family residential properties that have been issued or guaranteed by non-U.S. Government
issuers.
5
Asset-backed securities and structured financial products:
5.a
Asset-backed securities. Report in the appropriate columns the amortized cost and
fair value of all asset-backed securities (other than mortgage-backed securities), including
asset-backed commercial paper, not held for trading. Include asset-backed securities issued
by non-U.S. issuers.
5.b
Structured financial products. Report in the appropriate columns the amortized cost and
fair value of all structured financial products not held for trading. Include cash, synthetic, and
hybrid instruments, including those issued by non-U.S. issuers. Structured financial products
generally convert a pool of assets (such as whole loans, securitized assets, bonds, and
similar instruments) and other exposures (such as derivatives) into products that are tradable
capital market debt instruments. Some of the more complex financial product structures mix
asset classes in order to create investment products that diversify risk.
(1) A cash instrument means that the instrument represents a claim against a reference pool
of assets.
(2) A synthetic instrument means that the investors do not have a claim against a reference
pool of assets; rather, the originating bank merely transfers the inherent credit risk of the
reference pool of assets by such means as a credit default swap, a total return swap, or
another arrangement in which the counterparty agrees upon specific contractual
covenants to cover a predetermined amount of losses in the loan pool.
(3) A hybrid instrument means that the instrument is a mix of both cash and synthetic
instruments.
FFIEC 051
RC-B-9
(3-19)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Item No.
Caption and Instructions
5.b
(cont.)
One of the more common cash instrument structured financial products is referred to as a
collateralized debt obligation (CDO). For example, include in this item investments in CDOs
for which the underlying collateral is a pool of trust preferred securities issued by U.S.
business trusts organized by financial institutions or real estate investment trusts. However,
exclude from this item investments in trust preferred securities issued by a single
U.S. business trust (report in Schedule RC-B, item 6.a, “Other domestic debt securities”).
Examples of other products to be reported in this item include synthetic structured financial
products (such as synthetic CDOs) that use credit derivatives and a reference pool of assets,
hybrid structured products that mix cash and synthetic instruments, collateralized loan
obligations (CLOs), collateralized bond obligations (CBOs), resecuritizations such as CDOs
squared or cubed (which are CDOs backed primarily by the tranches of other CDOs), and
other similar structured financial products.
Exclude from structured financial products:
(1) Mortgage-backed pass-through securities (report in Schedule RC-B, item 4, above).
(2) Collateralized mortgage obligations (CMOs), real estate mortgage investment conduits
(REMICs), CMO and REMIC residuals, stripped mortgage-backed securities, and
mortgage-backed commercial paper (report in Schedule RC-B, item 4, above).
(3) Asset-backed commercial paper not held for trading (report in Schedule RC-B, item 5.a,
above).
(4) Asset-backed securities that are primarily secured by one type of asset (report in
Schedule RC-B, item 5.a, above).
(5) Securities backed by loans that are commonly regarded as asset-backed securities
rather than collateralized loan obligations in the marketplace (report in Schedule RC-B,
item 5.a, above).
6
Other debt securities. Report in the appropriate columns of the appropriate subitems the
amortized cost and fair value of all debt securities not held for trading that cannot properly be
reported in Schedule RC-B, items 1 through 5, above.
Exclude from other debt securities:
(1) All holdings of certificates of participation in pools of residential mortgages, 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) (report in
Schedule RC-B, item 4, above).
(2) Holdings of bankers acceptances and certificates of deposit (CDs), even if the CDs are
negotiable or have CUSIP numbers. (Report holdings of bankers acceptances as loans
in Schedule RC, item 4.a, if held for sale; item 4.b, if held for investment; and item 5, if
held for trading. Report holdings of CDs in Schedule RC, item 1.b, if not held for trading;
and item 5, if held for trading.)
(3) All securities that meet the definition of an “equity security” in ASC Topic 321,
Investments-Equity Securities (formerly FASB Statement No. 115, “Accounting for
Certain Investments in Debt and Equity Securities”), for example, common and
perpetual preferred stock. (See also the instructions to Schedule RC-B, item 7, and
Schedule RC-F, item 4.)
FFIEC 051
RC-B-10
(3-19)
RC-B - SECURITIES
FFIEC 051
Item No.
6.a
RC-B - SECURITIES
Caption and Instructions
Other domestic debt securities. Report in the appropriate columns the amortized cost and
fair value of all other domestic debt securities not held for trading.
Other domestic debt securities include:
(1) Bonds, notes, debentures, equipment trust certificates, and commercial paper (except
asset-backed commercial paper) issued by U.S.-chartered corporations and other
U.S. issuers and not reportable elsewhere in Schedule RC-B.
(2) Preferred stock of U.S.-chartered corporations and business trusts that by its terms either
must be redeemed by the issuing corporation or trust or is redeemable at the option of
the investor (i.e., redeemable or limited-life preferred stock), including trust preferred
securities issued by a single U.S. business trust that are subject to mandatory
redemption.
(3) Detached U.S. Government security coupons and ex-coupon U.S. Government securities
held as the result of either their purchase or the bank's stripping of such securities
and Treasury receipts such as CATS, TIGRs, COUGARs, LIONs, and ETRs. Refer to the
Glossary entry for "coupon stripping, Treasury receipts, and STRIPS" for additional
information.
Exclude from other domestic debt securities investments in collateralized debt obligations for
which the underlying collateral is a pool of trust preferred securities issued by U.S. business
trusts (report as structured financial products in Schedule RC-B, item 5.b).
6.b
Other foreign debt securities. Report in the appropriate columns the amortized cost and
fair value of all other foreign debt securities not held for trading.
Other foreign debt securities include:
(1) Bonds, notes, debentures, equipment trust certificates, and commercial paper (except
asset-backed commercial paper) issued by non-U.S.-chartered corporations.
(2) Debt securities issued by foreign governmental units.
(3) Debt securities issued by international organizations such as the International Bank for
Reconstruction and Development (World Bank), Inter-American Development Bank, and
Asian Development Bank.
(4) Preferred stock of non-U.S.-chartered corporations 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).
FFIEC 051
RC-B-11
(12-20)
RC-B - SECURITIES
FFIEC 051
Item No.
RC-B - SECURITIES
Caption and Instructions
NOTE: Investments in equity securities, including investment in mutual funds, with readily determinable
fair values not held for trading that were previously reportable in Schedule RC-B, item 7, columns C and
D, should be reported in Schedule RC, item 2.c, “Equity securities with readily determinable fair values
not held for trading.” Insured state banks that have received FDIC approval in accordance with Section
362.3(a) of the FDIC’s regulations to hold certain equity investments (“grandfathered equity securities”)
should report in Schedule RC-M, item 4, the aggregate cost basis of all equity securities with readily
determinable fair values not held for trading that are reported in Schedule RC, item 2.c, not just the cost
basis of those equity securities that are treated as “grandfathered.”
7
Not applicable.
8
Total. Report the sum of items 1 through 6.b. For institutions that have not adopted FASB
Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for
credit losses, the total of column A for this item must equal Schedule RC, item 2.a, "Held-tomaturity securities." For institutions that have adopted ASU 2016-13, the total of column A
for this item must equal Schedule RC, item 2.a, "Held-to-maturity securities," plus
Schedule RI-B, Part II, item 7, column B, “Balance end of current period,” for the allowance
for credit losses on held-to-maturity debt securities. For all institutions, the total of column D
for this item must equal Schedule RC, item 2.b, "Available-for-sale debt securities."
FFIEC 051
RC-B-12
(12-20)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
1
Caption and Instructions
Pledged securities. Report the amortized cost of all held-to-maturity debt securities
included in Schedule RC-B, column A, above; the fair value of all available-for-sale debt
securities included in Schedule RC-B, column D, above; and the fair value of all equity
securities with readily determinable fair values not held for trading included in Schedule RC,
item 2.c, 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.
Include as pledged securities:
(1) Held-to-maturity debt securities, available-for-sale debt securities, and equity securities
with readily determinable fair values not held for trading that have been "loaned" in
securities borrowing/lending transactions that do not qualify as sales under ASC
Topic 860, Transfers and Servicing.
(2) Held-to-maturity debt securities, available-for-sale debt securities, and equity securities
with readily determinable fair values not held for trading held by consolidated variable
interest entities (VIEs) that can be used only to settle obligations of the same
consolidated VIEs (the amounts of which should also be reported in Schedule SU,
item 7.a).
(3) Held-to-maturity debt securities, available-for-sale debt securities, and equity securities
with readily determinable fair values not held for trading owned by consolidated insurance
subsidiaries and held in custodial trusts that are pledged to insurance companies external
to the consolidated bank.
.
2
Maturity and repricing data for debt securities. Report in the appropriate subitem maturity
and repricing data for the bank's holdings of debt securities (reported in Schedule RC-B,
items 1 through 6.b above). Report the amortized cost of held-to-maturity debt securities and
the fair value of available-for-sale debt securities in the appropriate maturity and repricing
subitems. Exclude from Memorandum item 2 the bank's holdings of equity securities with
readily determinable fair values not held for trading (reported in Schedule RC, item 2.c)
(e.g., investments in mutual funds, common stock, preferred stock). Also exclude those debt
securities that are reported as "nonaccrual" in Schedule RC-N, item 10, column C.
The sum of Memorandum items 2.a.(1) through 2.c.(2) plus the amount of any nonaccrual
debt securities included in Schedule RC-N, item 10, column C, must equal Schedule RC-B,
sum of items 1 through 6.b, columns A and D.
For purposes of this memorandum item, the following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the debt security, and is known to both the borrower and the
lender. Also treated as a fixed interest rate is a predetermined interest rate which is a rate
that changes during the term of the debt security on a predetermined basis, with the exact
rate of interest over the life of the debt security known with certainty to both the borrower and
the lender when the debt security is acquired.
A floating 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 "prime rate," or to some other
variable criterion the exact value of which cannot be known in advance. Therefore, the exact rate
the debt security carries at any subsequent time cannot be known at the time of origination.
When the rate on a debt security with a floating rate has reached a contractual floor or ceiling
level, the debt security is to be treated as "fixed rate" rather than as "floating rate" until the
rate is again free to float.
FFIEC 051
RC-B-13
(12-20)
RC-B - SECURITIES
This page intentionally left blank.
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
Caption and Instructions
2
(cont.)
Remaining maturity is the amount of time remaining from the report date until the final contractual
maturity of a debt security without regard to the security's repayment schedule, if any.
Next repricing date is the date the interest rate on a floating rate debt security can next
change in accordance with the terms of the contract (without regard to the security’s
repayment schedule, if any, or expected prepayments) or the contractual maturity date of the
security, whichever is earlier.
Banks whose records or information systems provide data on the final contractual maturities,
next repricing dates, and expected average lives of their debt securities for time periods that
closely approximate the maturity and repricing periods specified in Memorandum items 2.a
through 2.d (e.g., 89 or 90 days rather than three months, 359 or 360 days rather than
12 months) may use these date to complete Memorandum items 2.a through 2.d.
For debt securities with scheduled contractual payments, banks whose records or information
systems provide repricing data that take into account these scheduled contractual payments,
with or without the effect of anticipated prepayments, may adjust these data in an appropriate
manner to derive reasonable estimates for the final contractual maturities of fixed rate debt
securities (and floating rate debt securities for purposes of Memorandum item 2.c) and the
next repricing dates of floating rate debt securities.
Callable fixed rate debt securities should be reported in Memorandum items 2.a, 2.b, and 2.d
without regard to their next call date unless the security has actually been called. When fixed
rate debt securities have been called, they should be reported on the basis of the time
remaining until the call date. Callable floating rate debt securities should be reported in
Memorandum items 2.a and 2.b on the basis of their next repricing date without regard to
their next call date if the security has not been called. Those that have been called should be
reported based on the earlier of their next repricing date or their actual call date.
Fixed rate mortgage pass-through securities (such as those guaranteed by the Government
National Mortgage Association (GNMA) or issued by the Federal Home Loan Mortgage
Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and certain
banks, savings associations, and securities dealers) and fixed rate Small Business
Administration (SBA) "Guaranteed Loan Pool Certificates" should be reported on the basis of
the time remaining until their final contractual maturity without regard to either expected
prepayments or scheduled contractual payments. Floating rate mortgage pass-through
securities and SBA "Guaranteed Loan Pool Certificates" should be reported in Memorandum
items 2.a and 2.b on the basis of their next repricing date.
Fixed rate debt securities that provide the reporting bank with the option to redeem them at
one or more specified dates prior to their contractual maturity date, so-called "put bonds,"
should be reported on the basis of the time remaining until the next "put" date. Floating rate
"put bonds" should be reported in Memorandum items 2.a and 2.b on the basis of their next
repricing date without regard to "put" dates if the bank has not exercised the put. If a "put"
has been exercised but the security has not yet been repaid, the "put" bond should be
reported based on the earlier of its next repricing date or its scheduled repayment date.
Zero coupon debt securities, including U.S. Treasury bills, should be treated as fixed rate debt
securities for purposes of this Memorandum item.
FFIEC 051
RC-B-15
(3-17)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
2.a
Caption and Instructions
Securities issued by the U.S. Treasury, U.S. Government agencies, and states and
political subdivisions in the U.S.; other non-mortgage debt securities; and mortgage
pass-through securities other than those backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or next repricing date of. Report the
bank's holdings of fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- in the appropriate subitems
according to the amount of time remaining to their final contractual maturities (without regard
to repayment schedules, if any). Report the bank's holdings of floating rate debt securities -other than mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages -- in the appropriate subitems according to the amount of time remaining
until their next repricing date. Exclude debt securities that are in nonaccrual status.
For held-to-maturity debt securities, report amortized cost. For available-for-sale debt
securities, report fair value.
2.a.(1)
2.a.(2)
2.a.(3)
FFIEC 051
Three months or less. Report the amount of:
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities of three months or less, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in three months or less.
Over three months through 12 months. Report the amount of:
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over three months through
12 months, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over three months through 12 months.
Over one year through three years. Report the amount of:
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over one year through three
years, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over one year through three years.
RC-B-16
(3-17)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
Caption and Instructions
2.a.(4)
Over three years through five years. Report the amount of:
2.a.(5)
2.a.(6)
2.b
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities backed
by closed-end first lien 1-4 family residential mortgages -- with remaining maturities
(without regard to repayment schedules, if any) of over three years through five years, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over three years through five years.
Over five years through 15 years. Report the amount of:
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over five years through 15
years, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over five years through 15 years.
Over 15 years. Report the amount of:
•
the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over 15 years, and
•
the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over 15 years.
Mortgage pass-through securities backed by closed-end first lien 1-4 family residential
mortgages with a remaining maturity or next repricing date of. Report the bank's
holdings of fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages in the appropriate subitems according to the amount of time
remaining to their final contractual maturities (without regard to repayment schedules, if any).
Report the bank's holdings of floating rate mortgage pass-through securities backed by
closed-end first lien 1-4 family residential mortgages in the appropriate subitems according to
the amount of time remaining until their next repricing date. Exclude mortgage pass-through
securities that are in nonaccrual status.
For held-to-maturity mortgage pass-through securities, report amortized cost. For availablefor-sale mortgage pass-through securities, report fair value.
FFIEC 051
RC-B-17
(3-17)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
Caption and Instructions
2.b.(1)
Three months or less. Report the amount of:
2.b.(2)
2.b.(3)
2.b.(4)
2.b.(5)
FFIEC 051
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities of three months or less, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in three months or
less.
Over three months through 12 months. Report the amount of:
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over three months through 12 months, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over three months
through 12 months.
Over one year through three years. Report the amount of:
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over one year through three years, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over one year
through three years.
Over three years through five years. Report the amount of:
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over three years through five years, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over three years
through five years.
Over five years through 15 years. Report the amount of:
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over five years through 15 years, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over five years
through 15 years.
RC-B-18
(3-17)
RC-B - SECURITIES
FFIEC 051
RC-B - SECURITIES
Memoranda
Item No.
Caption and Instructions
2.b.(6)
Over 15 years. Report the amount of:
2.c
•
the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over 15 years, and
•
the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over fifteen years.
Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS) with an
expected average life of. Report the bank's holdings of other mortgage-backed securities
(including collateralized mortgage obligations (CMOs), real estate mortgage investment
conduits (REMICs), and stripped mortgage-backed securities (MBS)) in the appropriate
subitems by their expected weighted average life as of the report date. Include both fixed rate
and floating rate securities. For held-to-maturity securities, report amortized cost. For
available-for-sale securities, report fair value. Exclude all mortgage pass-through securities.
Also exclude securities that are in nonaccrual status.
Banks should report based on the most recent average life information obtained within the
twelve months preceding the report date. Weighted average life is the dollar-weighted
average time in which principal is repaid. For a mortgage-backed security, weighted average
life should be based on the prepayment assumptions associated with the pool of loans
underlying the security as well as scheduled repayments. Weighted average life is computed
by (a) multiplying the amount of each principal reduction by the number of years or months
from the date of issuance or the testing date to the date of the principal reduction, (b) summing
the results, and (c) dividing the sum by the remaining principal balance as of the date of
issuance or the testing date. Because weighted average life should consider
expected prepayments, it is not equivalent to contractual maturity. Because it is dollar- and
time-weighted, it also is not equivalent to expected final maturity.
2.c.(1)
Three years or less. Report the bank's holdings of other mortgage-backed securities with
an expected weighted average life of three years or less as of the report date. Include both
fixed rate and floating rate securities.
2.c.(2)
Over three years. Report the bank's holdings of other mortgage-backed securities with an
expected weighted average life of over three years as of the report date. Include both fixed
rate and floating rate securities.
2.d
Debt securities with a remaining maturity of one year or less. Report all debt securities
with a remaining maturity of one year or less. Include both fixed rate and floating rate debt
securities. Exclude debt securities that are in nonaccrual status.
For held-to-maturity debt securities, report amortized cost. For available-for-sale debt
securities, report fair value.
The fixed rate debt securities (excluding "Other mortgage-backed securities") that should be
included in this item will also have been reported by remaining maturity in Schedule RC-B,
Memorandum items 2.a.(1), 2.a.(2), 2.b.(1), and 2.b.(2), above. The floating rate debt
securities (excluding "Other mortgage-backed securities") that should be included in this item
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Caption and Instructions
2.d
(cont.)
will have been reported by next repricing date in Memorandum items 2.a.(1), 2.a.(2), 2.b.(1),
and 2.b.(2), above. However, these four Memorandum items may include floating rate debt
securities with a remaining maturity of more than one year, but on which the interest rate can
next change in one year or less; those debt securities should not be included in this
Memorandum item 2.d. The "Other mortgage-backed securities" included in this item will
have been reported by expected weighted average life in Memorandum items 2.c.(1) and
2.c.(2) above.
NOTE: Memorandum Item 3 is to be completed semiannually in the June and December reports only.
3
Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or
trading securities during the calendar year-to-date. If the reporting bank has sold any
held-to-maturity debt securities or has transferred any held-to-maturity debt securities to the
available-for-sale or to trading securities during the calendar year-to-date, report the total
amortized cost of these held-to-maturity debt securities as of their date of sale or transfer.
Exclude the amortized cost of any held-to-maturity debt security that has been sold near
enough to (e.g., within three months of) its maturity date (or call date if exercise of the call is
probable) that interest rate risk is substantially eliminated as a pricing factor. Also exclude
the amortized cost of any held-to-maturity debt security that has been sold after the collection
of a substantial portion (i.e., at least 85 percent) of the principal outstanding at acquisition
due to prepayments on the debt security or, if the debt security is a fixed rate security, due to
scheduled payments payable in equal installments (both principal and interest) over its term.
4
Structured notes. Report in this item all structured notes included in the held-to-maturity
and available-for-sale accounts and reported in Schedule RC-B, items 2, 3, 5, and 6. 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.
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) a single index of a Constant Maturity Treasury (CMT) rate or a Cost of Funds Index
(COFI), or
(b) changes in the Consumer Price Index (CPI). However, exclude from structured
notes all U.S. Treasury Inflation-Protected Securities (TIPS).
(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
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Item No.
4
(cont.)
Caption and Instructions
rates increase (or prepayment rates decrease), the maturity of an IAN extends, similar to
that of a collateralized mortgage obligation. When the principal payments on these notes
are indexed to the prepayment performance of a reference pool of mortgages or a
reference mortgage-backed security, but the notes themselves are not collateralized by
the mortgages or the mortgage-backed security, the notes are sometimes marketed as
Prepayment-Linked Notes.
(4) Dual Index Notes. These bonds have coupon rates that are determined by the
difference between two market indices, typically the CMT rate and LIBOR. These bonds
often have a fixed coupon rate for a brief period, followed by a longer period of variable
rates, e.g., 8 percent fixed for two years, then the 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 contain adjusting caps, adjusting floors, leverage, or variable
principal redemption. Furthermore, debt securities that do not possess the aforementioned
characteristics of a structured note need not be reported as structured notes solely because
they are callable as of a specified date at a specified price. In addition, debt securities that in
the past possessed the characteristics of a structured note, but which have "fallen through"
their structures (e.g., all of the issuer's call options have expired and there are no more
adjustments to the interest rate on the security), need not be reported as structured notes.
Generally, municipal and corporate securities that have periodic call options should not be
reported as structured notes. Although many of these securities have features similar to
those found in some structured notes (e.g., step-ups, which generally remain callable after a
step-up date), they are not commonly known as structured notes. 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).
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Item No.
Caption and Instructions
4
(cont.)
(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.
4.a
Amortized cost (of structured notes). Report the amortized cost of all structured notes
included in the held-to-maturity and available-for-sale accounts. The amortized cost of these
securities will have been reported in columns A and C of the body of Schedule RC-B.
4.b
Fair value (of structured notes). Report the fair (market) value of structured notes reported
in Memorandum item 4.a above. The fair value of these securities will have been reported in
columns B and D of the body of Schedule RC-B. 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 instrument.
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SCHEDULE RC-C – LOANS AND LEASE FINANCING RECEIVABLES
Part I. Loans and Leases
General Instructions for Part I
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" and for "lease accounting" for further information.
Report all loans and leases that the bank has the intent and ability to hold for the foreseeable future or
until maturity or payoff, i.e., loans and leases held for investment, in Schedule RC-C, Part I. Also report in
Schedule RC-C, Part I, all loans and leases held for sale as part of the consolidated bank’s mortgage
banking activities or activities of a similar nature involving other types of loans. Include the fair value of all
loans held for investment and all loans held for sale that the bank has elected to report at fair value under
a fair value option. Loans reported at fair value in Schedule RC-C, Part I, should include only the fair
value of the funded portion of the loan. If the unfunded portion of the loan, if any, is reported at fair value,
this fair value should be reported as an “Other asset” or an “Other liability,” as appropriate, in
Schedule RC, item 11 or item 20, respectively. If the bank has elected to apply the fair value option to
any loans held for investment or held for sale, it also must report the fair value of these loans in
Schedule SU, item 3.a.
Exclude from Schedule RC-C, Part I, all loans and leases classified as trading (report in Schedule RC,
item 5, "Trading assets.")
When a loan is acquired (through origination or purchase) with the intent or expectation that it may or will
be sold at some indefinite date in the future, the loan should be reported as held for sale or held for
investment, based on facts and circumstances, in accordance with generally accepted accounting
principles and related supervisory guidance. In addition, a loan acquired and held for securitization
purposes should be reported as a loan held for sale, provided the securitization transaction will be
accounted for as a sale 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). Notwithstanding the above, banks may classify loans as trading if the bank applies fair
value accounting, with changes in fair value reported in current earnings, and manages these assets and
liabilities as trading positions, subject to the controls and applicable regulatory guidance related to trading
activities. For example, a bank would generally not classify a loan that meets these criteria as a trading
asset unless the bank holds the loan for one of the following purposes: (a) for market making activities,
including such activities as accumulating loans for sale or securitization; (b) to benefit from actual or
expected price movements; or (c) to lock in arbitrage profits.
Loans held for sale (not classified as trading in accordance with the preceding instruction) shall be
reported in Schedule RC-C, Part I, at the lower of cost or fair value as of the report date, except for those
that the bank has elected to account for at fair value under a fair value option. For loans held for sale that
are reported at the lower of cost or fair value, the amount by which cost exceeds fair value, if any, shall be
accounted for as a valuation allowance. For further information, see ASC Subtopic 948-310, Financial
Services-Mortgage Banking – Receivables (formerly FASB Statement No. 65, “Accounting for Certain
Mortgage Banking Activities,” as amended), ASC Subtopic 310-10, Receivables – Overall (formerly
AICPA Statement of Position 01-6, "Accounting by Certain Entities (Including Entities With Trade
Receivables) That Lend to or Finance the Activities of Others"), and the March 26, 2001, Interagency
Guidance on Certain Loans Held for Sale.
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General Instructions for Part I (cont.)
Institutions that have not adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13),
which governs the accounting for credit losses, should report loans and leases held for investment in this
schedule without any deduction for the allowance for loan and lease losses or any allocated transfer risk
reserves related to loans and leases, which are to be reported in Schedule RC, item 4.c, "Allowance for
loan and lease losses." Institutions that have adopted ASU 2016-13 should report loans and leases held
for investment in this schedule without any deduction for allowances for credit losses on loans and leases
or any allocated transfer risk reserves related to loans and leases, which are to be reported in
Schedule RC, item 4.c, "Allowance for loan and lease losses."
Each item in this schedule should be reported net of (1) unearned income (to the extent possible) and (2)
deposits accumulated for the payment of personal loans (hypothecated deposits). Net unamortized loan
fees represent an adjustment of the loan yield, and shall be reported in this schedule 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 Schedule RC-C, Part I, item 11, "LESS: Any unearned income on loans
reflected in items 1-9 above." Net unamortized direct loan origination costs shall be added to the related
loan balances in each item in this schedule. (See the Glossary entry for "loan fees" for further
information.)
For institutions that have not adopted ASU 2016-13, "purchased credit-impaired loans" are loans
accounted for in accordance with 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"), that a bank has purchased, including those
acquired in a purchase business combination, where there is evidence of deterioration of credit quality
since the origination of the loan and it is probable, at the purchase date, that the bank will be unable to
collect all contractually required payments receivable. Neither the accretable yield nor the nonaccretable
difference associated with purchased credit-impaired loans should be reported as unearned income in
Schedule RC-C, Part I, item 11. In addition, the nonaccretable difference must not be recognized as an
adjustment of yield, loss accrual, or valuation allowance.
For institutions that have adopted ASU 2016-13, “purchased credit-deteriorated loans” are acquired
individual loans (or acquired groups of loans with similar risk characteristics) accounted for in accordance
with ASC Topic 326, Financial Instruments‒Credit Losses, that, as of the date of acquisition, have
experienced a more-than-insignificant deterioration in credit quality since origination, as determined by
the acquiring institution’s assessment. Unless accounted for at fair value under a fair value option,
purchased credit-deteriorated loans should be reported in Schedule RC-C, Part I, at amortized cost.
Any noncredit discount or premium on a purchased credit-deteriorated loan should not be reported as
unearned income in Schedule RC-C, Part I, item 11.
If, as a result of a change in circumstances, the bank regains control of a loan previously accounted
for appropriately as having been sold because one or more of the conditions for sale accounting in
ASC Topic 860 are no longer met, such a change should be accounted for in the same manner as a
purchase of the loan from the former transferee (purchaser) in exchange for liabilities assumed. The
rebooked loan must be reported as a loan asset in Schedule RC-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. 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 a bank 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, the loans are eligible for repurchase, the bank is deemed to have regained effective control
over these loans, and the delinquent loans must be brought back onto the bank's books as loan assets.
All loans should be categorized in Schedule RC-C, Part I, according to security, borrower, or purpose.
All loans satisfying the criteria in the Glossary entry for “Loan secured by real estate” (except those to
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General Instructions for Part I (cont.)
states and political subdivisions in the U.S.) should be categorized as “Loans secured by real estate” in
Schedule RC-C, part I. Loans secured by other collateral, such as securities, inventory, or automobiles,
would require further examination of both purpose and borrower to properly categorize the loans in
Schedule RC-C, part I. For loan categories in Schedule RC-C, part I, that include certain loans to
individuals, the term “individual” may include a trust or other entity that acts on behalf of (or in place of) an
individual or a group of individuals for purposes of obtaining the loan. Loans covering two or more
categories are sometimes difficult to categorize. In such instances, categorize the entire loan according
to the major criterion.
Report in Schedule RC-C, Part I, all loans and leases on the books of the reporting bank even if on the
report date they are past due and collection is doubtful. Exclude any loans or leases the bank has sold or
charged off. Also exclude assets received in full or partial satisfaction of a loan or lease (unless the asset
received is itself reportable as a loan or lease) and any loans for which the bank 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 entries for "troubled debt
restructurings" and "foreclosed assets" for further discussion of these topics.
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General Instructions for Part I (cont.)
When a bank acquires either (1) a portion of an entire loan that does not meet the definition of a
participating interest (i.e., a nonqualifying loan participation) or (2) a qualifying participating interest in a
transfer that does not does not meet all of the conditions for sale accounting, it should normally report the
loan participation or participating interest in Schedule RC, item 4.b, “Loans and leases held for
investment.” The bank also should report the loan participation or participating interest in Schedule
RC-C, Part I, in the loan category appropriate to the underlying loan, e.g., as a “commercial and industrial
loan” in item 4 or as a “loan secured by real estate” in item 1. See the Glossary entry for “transfers of
financial assets” for further information.
Exclude, for purposes of this schedule, the following:
(1) Federal funds sold, i.e., all loans of immediately available funds that mature in one business day or
roll over under a continuing contract, excluding funds lent in the form of securities purchased under
agreements to resell. Report federal funds sold in Schedule RC, item 3.a. However, report overnight
lending for commercial and industrial purposes as loans in this schedule.
(2) Lending transactions in the form of securities purchased under agreements to resell (report in
Schedule RC, item 3.b, "Securities purchased under agreements to resell").
(3) All holdings of commercial paper (report in Schedule RC, item 5, if held for trading; report in
Schedule RC-B, item 4.b, “Other mortgage-backed securities,” item 5.a, "Asset-backed securities,"
or item 6, "Other debt securities," as appropriate, if held for purposes other than trading).
(4) Contracts of sale or other loans indirectly representing other real estate (report in Schedule RC,
item 7, "Other real estate owned").
(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 amount of such undisbursed funds should be included in both loans and
deposits. (Do not include loan commitments that have not yet been taken down, even if fees have
been paid; see Schedule RC-L, item 1.)
Item Instructions for Part I
Item No.
1
Caption and Instructions
Loans secured by real estate. Report all loans that meet the definition of a “loan secured
by real estate.” See the Glossary entry for "loan secured by real estate" for the definition of
this term. Institutions should report in items 1.a.(1) through 1.e.(2) a nine-category
breakdown of 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 at origination 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.
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Part I. (cont.)
Item No.
Caption and Instructions
1
(cont.)
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.
(4) Loans secured by real estate that are guaranteed by the Small Business Administration
(SBA). Include SBA “Guaranteed Interest Certificates,” which represent a beneficial
interest in the entire SBA-guaranteed portion of an individual loan, provided the loan is a
loan secured by real estate. (Exclude SBA “Guaranteed Loan Pool Certificates,” which
represent an undivided interest in a pool of SBA-guaranteed portions of loans. SBA
“Guaranteed Loan Pool Certificates” should be reported as securities in Schedule RC-B,
item 2, or, if held for trading, in Schedule RC, item 5.)
Exclude from loans secured by real estate:
(1) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. that are secured by real estate (report in Schedule RC-C, Part I, item 8).
(2) All loans and sales contracts indirectly representing other real estate (report in
Schedule RC, item 7, "Other real estate owned").
(3) Loans to real estate companies, real estate investment trusts, mortgage lenders, and
foreign non-governmental 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 bank but are merely pledged as collateral (report in
Schedule RC-C, Part I, item 2, "Loans to depository institutions and acceptances of other
banks," or item 9.a, “Loans to nondepository financial institutions,” as appropriate).
(4) Bonds issued by the Federal National Mortgage Association or by the Federal Home
Loan Mortgage Corporation that are collateralized by residential mortgages (report in
Schedule RC-B, item 2, “U.S. Government agency and sponsored agency obligations").
(5) 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 (report in
Schedule RC-B, item 4.a). However, if the reporting bank is the seller-servicer of the
residential mortgages backing such securities and, as a result of a change in
circumstances, it must rebook any of these mortgages because one or more of the
conditions for sale accounting in 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. 166,
“Accounting for Transfers of Financial Assets”), are no longer met, the rebooked
mortgages should be included in Schedule RC-C, Part I, as loans secured by real estate.
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Part I. (cont.)
Item No.
1.a
Caption and Instructions
Construction, land development, and other land loans. Report in the appropriate subitem
loans secured by real estate made to finance (a) land development (i.e., the process of
improving land – laying sewers, water pipes, etc.) preparatory to erecting new structures or
(b) the on-site construction of industrial, commercial, residential, or farm buildings. For
purposes of 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 RC-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.
Loans written as combination construction-permanent loans secured by real estate should be
reported in this item until construction is completed or principal amortization payments begin,
whichever comes first. When the first of these events occurs, the loans should begin to be
reported in the real estate loan category in Schedule RC-C, Part I, item 1, appropriate to the
real estate collateral. For purposes of these reports, a combination construction-permanent
loan arises when the lender enters into a contractual agreement with the original borrower at
the time the construction loan is originated to also provide the original borrower with
permanent financing that amortizes principal after construction is completed and a certificate
of occupancy is obtained (if applicable). This construction-permanent loan structure is
intended to apply to situations where, at the time the construction loan is originated, the
original borrower:
•
•
Is expected to be the owner-occupant of the property upon completion of construction
and receipt of a certificate of occupancy (if applicable), for example, where the financing
is being provided to the original borrower for the construction and permanent financing of
the borrower’s residence or place of business, or
Is not expected to be the owner-occupant of the property, but repayment of the
permanent loan will be derived from rental income associated with the property being
constructed after receipt of a certificate of occupancy (if applicable) rather than from the
sale of the property being constructed.
All construction loans secured by real estate, other than combination construction-permanent
loans as described above, should continue to be reported in this item after construction is
completed unless and until (1) the loan is refinanced into a new permanent loan by the
reporting bank or is otherwise repaid, (2) the bank acquires or otherwise obtains physical
possession of the underlying collateral in full satisfaction of the debt, or (3) the loan is
charged
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Part I. (cont.)
Item No.
Caption and Instructions
1.a
(cont.)
off. For purposes of these reports, a construction loan is deemed to be refinanced into a new
permanent loan only if the bank originates:
•
•
An amortizing permanent loan to a new borrower (unrelated to the original borrower) who
has purchased the real property, or
A prudently underwritten new amortizing permanent loan at market terms to the original
borrower – including an appropriate interest rate, maturity, and loan-to-value ratio – that
is no longer dependent on the sale of the property for repayment. The loan should have
a clearly identified ongoing source of repayment sufficient to service the required
principal and interest payments over a reasonable and customary period relative to the
type of property securing the new loan. A new loan to the original borrower not meeting
these criteria (including a new loan on interest-only terms or a new loan with a short-term
balloon maturity that is inconsistent with the ongoing source of repayment criterion)
should continue to be reported as a “Construction, land development, and other land
loan” in the appropriate subitem of Schedule RC-C, Part I, item 1.a.
Exclude loans to finance construction and land development that are not secured by real
estate (report in other items of Schedule RC-C, Part I, as appropriate).
1.a.(1)
1-4 family residential construction loans. Report the amount outstanding of 1-4 family
residential construction loans, i.e., loans for the purpose of constructing 1-4 family residential
properties, which will secure the loan. The term “1-4 family residential properties” is defined
in Schedule RC-C, Part I, item 1.c, below. “1-4 family residential construction loans” include:
•
•
•
•
•
•
•
•
•
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Construction loans to developers secured by tracts of land on which 1-4 family residential
properties, including townhouses, are being constructed.
Construction loans secured by individual parcels of land on which single 1-4 family
residential properties are being constructed.
Construction loans secured by single-family dwelling units in detached or semidetached
structures, including manufactured housing.
Construction loans secured by duplex units and townhouses, excluding garden apartment
projects where the total number of units that will secure the permanent mortgage is
greater than four.
Construction loans secured by buildings in which individual condominium dwelling units
or individual cooperative housing units are being constructed, even if the buildings have
five or more units, where repayment will come from sales of individual condominium
dwelling units or interests in individual cooperative housing units, which are 1-4 family
residential properties.
Combination land and construction loans on 1-4 family residential properties, regardless
of the current stage of construction or development.
Combination construction-permanent loans on 1-4 family residential properties until
construction is completed or principal amortization payments begin, whichever comes
first.
Loans secured by apartment buildings undergoing conversion to condominiums or
cooperatives, regardless of the extent of planned construction or renovation, where
repayment will come from sales of individual condominium dwelling units or interests in
individual cooperative housing units, which are 1-4 family residential properties.
Bridge loans to developers on 1-4 family residential properties where the buyer will not
assume the same loan, even if construction is completed or principal amortization
payments have begun.
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Part I. (cont.)
Item No.
Caption and Instructions
1.a.(2)
Other construction loans and all land development and other land loans. Report the
amount outstanding of all construction loans for purposes other than constructing 1-4 family
residential properties, all land development loans, and all other land loans. Include loans for
the development of building lots and loans secured by vacant land, unless the same loan
finances the construction of 1-4 family residential properties on the property.
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 RC-C, Part I, item 1.a).
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.
A home equity line of credit (HELOC) is a revolving open-end line of credit secured by a lien
on a 1-to-4 family residential property that generally provides a draw period followed by a
repayment period. During the draw period, a borrower has revolving access to unused
amounts under a specified line of credit. During the repayment period, the borrower can no
longer draw on the line of credit and the outstanding principal is either due immediately in a
balloon payment or repaid over the remaining term through monthly payments. HELOCs in
the draw period or in the repayment period should be reported in Schedule RC-C, Part I,
item 1.c.(1).1 Beginning June 30, 2021, revolving open-end lines of credit that are no longer
1
All HELOCs that convert to non-revolving, closed-end status on or after January 1, 2021, must be reported as
open-end loans in item 1.c.(1). An institution that, as of March 31, 2020, reports HELOCs that convert to
non-revolving, closed-end status as closed-end loans in Schedule RC-C, Part I, item 1.c.(2)(a) or 1.c.(2)(b),
as appropriate, may continue to report HELOCs that convert on or before December 31, 2020, as closed-end loans in
Call Reports for report dates after that date. Alternatively, the institution may choose to begin reporting some or all of
these closed-end HELOCs as open-end loans in item 1.c.(1) as of the March 31, 2020, or any subsequent report
date, provided this reporting treatment is consistently applied.
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Part I. (cont.)
Item No.
Caption and Instructions
1.c
(cont.)
in the draw period and have converted to non-revolving closed-end status also should be
reported in Schedule RC-C, Part I, Memorandum item 16 (in the June and December reports
only).
Reverse 1-4 family residential mortgages should be reported in the appropriate subitem
based on whether they are closed-end or open-end mortgages. A reverse mortgage is an
arrangement in which a homeowner borrows against the equity in his/her home and receives
cash either in a lump sum or through periodic payments. However, unlike a traditional
mortgage loan, no payment is required until the borrower no longer uses the home as his or
her principal residence. Cash payments to the borrower after closing, if any, and accrued
interest are added to the principal balance. These loans may have caps on their maximum
principal balance or they may have clauses that permit the cap on the maximum principal
balance to be increased under certain circumstances. Homeowners generally have one of
the following options for receiving tax free loan proceeds from a reverse mortgage: (1) one
lump sum payment; (2) a line of credit; (3) fixed monthly payments to homeowner either for a
specified term or for as long as the homeowner lives in the home; or (4) a combination of the
above.
Reverse mortgages that provide for a lump sum payment to the borrower at closing, with no
ability for the borrower to receive additional funds under the mortgage at a later date, should
be reported as closed-end loans in Schedule RC-C, Part I, item 1.c.(2). Normally, closed-end
reverse mortgages are first liens and would be reported in Schedule RC-C, Part I,
item 1.c.(2)(a). Reverse mortgages that are structured like home equity lines of credit in
that they provide the borrower with additional funds after closing (either as fixed monthly
payments, under a line of credit, or both) should be reported as open-end loans in
Schedule RC-C, Part I, item 1.c.(1). Open-end reverse mortgages also are normally first
liens. Where there is a combination of both a lump sum payment to the borrower at closing
and payments after the closing of the loan, the reverse mortgage should be reported as an
open-end loan in Schedule RC-C, Part I, item 1.c.(1).
Exclude loans for 1-to-4 family residential property construction and land development
purposes (report in Schedule RC-C, Part I, item 1.a.(1)). 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 RC-C, Part I, item 1.a).
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, open-end lines of
credit secured by 1-to-4 family residential properties, i.e., HELOCs.
Include revolving, open-end lines of credit secured by 1-to-4 family residential properties
for which the draw periods have ended and the loans have converted to non-revolving
closed-end status.1 After their conversion, such loans also should be reported in
Schedule RC-C, Part I, Memorandum item 16, in the June and December reports only
beginning June 30, 2021.
Also include amounts drawn on a HELOC during its draw period that the borrower has
converted to a closed-end loan before the end of this period (sometimes referred to as a
HELOC flex product).
1
See footnote 1 in the instructions for Schedule RC-C, Part I, item 1.c.
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Part I. (cont.)
Item No.
Caption and Instructions
1.c.(2)
Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem the amount of all closed-end loans secured by 1-to-4 family residential properties
(i.e., closed-end first mortgages and junior liens).
Exclude loans that were extended under revolving, open-end lines of credit secured by 1-to-4
family residential properties for which the draw periods have ended and the loans have
converted to non-revolving closed-end status (report in Schedule RC-C, Part I, item 1.c.(1)
above).1
1.c.(2)(a)
Secured by first liens. Report the amount of all closed-end loans secured by first liens on
1-to-4 family residential properties.
1.c.(2)(b)
Secured by junior liens. Report the amount of all closed-end loans secured by junior
(i.e., other than first) liens on 1-to-4 family residential properties. Include loans secured by
junior liens in this item even if the bank also holds a loan secured by a first lien on the same
1-to-4 family residential property and there are no intervening junior liens.
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 RC-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.
1
See footnote 1 in the instructions for Schedule RC-C, Part I, item 1.c.
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Part I. (cont.)
Item No.
Caption and Instructions
1.d
(cont.)
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 RC-C,
Part I, item 1.a.(2)). Also exclude loans secured by nonfarm nonresidential properties (report
in Schedule RC-C, Part I, item 1.e).
1.e
Secured by nonfarm nonresidential properties. Report in the appropriate subitem loans
secured by real estate as evidenced by mortgages or other liens on nonfarm nonresidential
properties, including 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 RC-C,
Part I, item 1.a.(2)).
For purposes of reporting loans in Schedule RC-C, Part I, items 1.e.(1) and 1.e.(2), below,
the determination as to whether a nonfarm nonresidential property is considered “owneroccupied” should be made upon acquisition (origination or purchase) of the loan. Once a
bank determines whether a loan should be reported as “owner-occupied” or not, this
determination need not be reviewed thereafter.
1.e.(1)
Loans secured by owner-occupied nonfarm nonresidential properties. Report the
amount of loans secured by owner-occupied nonfarm nonresidential properties.
“Loans secured by owner-occupied nonfarm nonresidential properties” are those nonfarm
nonresidential property loans for which the primary source of repayment is the cash flow from
the ongoing operations and activities conducted by the party, or an affiliate of the party, who
owns the property. Thus, for loans secured by owner-occupied nonfarm nonresidential
properties, the primary source of repayment is not derived from third party, nonaffiliated,
rental income associated with the property (i.e., any such rental income is less than
50 percent of the source of repayment) or the proceeds of the sale, refinancing, or permanent
financing of the property. Include loans secured by hospitals, golf courses, recreational
facilities, and car washes unless the property is owned by an investor who leases the
property to the operator who, in turn, is not related to or affiliated with the investor (in which
case, the loan should be reported in Schedule RC-C, Part I, item 1.e.(2), below). Also
include loans secured by churches unless the property is owned by an investor who leases
the property to the congregation (in which case, the loan should be reported in
Schedule RC-C, Part I, item 1.e.(2), below).
1.e.(2)
Loans secured by other nonfarm nonresidential properties. Report the amount of
nonfarm nonresidential real estate loans that are not secured by owner-occupied nonfarm
nonresidential properties.
“Loans secured by other nonfarm nonresidential properties” are those nonfarm nonresidential
property loans where the primary source of repayment is derived from rental income
associated with the property (i.e., loans for which 50 percent or more of the source of
repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale,
refinancing, or permanent financing of the property. Include loans secured by hotels, motels,
dormitories, nursing homes, assisted-living facilities, mini-storage warehouse facilities, and
similar properties in this item as loans secured by other nonfarm nonresidential properties.
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Part I. (cont.)
Item No.
Caption and Instructions
1.e.(2)
(cont.)
In some instances, it may be appropriate to report loans secured by nursing homes or
assisted-living facilities in Schedule RC-C, Part I, item 1.e.(1), “Loans secured by owneroccupied nonfarm nonresidential properties.” The owner-occupied determination for a loan
secured by a nursing home or an assisted-living facility is based on whether 50 percent or
more of the source of repayment for the loan comes from the cash flow from the ongoing
operations and activities, such as medical or maintenance services, conducted by the party,
or an affiliate of the party, who owns the property rather than from third party, nonaffiliated,
rental income associated with the property or the proceeds from residents or patients
exercising “buy-in” options or “purchase” options on particular units.
2
Loans to depository institutions and acceptances of other banks. Report all loans (other
than those that meet the definition of a “loan 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 bank’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 bank. For further
information, see the Glossary entry for “bankers acceptances.”
Depository institutions cover:
(1) commercial banks in the U.S., including:
(a) U.S. branches and agencies of foreign banks, U.S. branches and agencies of foreign
official banking institutions, and investment companies that are chartered under
Article XII of the New York State banking law and are majority-owned by one or more
foreign banks; and
(b) all other commercial banks in the U.S., i.e., U.S. branches of U.S. banks;
(2) depository institutions in the U.S., other than commercial banks, including:
(a)
(b)
(c)
(d)
(e)
credit unions;
mutual or stock savings banks;
savings or building and loan associations;
cooperative banks; and
other similar depository institutions; and
(3) banks in foreign countries, including:
(a) foreign-domiciled branches of other U.S. banks; and
(b) foreign-domiciled branches of foreign banks.
See the Glossary entry for "banks, U.S. and foreign" and "depository institutions in the U.S."
for further discussion of these terms.
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 Schedule RC-C,
Part I, item 1.
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Part I. (cont.)
Item No.
Caption and Instructions
2
(cont.)
(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) The reporting bank's own acceptances discounted and held in its portfolio when the
account party is another depository institution.
Exclude from loans to depository institutions:
(1) All transactions reportable in Schedule RC, item 3, "Federal funds sold and securities
purchased under agreements to resell."
(2) Loans that meet the definition of a “loan secured by real estate,” even if extended to
depository institutions (report in Schedule RC-C, Part I, item 1).
(3) Loans to holding companies of depository institutions (report in Schedule RC-C, Part I,
item 9.a, “Loans to nondepository financial institutions”).
(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 in
Schedule RC-C, Part I, item 9.a, “Loans to nondepository financial institutions”).
(5) Loans to finance companies and insurance companies (report in Schedule RC-C, Part I,
item 9.a, “Loans to nondepository financial institutions”).
(6) Loans to brokers and dealers in securities, investment companies, and mutual funds
(report in Schedule RC-C, Part I, item 9.b, “Other loans”).
(7) Loans to Small Business Investment Companies (report in Schedule RC-C, Part I,
item 9.a, “Loans to nondepository financial institutions”).
(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 in Schedule RC-C, Part I, item 9.b, “Other loans”).
(9) Loans to federally-sponsored lending agencies (report in Schedule RC-C, Part I, item 9.a,
“Loans to nondepository financial institutions”). Refer to the Glossary entry for
"federally-sponsored lending agency" for the definition of this term.
(10) Dollar exchange acceptances created by foreign governments and official institutions
(report in Schedule RC-C, Part I, item 9.b, “Other loans”).
(11) Loans to foreign governments and official institutions, including foreign central banks
(report in Schedule RC-C, Part I, item 9.b, “Other loans”). See the Glossary entry for
"foreign governments and official institutions" for the definition of this term.
(12) Acceptances accepted by the reporting bank, discounted, and held in its portfolio, when
the account party is not another depository institution. Report such acceptances in
other items of Schedule RC-C, Part I, according to the account party.
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Part I. (cont.)
Item No.
3
Caption and Instructions
Loans to finance agricultural production and other loans to farmers. Report loans for
the purpose of financing agricultural production. Include such loans whether secured (other
than those that meet the definition of a “loan secured by real estate”) or unsecured and
whether made to farm and ranch owners and operators (including tenants) or to nonfarmers.
All other loans to farmers, other than those excluded below, should also be reported in this
item.
Include as loans to finance agricultural production and other loans to farmers:
(1) Loans and advances made for the purpose of financing agricultural production, including
the growing and storing of crops, the marketing or carrying of agricultural products by the
growers thereof, and the breeding, raising, fattening, or marketing of livestock.
(2) Loans and advances made for the purpose of financing fisheries and forestries, including
loans to commercial fishermen.
(3) Agricultural notes and other notes of farmers that the bank has discounted for, or
purchased from, merchants and dealers, either with or without recourse to the seller.
(4) Loans to farmers that are guaranteed by the Farmers Home Administration (FmHA) or by
the Small Business Administration (SBA) and that are extended, serviced, and collected
by a party other than the FmHA or SBA. Include SBA “Guaranteed Interest Certificates,”
which represent a beneficial interest in the entire SBA-guaranteed portion of an individual
loan, provided the loan is for the financing of agricultural production or other lending to
farmers. (Exclude SBA “Guaranteed Loan Pool Certificates,” which represent an
undivided interest in a pool of SBA-guaranteed portions of loans. SBA “Guaranteed Loan
Pool Certificates” should be reported as securities in Schedule RC-B, item 2, or, if held
for trading, in Schedule RC, item 5.)
(5) Loans and advances to farmers for purchases of farm machinery, equipment, and
implements.
(6) Loans and advances to farmers for all other purposes associated with the maintenance
or operations of the farm, including purchases of private passenger automobiles and
other retail consumer goods and provisions for the living expenses of farmers or ranchers
and their families.
Loans to farmers for household, family, and other personal expenditures (including credit
cards) that are not readily identifiable as being made to farmers need not be broken out of
Schedule RC-C, Part I, item 6, for inclusion in this item.
Exclude from loans to finance agricultural production and other loans to farmers:
(1) Loans that meet the definition of a “loan secured by real estate” (report in
Schedule RC-C, Part I, item 1).
(2) Loans to farmers for commercial and industrial purposes, e.g., when a farmer is operating
a business enterprise as well as a farm (report in Schedule RC-C, Part I, item 4).
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Part I. (cont.)
Item No.
Caption and Instructions
3
(cont.)
(3) Loans to farmers for the purpose of purchasing or carrying securities (report in
Schedule RC-C, Part I, item 9.b, “Other loans”).
(4) Loans to farmers secured by oil or mining production payments (report in
Schedule RC-C, Part I, item 4).
4
Commercial and industrial loans. Report loans for commercial and industrial purposes to
sole proprietorships, partnerships, corporations, and other business enterprises, whether
secured (other than those that meet the definition of a “loan secured by real estate”) or
unsecured, single-payment or installment.
Commercial and industrial loans may take the form of direct or purchased loans. Include
loans to individuals for commercial, industrial, and professional purposes but not for
investment or personal expenditure purposes. Also include the reporting bank's own
acceptances that it holds in its portfolio when the account party is a commercial or industrial
enterprise. Exclude all commercial and industrial loans held for trading.
Include loans of the types listed below as commercial and industrial loans. 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 (SBA).
Include SBA “Guaranteed Interest Certificates,” which represent a beneficial interest in
the entire SBA-guaranteed portion of an individual loan, provided the loan is for
commercial and industrial purposes. (Exclude SBA “Guaranteed Loan Pool Certificates,”
which represent an undivided interest in a pool of SBA-guaranteed portions of loans.
SBA “Guaranteed Loan Pool Certificates” should be reported as securities in
Schedule RC-B, item 2, or, if held for trading, in Schedule RC, item 5.)
(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.
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Part I. (cont.)
Item No.
Caption and Instructions
4
(cont.)
(6) Loans made to finance construction that do not meet the definition of a “loan 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 Schedule RC-C, Part I, item 9.b, 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.
(13) Overnight lending for commercial and industrial purposes.
Exclude from commercial and industrial loans:
(1) Loans that meet the definition of a “loan secured by real estate,” even if for commercial
and industrial purposes (report in Schedule RC-C, Part I, item 1).
(2) Loans to depository institutions (report in Schedule RC-C, Part I, item 2).
(3) Loans to nondepository financial institutions such as real estate investment trusts,
mortgage companies, and insurance companies (report in Schedule RC-C, Part I,
item 9.a).
(4) Loans for the purpose of purchasing or carrying securities (report in Schedule RC-C,
Part I, item 9.b).
(5) Loans for the purpose of financing agricultural production, whether made to farmers or to
nonagricultural businesses (report in Schedule RC-C, Part I, item 3).
(6) Loans to nonprofit organizations, such as hospitals or educational institutions (report as
all other loans in Schedule RC-C, Part I, item 9.b), except those for which oil or mining
production payments serve as collateral which are to be reported in this item.
(7) Holdings of acceptances accepted by other banks (report in Schedule RC-C, Part I,
item 2).
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Part I. (cont.)
Item No.
4
Caption and Instructions
(8) Holdings of the bank’s own acceptances when the account party is another bank (report
in Schedule RC-C, Part I, item 2) or a foreign government or official institution (report
in Schedule RC-C, Part I, item 9.b).
(9) Equipment trust certificates (report in Schedule RC-B, item 6, "Other debt securities").
(10) Any commercial or industrial loans held by the reporting bank for trading purposes
(report in Schedule RC, item 5, "Trading assets").
(11) Commercial paper (report in Schedule RC-B, item 5.a, "Asset-backed securities," or
item 6, "Other debt securities," or in Schedule RC, item 5, "Trading assets," as
appropriate).
5
Not applicable.
6
Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem all credit extended to individuals for household, family, and other
personal expenditures that does not meet the definition of a “loan secured by real estate,”
whether direct loans or purchased paper. Exclude loans to individuals for the purpose of
purchasing or carrying securities (report in Schedule RC-C, Part I, item 9.b).
Deposits accumulated by borrowers for the payment of personal loans (i.e., hypothecated
deposits) should be netted against the related loans.
6.a
Credit cards. Report all extensions of credit to individuals for household, family, and other
personal expenditures arising from credit cards. Report the total amount outstanding of all
funds advanced under these credit cards regardless of whether there is a period before
interest charges are made. Report only amounts carried on the books of the reporting bank
as loans that are outstanding on the report date, even if the plan is shared with other banks
or organizations and even if accounting and billing are done by a correspondent bank or the
accounting center of a plan administered by others.
If the reporting bank has securitized credit cards and has retained a seller's interest that is not
in the form of a security, the carrying value of the seller's interest should be reported as credit
card loans in this item. For purposes of these reports, the term "seller's interest" means the
reporting bank'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 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.
Do not net credit balances resulting from overpayments of account balances on credit card
accounts against the debit balances of other credit card accounts. Report credit balances in
Schedule RC-E, item 1, column A, and item 7, column B.
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Part I. (cont.)
Item No.
Caption and Instructions
6.a
(cont.)
Exclude from credit cards:
(1) Credit extended under credit card plans to business enterprises (report in
Schedule RC-C, Part I, item 4, "Commercial and industrial loans").
(2) All credit extended to individuals through credit cards that meets the definition of a “loan
secured by real estate” (report in Schedule RC-C, Part I, item 1).
(3) All credit extended to individuals for household, family, and other personal expenditures
under prearranged overdraft plans (report in Schedule RC-C, Part I, item 6.b).
If the bank acts only as agent or correspondent for other banks or nonbank corporations and
carries no credit card plan assets on its books, enter a zero. Banks that do not participate in
any credit card plan should also enter a zero.
6.b
Other revolving credit plans. Report all extensions of credit to individuals for household,
family, and other personal expenditures arising from prearranged overdraft plans and other
revolving credit plans not accessed by credit cards. Report the total amount outstanding of
all funds advanced under these revolving credit plans regardless of whether there is a period
before interest charges are made.
Do not net credit balances resulting from overpayments of account balances on other
revolving credit plan accounts against the debit balances of other revolving credit plan
accounts. Report credit balances in Schedule RC-E, item 1, column A, and item 7, column B.
Exclude from other revolving credit plans:
(1) All ordinary (unplanned) overdrafts on transaction accounts not associated with revolving
credit plans (report in other items of Schedule RC-C, Part I, as appropriate).
(2) Credit extended to individuals for household, family, and other personal expenditures
arising from credit cards (report in Schedule RC-C, Part I, item 6.a).
6.c
Automobile loans. Report all consumer loans extended for the purpose of purchasing new
and used passenger cars and other vehicles such as minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use. Include both direct and indirect
consumer automobile loans as well as retail installment sales paper purchased by the bank
from automobile dealers.
Exclude from automobile loans:
(1) Loans that meet the definition of a “loan secured by real estate,” even if extended for the
purpose of purchasing an automobile (report in Schedule RC-C, Part I, item 1).
(2) Consumer loans for purchases of, or otherwise secured by, motorcycles, recreational
vehicles, golf carts, boats, and airplanes (report in Schedule RC-C, Part I, item 6.d).
(3) Personal cash loans secured by automobiles already paid for (report in Schedule RC-C,
Part I, item 6.d).
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Part I. (cont.)
Item No.
Caption and Instructions
6.c
(cont.)
(4) Vehicle flooring or floor-plan loans (report in Schedule RC-C, Part I, item 4).
(5) Loans to finance purchases of passenger cars and other vehicles for commercial,
industrial, state or local government, or other nonpersonal nonagricultural use (report in
Schedule RC-C, Part I, item 4, item 8, or item 9,b, as appropriate).
(6) Loans to finance vehicle fleet sales (report in Schedule RC-C, Part I, item 4).
(7) Loans to farmers for purchases of passenger cars and other vehicles used in association
with the maintenance or operations of the farm, and loans for purchases of farm
equipment (report in Schedule RC-C, Part I, item 3).
(8) Consumer automobile lease financing receivables (report in Schedule RC-C, Part I,
item 10).
(9) Consumer loans where the purchase of an automobile is not the primary purpose of the
loan (report in Schedule RC-C, Part I, item 6.d).
6.d
Other consumer loans. Report all other loans to individuals for household, family, and other
personal expenditures (other than those that meet the definition of a “loan secured by real
estate” and other than those for purchasing or carrying securities). Include loans for such
purposes as:
(1) purchases of household appliances, furniture, trailers, and boats;
(2) repairs or improvements to the borrower's residence (that do not meet the definition of a
“loan secured by real estate”);
(3) educational expenses, including student loans;
(4) medical expenses;
(5) personal taxes;
(6) vacations;
(7) consolidation of personal (nonbusiness) debts;
(8) purchases of real estate or mobile homes to be used as a residence by the borrower's
family (that do not meet the definition of a “loan secured by real estate”); and
(9) other personal expenditures.
Other consumer loans may take the form of:
(1) Installment loans, demand loans, single payment time loans, and hire purchase contracts
(for purposes other than retail sales of passenger cars and other vehicles such as
minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks for personal
use), and should be reported as loans to individuals for household, family, and other
personal expenditures regardless of size or maturity and regardless of whether the loans
are made by the consumer loan department or by any other department of the bank.
(2) Retail installment sales paper purchased by the bank from merchants or dealers (other
than dealers of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks), finance companies, and others.
FFIEC 051
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Part I. (cont.)
Item No.
Caption and Instructions
6.d
(cont.)
Exclude from other consumer loans:
(1) All direct and purchased loans, regardless of purpose, that meet the definition of a loan
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 (report in Schedule RC-C, Part I, item 1).
(2) Loans to individuals that do not meet the definition of a “loan secured by real estate” for
the purpose of investing in real estate when the real estate is not to be used as a
residence or vacation home by the borrower or by members of the borrower's family
(report in Schedule RC-C, Part I, item 9.b).
(3) Loans to individuals for commercial, industrial, and professional purposes and for
"floor plan" or other wholesale financing (report in Schedule RC-C, Part I, item 4).
(4) Loans to individuals for investment (as distinct from commercial, industrial, or
professional) purposes or for the purpose of purchasing or carrying securities (report in
Schedule RC-C, Part I, item 9.b).
(5) Loans to merchants, automobile dealers, and finance companies on their own promissory
notes, secured by the pledge of installment paper or similar instruments (report in
Schedule RC-C, Part I, item 4, or as loans to nondepository financial institutions in
Schedule RC-C, Part I, item 9.a, as appropriate).
(6) Loans to farmers, regardless of purpose, to the extent that can be readily identified as
such loans (report in Schedule RC-C, Part I, item 3).
(7) All credit extended to individuals for household, family, and other personal expenditures
arising from:
(a) Credit cards (report in Schedule RC-C, Part I, item 6.a);
(b) Prearranged overdraft plans (report in Schedule RC-C, Part I, item 6.b); and
(c) Retail sales of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks for personal use (report in
Schedule RC-C, Part I, item 6.c).
7
Not applicable.
8
Obligations (other than securities and leases) of states and political subdivisions in
the U.S. Report all obligations of states and political subdivisions in the United States
(including overdrafts and obligations secured by real estate), other than leases and
obligations reported as securities. (Report leases to states and political subdivisions in
the U.S. in Schedule RC-C, Part I, item 10, and securities issued by such entities in
Schedule RC-B, item 3, "Securities issued by states and political subdivisions in the U.S.,"
or item 4, "Mortgage-backed securities," as appropriate.) Exclude all such obligations held
for trading.
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Part I. (cont.)
Item No.
Caption and Instructions
8
(cont.)
States and political subdivisions in the U.S. include:
(1) 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;
(2) the governments of Puerto Rico and of the U.S. territories and possessions and their
political subdivisions; and
(3) Indian tribes in the U.S.
Treatment of industrial development bonds (IDBs). Industrial development bonds (IDBs),
sometimes referred to as "industrial revenue bonds," are issued under the auspices of states
or political subdivisions for the benefit of a private party or enterprise where that party or
enterprise, rather than the government entity, is obligated to pay the principal and interest on
the obligation. For purposes of these reports, all IDBs should be reported as securities in
Schedule RC-B, item 3, or as loans in this item (Schedule RC-C, Part I, item 8), consistent
with the asset category in which the bank reports IDBs on its balance sheet for other financial
reporting purposes. Regardless of whether they are reported as securities in Schedule RC-B
or as loans in Schedule RC-C, Part I, all IDBs that meet the definition of a "security" in
ASC Topic 320, Investments-Debt 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, also
include in this item all obligations (other than securities) of states and political subdivisions in
the U.S. except those that meet any of the following criteria:
(1) Industrial development bonds (IDBs) that are reported as securities in accordance with
the reporting treatment described above (report as securities in Schedule RC, item 2, and
Schedule RC-B, item 3).
(2) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) which
are rated by a nationally-recognized rating service (report as securities in Schedule RC,
item 2, and Schedule RC-B, item 3).
(3) Mortgage-backed securities issued by state and local housing authorities (report as
securities in Schedule RC, item 2, and Schedule RC-B, item 4).
(4) Obligations of state and local governments that are guaranteed by the United States
Government (report as securities in Schedule RC, item 2, and Schedule RC-B, item 3).
(5) Nonrated obligations of states and political subdivisions in the U.S. that the bank
considers securities for other financial reporting purposes (report as securities in
Schedule RC, item 2, and Schedule RC-B, item 3).
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Part I. (cont.)
Item No.
Caption and Instructions
8
(cont.)
(6) Lease financing receivables of states and political subdivisions in the U.S. (report as
leases in Schedule RC-C, Part I, item 10).
(7) Obligations of states and political subdivisions in the U.S. held by the reporting bank for
trading purposes (report in Schedule RC, item 5).
9
Loans to nondepository financial institutions and other loans. Report in the appropriate
subitem loans to nondepository financial institutions and all other loans that cannot properly
be reported in one of the preceding items in this schedule.
9.a
Loans to nondepository financial institutions. Report all loans to nondepository financial
institutions.
Loans to nondepository financial institutions include:
(1) Loans (other than those that meet the definition of a “loan secured by real estate”) to real
estate investment trusts and to mortgage companies that specialize in mortgage loan
originations and warehousing or in mortgage loan servicing. (Exclude outright purchases
of mortgages or similar instruments by the bank from such companies, which – unless
held for trading – are to be reported in Schedule RC-C, Part I, item 1.)
(2) Loans to holding companies of other depository institutions.
(3) Loans to insurance companies.
(4) Loans to finance companies, mortgage finance companies, factors and other financial
intermediaries, short-term business credit institutions that extend credit to finance
inventories or carry accounts receivable, and institutions whose functions are
predominantly to finance personal expenditures (exclude 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).
(5) Loans to federally-sponsored lending agencies (see the Glossary entry for
“federally-sponsored lending agency" for the definition of this term).
(6) Loans to investment banks.
(7) Loans and advances made to the bank's own trust department.
(8) Loans to other domestic and foreign financial intermediaries whose functions are
predominantly the extending of credit for business purposes, such as investment
companies that hold stock of operating companies for management or development
purposes.
(9) Loans to Small Business Investment Companies.
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FFIEC 051
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Part I. (cont.)
Item No.
9.b
Caption and Instructions
Other loans. Report all other loans that cannot properly be reported in one of the preceding
items in this schedule.
Other loans include:
(1) Loans for purchasing or carrying securities, including:
(a) All loans to brokers and dealers in securities (other than those that meet the definition
of a “loan secured by real estate” and those to depository institutions).
(b) All loans, whether secured (other than those that meet the definition of a “loan
secured by real estate”) or unsecured, to any other borrower for the purpose of
purchasing or carrying securities, such as:
(i) Loans made to provide funds to pay for the purchase of securities at settlement
date;
(ii) Loans made to provide funds to repay indebtedness incurred in purchasing
securities;
(iii) Loans that represent the renewal of loans to purchase or carry securities;
(iv) Loans to investment companies and mutual funds, but excluding loans to Small
Business Investment Companies;
(v) Loans to "plan lenders" as defined in Section 221.4(a) of Federal Reserve
Regulation U; and
(vi) Loans to Employee Stock Ownership Plans (ESOPs);
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 Consolidated Report of Condition, 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.
(2) Unplanned overdrafts to deposit accounts (except overdrafts of depository institutions,
which are to be reported in Schedule RC-C, Part I, item 2; and overdrafts of states and
political subdivisions in the U.S., which are to be reported in Schedule RC-C, Part I, item 8).
(3) Loans (other than those that meet the definition of a “loan 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, which are to
be reported in Schedule RC-C, Part I, item 4).
(4) Loans to individuals for investment purposes (as distinct from commercial, industrial, or
professional purposes), other than those that meet the definition of a “loan secured by
real estate.”
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Part I. (cont.)
Item No.
Caption and Instructions
9.b
(cont.)
(5) Loans to foreign governments, their official institutions, and international and regional
institutions, other than those that meet the definition of a “loan secured by real estate”.
(6) 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 (except acceptances held for trading, which
are to be reported in Schedule RC, item 5).
Exclude from other loans:
(1) 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 such planned overdrafts in other items of
Schedule RC-C, Part I, as appropriate). For example, report overdrafts under consumer
check-credit plans as “Other revolving credit plans” to individuals in Schedule RC-C,
Part I, item 6.b. Report both planned and unplanned overdrafts on "due to" deposit
accounts of depository institutions in Schedule RC-C, Part I, item 2.
(2) Loans to depository institutions for the purpose of purchasing or carrying securities
(report Schedule RC-C, Part I, item 2).
(3) Transactions reportable in Schedule RC, item 3, "Federal funds sold and securities
purchased under agreements to resell."
(4) Loans that meet the definition of a “loan secured by real estate” (report in
Schedule RC-C, Part I, item 1).
(5) 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 Schedule RC-C, Part I, item 2).
(6) Loans to U.S. branches and agencies of foreign official banking institutions (report in
Schedule RC-C, Part I, item 2).
(7) Loans to foreign-government-owned nonbank corporations and enterprises for
commercial and industrial purposes (report in Schedule RC-C, Part I, item 4).
10
Lease financing receivables (net of unearned income). Report the net investments in all:
(1) Direct financing leases accounted for under ASC Topic 840, Leases, by an institution that
has not adopted ASC Topic 842, Leases, including the estimated residual value of leased
property and any unamortized initial direct costs, net of unearned income;
(2) Direct financing and sales-type leases accounted for under ASC Topic 842 by an
institution that has adopted ASC Topic 842, including the lease receivable, unamortized
initial direct costs (if applicable), and the unguaranteed residual asset, net of any deferred
selling profit on a direct financing lease; and
(3) Leveraged leases accounted for under ASC Topic 840 (including leveraged leases that
were grandfathered upon the adoption of ASC Topic 842 and remain grandfathered).
Include all leases to states and political subdivisions in the U.S. in this item.
FFIEC 051
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Part I. (cont.)
Item No.
11
Caption and Instructions
LESS: Any unearned income on loans reflected in items 1-9 above. To the extent
possible, the preferred treatment is to report the specific loan categories net of both unearned
income and net unamortized loan fees. A reporting bank should enter unearned income and
net unamortized loan fees only to the extent that these amounts are included in (i.e., not
deducted from) the various loan items of this schedule (Schedule RC-C, Part I, items 1
through 9). If a bank reports each loan item of this schedule net of both unearned income
and net unamortized loan fees, enter a zero in this item.
Do not include net unamortized direct loan origination costs in this item; such costs must be
added to the related loan balances reported in Schedule RC-C, Part I, items 1 through 9. In
addition, do not include unearned income on lease financing receivables in this item. Leases
should be reported net of unearned income in Schedule RC-C, Part I, item 10.
12
Total loans and leases held for investment and held for sale. Report the sum of
items 1.a.(1) through 10, less item 11.
The amount reported for this item must equal Schedule RC, item 4.a plus item 4.b.
FFIEC 051
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Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Schedule RC-C, Part I, Memorandum items 1.a.(1) through 1.f.(5), are to be completed
semiannually in the June and December reports only. Memorandum item 1.g is to be completed
quarterly.
1
Loans restructured in troubled debt restructurings that are in compliance with their
modified terms. Report in the appropriate subitem loans that have been restructured in
troubled debt restructurings and are in compliance with their modified terms. As set forth in
ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly
FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings," as amended by FASB Statement No. 114, "Accounting by Creditors for
Impairment of a Loan"), a troubled debt restructuring is a restructuring of a loan in which a
bank, for economic or legal reasons related to a borrower's financial difficulties, grants a
concession to the borrower that it would not otherwise consider. For purposes of this
Memorandum item, the concession consists of a modification of terms, such as a reduction of
the loan’s stated interest rate, principal, or accrued interest or an extension of the loan’s
maturity date at a stated interest rate lower than the current market rate for new debt with
similar risk, regardless of whether the loan is secured or unsecured and regardless of
whether the loan is guaranteed by the government or by others.
Once an obligation has been restructured in a troubled debt restructuring, it continues to be
considered a troubled debt restructuring until paid in full or otherwise settled, sold, or charged
off. However, if a restructured obligation is in compliance with its modified terms and the
restructuring agreement specifies an interest rate that at the time of the restructuring is
greater than or equal to the rate that the bank was willing to accept for a new extension of
credit with comparable risk, the loan need not continue to be reported as a troubled debt
restructuring in this Memorandum item 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 troubled debt
restructuring. Also, a loan to a third party purchaser of "other real estate owned" by the
reporting bank for the purpose of facilitating the disposal of such real estate is not considered
a troubled debt restructuring. For further information, see the Glossary entry for "troubled
debt restructurings."
Include in the appropriate subitem all loans restructured in troubled debt restructurings as
defined above that are in compliance with their modified terms, that is, restructured loans
(1) on which all contractual payments of principal or interest scheduled that are due under the
modified repayment terms have been paid 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 this item (1) those loans restructured in troubled debt restructurings on which
under their modified repayment terms either principal or interest is 30 days or more past due
and (2) those loans restructured in troubled debt restructurings that are in nonaccrual status
under their modified repayment terms. Report such loans restructured in troubled debt
restructurings in the category and column appropriate to the loan in Schedule RC-N, items 1
through 7, column A, B, or C, and in Schedule RC-N, Memorandum items 1.a through 1.f,
column A, B, or C.
Loan amounts should be reported net of unearned income to the extent that they are reported
net of unearned income in Schedule RC-C, Part I.
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Part I. (cont.)
Memoranda
Item No.
1.a
Caption and Instructions
Construction, land development, and other land loans:
1.a.(1)
1-4 family construction loans. Report all loans secured by real estate for the purpose
of constructing 1-4 family residential properties (as defined for Schedule RC-C, Part I,
item 1.a.(1)) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item 1-4 family construction loans
restructured in troubled debt restructurings that, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status (report in Schedule RC-N, item 1.a.(1)
and Memorandum item 1.a.(1)).
1.a.(2)
Other construction loans and all land development and other land loans. Report all
construction loans for purposes other than constructing 1-4 family residential properties, all
land development loans, and all other land loans (as defined for Schedule RC-C, Part I,
item 1.a.(2)) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item other construction loans and all
land development and other land loans restructured in troubled debt restructurings that,
under their modified repayment terms, are past due 30 days or more or are in nonaccrual
status (report in Schedule RC-N, item 1.a.(2) and Memorandum item 1.a.(2)).
1.b
Loans secured by 1-4 family residential properties. Report all loans secured by 1-4
family residential properties (as defined for Schedule RC-C, Part I, item 1.c) that have been
restructured in troubled debt restructurings and are in compliance with their modified terms.
Exclude from this item loans secured by 1-4 family residential properties restructured in
troubled debt restructurings that, under their modified repayment terms, are past due 30 days
or more or are in nonaccrual status (report in Schedule RC-N, item 1.c and Memorandum
item 1.b). Also exclude from this item all 1-4 family construction loans that have been
restructured in troubled debt restructurings and are in compliance with their modified terms
(report in Schedule RC-C, Part I, Memorandum item 1.a.(1), above).
1.c
Loans secured by multifamily (5 or more) residential properties. Report all loans
secured by multifamily (5 or more) residential properties (as defined for Schedule RC-C,
Part I, item 1.d) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item loans secured by multifamily
residential properties restructured in troubled debt restructurings that, under their modified
repayment terms, are past due 30 days or more or are in nonaccrual status (report in
Schedule RC-N, item 1.d and Memorandum item 1.c).
1.d
Secured by nonfarm nonresidential properties:
1.d.(1)
FFIEC 051
Loans secured by owner-occupied nonfarm nonresidential properties. Report all loans
secured by owner-occupied nonfarm nonresidential properties (as defined for Schedule RC-C,
Part I, item 1.e.(1),) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item loans secured by owner-occupied
nonfarm nonresidential properties restructured in troubled debt restructurings that, under their
modified repayment terms, are past due 30 days or more or are in nonaccrual status (report in
Schedule RC-N, item 1.e.(1) and Memorandum item 1.d.(1)).
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FFIEC 051
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Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
1.d.(2)
Loans secured by other nonfarm nonresidential properties. Report all loans secured by
other nonfarm nonresidential properties (as defined for Schedule RC-C, Part I, item 1.e.(2))
that have been restructured in troubled debt restructurings and are in compliance with their
modified terms. Exclude from this item loans secured by other nonfarm nonresidential
properties restructured in troubled debt restructurings that, under their modified repayment
terms, are past due 30 days or more or are in nonaccrual status (report in Schedule RC-N,
item 1.e.(2) and Memorandum item 1.d.(2)).
1.e
Commercial and industrial loans. Report all commercial and industrial loans (as defined
for Schedule RC-C, Part I, item 4) that have been restructured in troubled debt restructurings
and are in compliance with their modified terms. Exclude commercial and industrial loans
restructured in troubled debt restructurings that, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status (report in Schedule RC-N, item 4 and
Memorandum item 1.e).
1.f
All other loans. Report all other loans that cannot properly be reported in Schedule RC-C,
Part I, Memorandum items 1.a through 1.e, above that have been restructured in troubled
debt restructurings and are in compliance with their modified terms. Exclude from this item
all other loans restructured in troubled debt restructurings that, under their modified
repayment terms, are past due 30 days or more or are in nonaccrual status (report in
Schedule RC-N).
Include in this item loans in the following categories that have been restructured in troubled
debt restructurings and are in compliance with their modified terms:
(1) Loans secured by farmland (as defined for Schedule RC-C, Part I, item 1.b);
(2) Loans to depository institutions and acceptances of other banks (as defined for
Schedule RC-C, Part I, item 2);
(3) Loans to finance agricultural production and other loans to farmers (as defined for
Schedule RC-C, Part I, item 3);
(4) Loans to individuals for household, family, and other personal expenditures (as defined
for Schedule RC-C Part I, item 6);
(5) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. (as defined for Schedule RC-C, Part I, item 8); and
(6) Loans to nondepository financial institutions and other loans (as defined for
Schedule RC-C, Part I, item 9)
For loans in the following loan categories within “All other loans” that have been restructured
in troubled debt restructurings and are in compliance with their modified terms, report the
amount of such restructured loans in the appropriate subitem of Schedule RC-C, Part I,
Memorandum item 1.f, if the dollar amount of such restructured loans in that loan category
exceeds 10 percent of total loans restructured in troubled debt restructurings that are in
FFIEC 051
RC-C-26
(3-17)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
1.f
(cont.)
compliance with their modified terms (i.e., 10 percent of the sum of Schedule RC-C, Part I,
Memorandum items 1.a through 1.e plus Memorandum item 1.f):
• Memorandum item 1.f.(1), “Loans secured by farmland”;
• Memorandum item 1.f.(4)(a), Consumer “Credit cards”;
• Memorandum item 1.f.(4)(b), Consumer “Automobile loans”;
• Memorandum item 1.f.(4)(c), “Other” consumer loans; and
• Memorandum item 1.f.(5) “Loans to finance agricultural production and other loans to
farmers,” for banks with $300 million or more in total assets and banks with less than
$300 million in total assets that have loans to finance agricultural production and other
loans to farmers (Schedule RC-C, Part I, item 3) exceeding five percent of total loans and
leases held for investment and held for sale (Schedule RC-C, Part I, item 12).
1.g
Total loans restructured in troubled debt restructurings that are in compliance with
their modified terms. In the reports for March and September, report the total amount of
loans restructured in troubled debt restructurings that are in compliance with their modified
terms. In the reports for June and December, report the sum of Memorandum items 1.a.(1)
through 1.f.
2
Maturity and repricing data for loans and leases (excluding those in nonaccrual
status). Report in the appropriate subitem maturity and repricing data for the bank's loans
and leases held for investment and held for sale. Loans and leases are to be reported in this
Memorandum item regardless of whether they are current or are reported as "past due and
still accruing" in Schedule RC-N, columns A and B. However, exclude those loans and
leases that are reported as "nonaccrual" in Schedule RC-N, column C.
The sum of Memorandum items 2.a.(1) through 2.b.(6) plus total nonaccrual loans
and leases from Schedule RC-N, item 9, column C, must equal Schedule RC-C, sum of
items 1 through 10.
For purposes of this memorandum item, the following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the loan or lease, and is known to both the borrower and the
lender. Also treated as a fixed interest rate is a predetermined interest rate which 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 is acquired. Examples of predetermined-rate transactions are: (1) Loans that
carry a specified interest rate, for, say, six months and thereafter carry a rate equal to a
specific percentage over the initial rate. (2) Loans that carry a specified interest rate while
the loan amount is below a certain threshold amount but carry a different specified rate above
that threshold (e.g., a line of credit where the interest rate is 10% when the unpaid balance of
amounts advanced is $100,000 or less, and 8% when the unpaid balance is more than
$100,000).
A floating 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 bank'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 carries at any subsequent time cannot be known at the
time of origination.
FFIEC 051
RC-C-27
(9-19)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
2
(cont.)
When the rate on a loan with a floating rate has reached a contractual floor or ceiling
level, the loan is to be treated as "fixed rate" rather than as "floating rate" until the rate is
again free to float.
Remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of a loan or lease without regard to the loan's or lease's repayment
schedule, if any.
Next repricing date is the date the interest the rate on a floating rate loan can next change in
accordance with the terms of the contract (without regard to the loan’s repayment schedule, if
any, or expected prepayments) or the contractual maturity date of the loan, whichever is
earlier.
Banks whose records or information systems provide data on the final contractual maturities
and next repricing dates of their loans and leases for time periods that closely approximate
the maturity and repricing periods specified in Memorandum items 2.a through 2.c (e.g., 89 or
90 days rather than three months, 359 or 360 days rather than 12 months) may use these
data to complete Memorandum items 2.a through 2.c.
For loans and leases with scheduled contractual payments, banks whose records or
information systems provide repricing data that take into account these scheduled contractual
payments, with or without the effect of anticipated prepayments, may adjust these data in an
appropriate manner to derive reasonable estimates for the final contractual maturities of fixed
rate loans and leases (and floating rate loans for purposes of Memorandum item 2.c) and the
next repricing dates of floating rate loans.
Loan amounts should be reported net of unearned income to the extent that they have been
reported net of unearned income in Schedule RC-C, Part I, items 1 through 9. Leases must
be reported net of unearned income.
Fixed rate loans and leases that are past due (with respect to principal or interest) and still
accruing should be reported according to the time remaining to final contractual maturity
without regard to delinquency status. Floating rate loans that are past due (with respect to
principal or interest) and still accruing should be reported according to their next repricing
date without regard to delinquency status.
Report all unplanned overdrafts as fixed rate loans with a remaining maturity of three months
or less in Memorandum item 2.b.(1).
Report all leases, net of unearned income, as fixed rate instruments in Memorandum item 2.b
according to the amount of time remaining to final contractual maturity without regard to
repayment schedules.
Report fixed rate and floating rate loans made solely on a demand basis (i.e., without an
alternate maturity date or without repayment terms) as having a remaining maturity or next
repricing date of three months or less in Memorandum items 2.a.(1) and 2.b.(1),
FFIEC 051
RC-C-28
(9-19)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
2
(cont.)
as appropriate. In addition, report all fixed rate and floating rate loans made solely on a
demand basis as having a remaining maturity of one year or less in Memorandum item 2.c.
Fixed rate demand loans that have an alternate maturity date or repayment terms are to be
reported in this Memorandum item according to the amount of time remaining to the alternate
maturity date or final payment due date. Floating rate demand loans that have an alternate
maturity date or repayment terms are to be reported according to their next repricing date in
Memorandum items 2.a and 2.b, as appropriate. In addition, fixed rate and floating rate
demand loans for which the amount of time remaining to the alternate maturity date or final
payment due date is one year or less are to be reported in Memorandum item 2.c.
Fixed rate “Credit cards” and “Other revolving credit plans" are considered to have a
remaining maturity of over one year through three years and should be reported in
Memorandum item 2.b.(3), regardless of the actual maturity experience or expectation.
Floating rate "Credit cards” and “Other revolving credit plans" (e.g., where the rate varies, or
can be varied, periodically) are to be reported in Memorandum item 2.b according to their
next repricing date. Where the bank in its contract with the borrower simply reserves the right
to change the interest rate on the "Credit card” or “Other revolving credit," the plan should be
considered to have a fixed rate.
Student loans whose interest rate is adjusted periodically by the U.S. Government by means
of interest payments that include an amount of "additional interest" should be treated as
floating rate loans and should be reported in Memorandum item 2.b according to their next
repricing date.
Fixed rate loans that are held by the bank for sale and delivery in the secondary market
under the terms of a binding commitment should be reported in Memorandum item 2.a or 2.b,
as appropriate, on the basis of the time remaining until the delivery date specified in the
commitment. Floating rate loans that are held by the bank for sale and delivery in the
secondary market under the terms of a binding commitment should be reported in
Memorandum item 2.a or 2.b, as appropriate, based on the date the interest rates on the
loans can next change or the delivery date specified in the commitment, whichever is earlier.
Loans and leases that are held by the bank for sale and delivery in the secondary market
under the terms of a binding commitment should be included in Memorandum item 2.c only if
they have a remaining maturity of one year or less, i.e., without regard to the delivery date
specified in the commitment.
2.a
FFIEC 051
Closed-end loans secured by first liens on 1-4 family residential properties with a
remaining maturity or next repricing date of. Report the dollar amount of the bank's fixed
rate closed-end loans secured by first liens on 1-4 family residential properties in the
appropriate subitems according to the amount of time remaining to their final contractual
maturities (without regard to repayment schedules, if any). Report the dollar amount of the
bank's floating rate closed-end loans secured by first liens on 1-4 family residential properties
in the appropriate subitems according to their next repricing date. Exclude loans that are in
nonaccrual status.
RC-C-29
(3-17)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
2.a.(1)
Three months or less. Report the amount of:
2.a.(2)
2.a.(3)
2.a.(4)
2.a.(5)
FFIEC 051
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities of three months or less, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties with next repricing dates occurring in three months or less.
Over three months through 12 months. Report the amount of:
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities (without regard to repayment schedules, if any) of
over three months through 12 months, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties with next repricing dates occurring in over three months through 12 months.
Over one year through three years. Report the amount of:
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities (without regard to repayment schedules, if any) of
over one year through three years, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties with next repricing dates occurring in over one year through three years.
Over three years through five years. Report the amount of:
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities (without regard to repayment schedules, if any) of
over three years through five years, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties) with next repricing dates occurring in over three years through five years.
Over five years through 15 years. Report the amount of:
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities (without regard to repayment schedules, if any) of
over five years through 15 years, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties with next repricing dates occurring in over five years through 15 years.
RC-C-30
(3-17)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
2.a.(6)
Over 15 years. Report the amount of:
2.b
2.b.(1)
2.b.(2)
2.b.(3)
FFIEC 051
•
the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties with remaining maturities (without regard to repayment schedules, if any) of
over 15 years, and
•
the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties with next repricing dates occurring in over 15 years.
All loans and leases other than closed-end loans secured by first liens on 1-4 family
residential properties with a remaining maturity or next repricing date of. Report the
dollar amount of the bank's fixed rate loans and leases – other than closed-end loans
secured by first liens on 1-4 family residential properties -- in the appropriate subitems
according to the amount of time remaining to their final contractual maturities (without regard
to repayment schedules, if any). Report the dollar amount of the bank's floating rate loans -other than closed-end loans secured by first liens on 1-4 family residential properties -- in the
appropriate subitems according to their next repricing date. Exclude loans that are in
nonaccrual status.
Three months or less. Report the amount of:
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities of three months or
less, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties– with next repricing dates occurring in three months or less.
Over three months through 12 months. Report the amount of:
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities (without regard to
repayment schedules, if any) of over three months through 12 months, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties– with next repricing dates occurring in over three months
through 12 months.
Over one year through three years. Report the amount of:
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities (without regard to
repayment schedules, if any) of over one year through three years, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties– with next repricing dates occurring in over one year through
three years.
RC-C-31
(3-17)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
2.b.(4)
Over three years through five years. Report the amount of:
2.b.(5)
2.b.(6)
2.c
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities (without regard to
repayment schedules, if any) of over three years through five years, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties– with next repricing dates occurring in over three years
through five years.
Over five years through 15 years. Report the amount of:
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities (without regard to
repayment schedules, if any) of over five years through 15 years, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties – with next repricing dates occurring in over five years
through 15 years.
Over 15 years. Report the amount of:
•
the bank's fixed rate loans and leases -- other than closed-end loans secured by first
liens on 1-4 family residential properties -- with remaining maturities (without regard to
repayment schedules, if any) of over 15 years, and
•
the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties – with next repricing dates occurring in over 15 years.
Loans and leases with a remaining maturity of one year or less. Report all loans and
leases held for investment and held for sale with a remaining maturity of one year or less.
Include both fixed rate and floating rate loans and leases. Loans and leases that are held by
the bank for sale and delivery in the secondary market under the terms of a binding
commitment should be included in Memorandum item 2.c only if they have a remaining
maturity of one year or less, i.e., without regard to the delivery date specified in the
commitment.
The fixed rate loans and leases that should be included in this item will also have been
reported by remaining maturity in Schedule RC-C, Part I, Memorandum items 2.a.(1), 2.a.(2),
2.b.(1), and 2.b.(2), above. The floating rate loans that should be included in this item will
have been reported by next repricing date in Memorandum items 2.a.(1), 2.a.(2), 2.b.(1), and
2.b.(2), above. However, these four Memorandum items may include floating rate loans with
a remaining maturity of more than one year, but on which the interest rate can next change in
one year or less; those loans should not be included in this Memorandum item 2.c.
FFIEC 051
RC-C-32
(3-17)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
3
Caption and Instructions
Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RC-C, Part I, items 4 and 9. Report in
this item loans to finance commercial and residential real estate activities, e.g., acquiring,
developing, and renovating commercial and residential real estate, that are reported in
Schedule RC-C, Part I, items 4, "Commercial and industrial loans," and 9, "Loans to
nondepository financial institutions and other loans".
Such loans generally may include:
(1) loans made for the express purpose of financing real estate ventures as evidenced by
loan documentation or other circumstances connected with the loan; or
(2) loans made to organizations or individuals 80 percent of whose revenue or assets are
derived from or consist of real estate ventures or holdings.
Exclude from this item all loans secured by real estate that are reported in Schedule RC-C,
Part I, item 1. Also exclude loans to commercial and industrial firms where the sole purpose
for the loan is to construct a factory or office building to house the company's operations or
employees.
NOTE: Memorandum item 4 is to be completed semiannually in the June and December reports only.
4
Adjustable rate closed-end loans secured by first liens on 1-4 family residential
properties. Report the amount of closed-end loans secured by first liens on 1-4 family
residential properties included in Schedule RC-C, Part I, item 1.c.(2)(a), that have a floating
or adjustable interest rate.
A floating or adjustable 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 to some other
variable criterion the exact value of which cannot be known in advance. Therefore, the exact
rate the loan carries at any subsequent time cannot be known at the time of origination. For
purposes of this item, even if the rate on a loan with a floating or adjustable rate can no
longer float because it has reached a floor or ceiling level, the loan is to be reported in this
item as an adjustable rate loan.
Also include in this item amortizing fixed rate loans secured by first liens on 1-4 family
residential properties that have original maturities of one year or less and require a balloon
payment at maturity.
5 and 6
FFIEC 051
Not applicable.
RC-C-33
(3-19)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum items 7.a and 7.b are to be completed semiannually in the June and December
reports only by institutions that have not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13). Institutions that have adopted ASU 2016-13 should leave Memorandum items 7.a
and 7.b blank.
7
Purchased credit-impaired loans held for investment accounted for in accordance with
FASB ASC Subtopic 310-30. Report in the appropriate subitem the outstanding balance
and amount of "purchased credit-impaired loans" reported as held for investment in
Schedule RC-C, Part I, items 1 through 9, and accounted for in accordance with 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”). Purchased credit-impaired loans are loans that a bank
has purchased, including those acquired in a purchase business combination, where there is
evidence of deterioration of credit quality since the origination of the loan and it is probable, at
the purchase date, that the bank will be unable to collect all contractually required payments
receivable. Loans held for investment are those that the bank has the intent and ability to
hold for the foreseeable future or until maturity or payoff.
7.a
Outstanding balance. Report the outstanding balance of all purchased credit-impaired
loans reported as held for investment in Schedule RC-C, Part I, items 1 through 9. The
outstanding balance is the undiscounted sum of all amounts, including amounts deemed
principal, interest, fees, penalties, and other under the loan, owed to the bank at the report
date, whether or not currently due and whether or not any such amounts have been charged
off by the bank. However, the outstanding balance does not include amounts that would be
accrued under the contract as interest, fees, penalties, and other after the report date.
7.b
Amount included in Schedule RC-C, Part I, items 1 through 9. Report the amount of,
i.e., the recorded investment in, all purchased credit-impaired loans reported as held for
investment. The recorded investment in these loans will have been included in
Schedule RC-C, Part I, items 1 through 9.
8
Closed-end loans with negative amortization features secured by 1-4 family residential
properties. Report in the appropriate subitem the amount of closed-end loans with negative
amortization features secured by 1-4 family residential properties and, if certain criteria are
met, the maximum remaining amount of negative amortization contractually permitted on
these loans and the total amount of negative amortization included in the amount of these
loans. Negative amortization refers to a method in which a loan is structured so that the
borrower’s minimum monthly (or other periodic) payment is contractually permitted to be less
than the full amount of interest owed to the lender, with the unpaid interest added to the
loan’s principal balance. The contractual terms of the loan provide that if the borrower allows
the principal balance to rise to a pre-specified amount or maximum cap, the loan payments
are then recast to a fully amortizing schedule. Negative amortization features may be applied
to either adjustable rate mortgages or fixed rate mortgages, the latter commonly referred to
as graduated payment mortgages (GPMs).
Exclude reverse 1-4 family residential mortgage loans as described in the instructions for
Schedule RC-C, Part I, item 1.c.
FFIEC 051
RC-C-34
(3-19)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum item 8.a is to be completed by all banks semiannually in the June and December
reports only.
8.a
Total amount of closed-end loans with negative amortization features secured by
1-4 family residential properties (included in Schedule RC-C, Part I, items 1.c.(2)(a)
and (b)). Report the total amount of, i.e., the recorded investment in, closed-end loans
secured by 1-4 family residential properties whose terms allow for negative amortization.
The amounts included in this item will also have been reported in Schedule RC-C, Part I,
items 1.c.(2)(a) and (b).
NOTE: Memorandum items 8.b and 8.c are to be completed annually in the December report only by
banks that had closed-end loans with negative amortization features secured by 1-4 family residential
properties (as reported in Schedule RC-C, Part I, Memorandum item 8.a) as of the previous December 31
report date that exceeded the lesser of $100 million or 5 percent of total loans and leases held for
investment and held for sale (as reported in Schedule RC-C, Part I, item 12) as of the previous
December 31 report date.
8.b
Total maximum remaining amount of negative amortization contractually permitted on
closed-end loans secured by 1-4 family residential properties. For all closed-end loans
secured by 1-4 family residential properties whose terms allow for negative amortization (that
were reported in Schedule RC-C, Part I, Memorandum item 8.a), report the total maximum
remaining amount of negative amortization permitted under the terms of the loan contract
(i.e., the maximum loan principal balance permitted under the negative amortization cap less
the principal balance of the loan as of the quarter-end report date).
8.c
Total amount of negative amortization on closed-end loans secured by 1-4 family
residential properties included in the amount reported in Memorandum item 8.a above.
For all closed-end loans secured by 1-4 family residential properties whose terms allow for
negative amortization, report the total amount of negative amortization included in the amount
(i.e., the total amount of interest added to the original loan principal balance that has not yet
been repaid) reported in Schedule RC-C, Part I, Memorandum item 8.a above. Once a loan
reaches its maximum principal balance, the amount of negative amortization included in the
amount should continue to be reported until the principal balance of the loan has been
reduced through cash payments below the original principal balance of the loan.
9
Loans secured by 1-4 family residential properties in process of foreclosure. Report
the total unpaid principal balance of loans secured by 1-4 family residential properties)
included in Schedule RC-C, Part I, item 1.c, for which formal foreclosure proceedings to seize
the real estate collateral have started and are ongoing as of quarter-end, regardless of the
date the foreclosure procedure was initiated. Loans should be classified as in process of
foreclosure according to local requirements. If a loan is already in process of foreclosure and
the mortgagor files a bankruptcy petition, the loan should continue to be reported as in
process of foreclosure until the bankruptcy is resolved. Exclude loans where the foreclosure
process has been completed and the bank reports the real estate collateral as “Other real
estate owned” in Schedule RC, item 7. This item should include both closed-end and openend 1-4 family residential mortgage loans that are in process of foreclosure.
10 and 11 Not applicable.
FFIEC 051
RC-C-35
(3-19)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum item 12 is to be completed semiannually in the June and December reports only.
12
Loans (not subject to the requirements of FASB ASC 310-30 (former AICPA Statement
of Position 03-3)) and leases held for investment that were acquired in business
combinations with acquisition dates in the current calendar year. Report in the
appropriate column the specified information on loans and leases held for investment
purposes that were acquired in a business combination, as prescribed under ASC Topic 805,
Business Combinations (formerly FASB Statement No. 141(R), “Business Combinations”),
with an acquisition date in the current calendar year. The acquisition date is the date on
which the bank obtains control1 of the acquiree. If the reporting bank was acquired in a
transaction during the calendar year pursuant to ASC Topic 805 and pushdown accounting
was applied, report the specified information on the bank’s loans and leases reported as held
for investment after the application of push down accounting.
Loans and leases acquired in the current calendar year should be reported in this item in the
reports for June 30 and December 31 of the current calendar year, as appropriate, regardless
of whether the bank still holds the loans and leases. For example, loans and leases acquired
in a business combination with an acquisition date in the first six months of the current
calendar year should be reported in this item in both the June 30 and December 31 reports for
the current calendar year; loans and leases acquired in the second six months of the current
calendar year should be reported in the December 31 report for the current calendar year.
Institutions that have not adopted ASU 2016-13, which governs the accounting for credit
losses, should exclude purchased credit-impaired loans held for investment that are
accounted for in accordance with 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”) (report
information on such loans in Schedule RC-C, Memorandum item 7). For further information,
see the Glossary entry for “purchased credit-impaired loans and debt securities.”
Institutions that have adopted ASU 2016-13 should exclude purchased credit-deteriorated
loans held for investment that are accounted for in accordance with ASC Topic 326, Financial
Instruments‒Credit Losses.
Column Instructions
Column A, Fair value of acquired loans and leases at acquisition date: Report in this
column the total fair value of acquired loans and leases held for investment at the acquisition
date (see the Glossary entry for "fair value").
Column B, Gross contractual amounts receivable at acquisition date: Report in this
column the gross contractual amounts receivable, i.e., the total undiscounted amount of all
uncollected contractual principal and contractual interest payments on the receivable, both
past due, if any, and scheduled to be paid in the future, on the acquired loans and leases
held for investment at the acquisition date.
Column C, Best estimate at acquisition date of contractual cash flows not expected to
be collected: Report in this column the bank’s best estimate at the acquisition date of the
portion of the gross contractual cash flows receivable on acquired loans and leases held for
investment that the bank does not expect to collect.
1
Control has the meaning of “controlling financial interest” in ASC Subtopic 810-10, Consolidation – Overall
(formerly Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” as amended).
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Part I. (cont.)
Memoranda
Item No.
13
Caption and Instructions
Construction, land development, and other land loans with interest reserves.
Memorandum items 13.a and 13.b are to completed by banks that had construction, land
development, and other land loans (as reported in Schedule RC-C, Part I, item 1.a) that
exceeded 100 percent of total capital (as reported in Schedule RC-R, Part I, item 35.a) as of
the previous December 31. For purposes of Memorandum items 13, 13.a, and 13.b,
construction, land development, and other land loans are hereafter referred to as
“construction loans.”
When a bank enters into a loan agreement with a borrower on a construction loan, an interest
reserve is often included in the amount of the loan commitment to the borrower and it allows
the lender to periodically advance loan funds to pay interest charges on the outstanding
balance of the loan. The interest is capitalized and added to the loan balance.
13.a
Amount of loans that provide for the use of interest reserves. Report the amount of
construction loans included in Schedule RC-C, Part I, item 1.a, for which the loan agreement
with the borrower provides for the use of interest reserves.
If a construction loan included in Schedule RC-C, Part I, item 1.a, has been fully advanced or
the funds budgeted for interest have been fully advanced, but the loan agreement provided
for the use of interest reserves, continue to report the loan in this item even if the borrower is
now paying interest from other sources of funds. Similarly, if a construction loan included in
Schedule RC-C, Part I, item 1.a, has been renewed or extended, but the original loan
agreement provided for the use of interest reserves, continue to report the loan in this item.
Include in this item new construction loans (as defined for and reported in Schedule RC-C,
Part I, item 1.a) that have been granted for the purpose of paying interest on existing
construction loans when the new construction loan is secured by the same real estate that
secures the existing construction loan.
Exclude construction loans for which the loan agreement with the borrower does not provide
for the use of interest reserves.
13.b
Amount of interest capitalized from interest reserves on construction, land
development, and other land loans that is included in interest and fee income on loans
during the quarter. Report the amount of interest advanced to borrowers on construction
loans (as defined for Schedule RC-C, Part I, item 1.a) that has been capitalized into the
borrowers’ loan balances through the use of interest reserves (including interest advanced on
new construction loans granted for the purpose of paying interest on existing construction
loans when the loans are secured by the same real estate) and included in interest and fee
income during the quarter on “All other loans secured by real estate” (Schedule RI,
item 1.a.(1)(b)). The amount of capitalized interest included in interest income during the
quarter should be reduced by amounts reversed against interest during the quarter.
14
Pledged loans and leases. Report the amount of all loans and leases included in
Schedule RC-C, Part I, 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 loans and leases are pledged) or for any other purpose. Include loans and leases that
have been transferred in transactions that are accounted for as secured borrowings with a
pledge of collateral because they do not qualify as sales under ASC Topic 860, Transfers and
Servicing (formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of
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Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
14
(cont.)
Financial Assets and Extinguishments of Liabilities,” as amended). Also include loans and
leases held for sale or investment by consolidated variable interest entities (VIEs) that can be
used only to settle obligations of the same consolidated VIEs. (Such loans and leases should
also be reported in Schedule SU, item 7.a). In general, the pledging of loans and leases is
the act of setting aside certain loans and leases to secure or collateralize bank transactions
with the bank continuing to own the loans and leases unless the bank defaults on the
transaction.
When a bank is subject to a blanket lien arrangement or has otherwise pledged an entire
portfolio of loans to secure its Federal Home Loan Bank advances, it should report the
amount of the entire portfolio of loans subject to the blanket lien in this item. Any loans within
the portfolio that have been explicitly excluded or specifically released from the lien and that
the bank has the right, without constraint, to repledge to another party should not be reported
as pledged in this item. However, if any such loans have been repledged to another party,
they should be reported in this item.
NOTE: Memorandum item 15 is to be completed for the December report only.
15
Reverse mortgages. A reverse mortgage is an arrangement in which a homeowner borrows
against the equity in his or her home and receives cash either in a lump sum or through
periodic payments. However, unlike a traditional mortgage loan, no payment is required until
the borrower no longer uses the home as his or her principal residence. Cash payments to
the borrower after closing, if any, and accrued interest are added to the principal balance.
These loans may have caps on their maximum principal balance or they may have clauses
that permit the cap on the maximum principal balance to be increased under certain
circumstances. The reverse mortgage market currently consists of two basic types of
products: proprietary products designed and originated by financial institutions and a
federally-insured product known as a Home Equity Conversion Mortgage (HECM).
Report in the appropriate subitem the specified information about the bank’s involvement with
reverse mortgages.
15.a
Reverse mortgages outstanding that are held for investment. Report in the appropriate
subitem the amount of HECM and proprietary reverse mortgages held for investment that are
included in Schedule RC-C, Part I, item 1.c, Loans “Secured by 1-4 family residential
properties.” A loan is held for investment if the bank has the intent and ability to hold the loan
for the foreseeable future or until maturity or payoff. Exclude reverse mortgages that are held
for sale.
15.a.(1)
Home Equity Conversion Mortgage (HECM) reverse mortgages. Report the amount of
HECM reverse mortgages held for investment that are included in Schedule RC-C, Part I,
item 1.c, Loans “Secured by 1-4 family residential properties.”
15.a.(2)
Proprietary reverse mortgages. Report the amount of proprietary reverse mortgages held
for investment that are included in Schedule RC-C, Part I, item 1.c, Loans “Secured by 1-4
family residential properties.”
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Part I. (cont.)
Memoranda
Item No.
15.b
Caption and Instructions
Estimated number of reverse mortgage loan referrals to other lenders during the year
from whom compensation has been received for services performed in connection
with the origination of the reverse mortgages. A bank that does not underwrite and fund
reverse mortgages may refer customers to other lenders that underwrite and fund such
mortgages. Under the Real Estate Settlement Procedures Act and its implementing
regulations, a mortgage lender may pay fees or compensation to another party, such as a
bank that has referred a customer to the mortgage lender, only for services actually
performed by that party.
If the bank receives compensation from reverse mortgage lenders for services the bank has
performed in connection with the origination of reverse mortgages granted to customers that
the bank has referred to the reverse mortgage lenders, report in the appropriate subitem a
reasonable estimate of the number of HECM and proprietary reverse mortgages for which the
bank received such compensation during the year. Do not report the estimated amount of
referral fee income in these subitems.
15.b.(1)
Home Equity Conversion Mortgage (HECM) reverse mortgages. Report a reasonable
estimate of the number of HECM reverse mortgages for which the bank received
compensation for services performed during the year in connection with the origination of
HECM reverse mortgages granted to customers that the bank has referred to the reverse
mortgage lenders.
15.b.(2)
Proprietary reverse mortgages. Report a reasonable estimate of the number of proprietary
reverse mortgages for which the bank received compensation for services performed during
the year in connection with the origination of proprietary reverse mortgages granted to
customers that the bank has referred to the reverse mortgage lenders.
15.c
Principal amount of reverse mortgage originations that have been sold during the year.
Report in the appropriate subitem the principal amount of HECM and proprietary reverse
mortgages sold during the year that were originated by the bank. Report the principal
balance outstanding of the reverse mortgages as of their sale dates, which excludes any
unused commitments to the borrowers on the reverse mortgages sold.
15.c.(1)
Home Equity Conversion Mortgage (HECM) reverse mortgages. Report the principal
amount of HECM reverse mortgages sold during the year that were originated by the bank.
15.c.(2)
Proprietary reverse mortgages. Report the principal amount of proprietary reverse
mortgages sold during the year that were originated by the bank.
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RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Schedule RC-C, Part II. Loans to Small Businesses and Small Farms
General Instructions
Schedule RC-C, Part II, is to be completed semiannually in the June and December reports only.
Schedule RC-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 with original amounts of $1 million or less that have been reported as “Loans secured by
nonfarm nonresidential properties” in Schedule RC-C, Part I, items 1.e.(1) and 1.e.(2), and
(2) Loans with original amounts of $1 million or less that have been reported in Schedule RC-C, Part I,
item 4, "Commercial and industrial loans."
For purposes of this schedule, "loans to small farms" consist of the following:
(1) Loans with original amounts of $500,000 or less that have been reported in Schedule RC-C, Part I,
item 1.b, "Loans secured by farmland (including farm residential and other improvements)", and
(2) Loans with original amounts of $500,000 or less that have been reported in Schedule RC-C, Part I,
item 3, "Loans to finance agricultural production and other loans to farmers".
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 RC-C, Part I, item 1.b, 1.e.(1), 1.e.(2), 3, or 4.
Except as noted below for "corporate" or "business" credit card programs, when determining "original
amounts" and reporting the number and amount currently outstanding for a category of loans in this
Part II, multiple loans to one borrower should be combined and reported on an aggregate basis rather
than as separate individual loans to the extent that the loan systems in which the bank'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 bank that offers "corporate" or "business" credit card programs under which credit cards are issued to
one or more of a company's employees for business-related use should treat each company's program
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Part II. (cont.)
General Instructions (cont.)
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 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 bank's credit card records, the bank should develop
reasonable estimates of the number of "corporate" or "business" credit card programs in existence as of
the 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
Loans to Small Businesses
Item No.
1
Caption and Instructions
Indicate in the appropriate box at the right whether all or substantially all of the dollar
volume of your bank's "Loans secured by nonfarm nonresidential properties" reported
in Schedule RC-C, Part I, items 1.e.(1) and 1.e.(2), and all or substantially all of the
dollar volume of your bank's "Commercial and industrial loans” reported in
Schedule RC-C, Part I, item 4, have original amounts of $100,000 or less.
If: (a) the average size of the amount currently outstanding for your bank's "Loans secured
by nonfarm nonresidential properties" as reported in Schedule RC-C, Part I,
items 1.e.(1) and 1.e.(2), above, is $100,000 or less, and
(b) the average size of the amount currently outstanding for your bank's "Commercial
and industrial loans” as reported in Schedule RC-C, Part I, item 4, above, is $100,000
or less, and
(c) your lending officers' knowledge of your bank's loans or other relevant information
pertaining to "Loans secured by nonfarm nonresidential properties" and "Commercial
and industrial loans” indicates that all or substantially all of the dollar volume of your
bank's loans in each of these two categories has "original amounts" (as described
above in the General Instructions to this Part II) of $100,000 or less,
place an "X" in the box marked "YES," complete items 2.a and 2.b below, skip items 3 and 4,
and go to item 5.
If your bank has no loans outstanding in both of these two loan categories, place an "X" in the
box marked "NO," skip items 2 through 4, and go to item 5.
Otherwise, place an "X" in the box marked "NO," skip items 2.a and 2.b, complete items 3
and 4 below, and go to item 5.
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Part II. (cont.)
Item No.
Caption and Instructions
2
Report the total number of loans currently outstanding for each of the following
Schedule RC-C, Part I, loan categories. 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 bank'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.
2.a
Number of "Loans secured by nonfarm nonresidential properties" reported in
Schedule RC-C, Part I, items 1.e(1) and 1.e.(2). Count the number of individual loans
currently outstanding whose carrying values add up to the amount of “Loans secured by
nonfarm nonresidential properties” reported in Schedule RC-C, Part I, items 1.e.(1) and
1.e.(2). The sum of the amounts reported in Schedule RC-C, Part I, items 1.e.(1) and 1.e.(2),
divided by the number of loans reported in this item should not exceed $100,000.
2.b
Number of "Commercial and industrial loans” reported in Schedule RC-C, Part I, item 4.
Count the number of individual loans currently outstanding whose carrying values add up to
the amount reported in Schedule RC-C, Part I, item 4.
The amount reported in Schedule RC-C, Part I, item 4, divided by the number of loans
reported in this item should not exceed $100,000.
3
Number and amount currently outstanding of "Loans secured by nonfarm
nonresidential properties" reported in Schedule RC-C, Part I, items 1.e.(1) and 1.e.(2).
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 bank'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 the sum of the amounts reported in Schedule RC-C, Part I,
items 1.e.(1) and 1.e.(2).
3.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" with "original amounts" of
$100,000 or less and report this total amount in column B. Do not add up the "original
amounts" of each of these loans and report the total original amount in column B.
Count the number of individual "Loans secured by nonfarm nonresidential properties" whose
carrying values were included in the amount reported in column B for this item (i.e., those
"Loans secured by nonfarm nonresidential properties" with "original amounts" of $100,000 or
less). Report this number in column A.
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Part II. (cont.)
Item No.
3.b
Caption and Instructions
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" 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" with "original amounts" of more than
$100,000 through $250,000). Report this number in column A.
3.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" 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" whose
carrying values were included in the amount reported in column B for this item (i.e., those
"Loans secured by nonfarm nonresidential properties" with "original amounts" of more than
$250,000 through $1,000,000). Report this number in column A.
4
Number and amount currently outstanding of "Commercial and industrial loans
reported in Schedule RC-C, Part I, item 4. See the General Instructions to this Part II for
the guidelines for determining the "original amount" of a loan and for the treatment of
"corporate" or "business" credit card programs. 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 bank'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 the amount reported in Schedule RC-C, Part I, item 4.
4.a
With original amounts of $100,000 or less. Add up the total carrying value of all currently
outstanding “Commercial and industrial loans” 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” (in domestic offices) whose
carrying values were included in the amount reported in column B for this item (i.e., those
“Commercial and industrial loans” with "original amounts" of $100,000 or less). Report this
number in column A.
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Part II. (cont.)
Item No.
4.b
Caption and Instructions
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”) with "original amounts"
of more than $100,000 through $250,000 and report this total amount in column B. Do not
add up the "original amounts" of each of these loans and report the total original amount in
column B.
Count the number of individual “Commercial and industrial loans” whose carrying values were
included in the amount reported in column B for this item (i.e., those “Commercial and
industrial loans” with "original amounts" of more than $100,000 through $250,000). Report
this number in column A.
4.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” 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" whose carrying values were
included in the amount reported in column B for this item (i.e., those “Commercial and
industrial loans” with "original amounts" of more than $250,000 through $1,000,000). Report
this number in column A.
Agricultural Loans to Small Farms
Item No.
5
Caption and Instructions
Indicate in the appropriate box at the right whether all or substantially all of the dollar
volume of your bank's "Loans secured by farmland (including farm residential and
other improvements)" reported in Schedule RC-C, Part I, item 1.b, and all or
substantially all of the dollar volume of your bank's "Loans to finance agricultural
production and other loans to farmers" reported in Schedule RC-C, Part I, item 3, have
original amounts of $100,000 or less.
If: (a) the average size of the amount currently outstanding for your bank's "Loans secured
by farmland (including farm residential and other improvements)" as reported in
Schedule RC-C, Part I, item 1.b, above, is $100,000 or less, and
(b) the average size of the amount currently outstanding for your bank's "Loans to
finance agricultural production and other loans to farmers" as reported in
Schedule RC-C, Part I, item 3, above, is $100,000 or less, and
(c) your lending officers' knowledge of your bank's loans or other relevant information
pertaining to "Loans secured by farmland (including farm residential and other
improvements" and your "Loans to finance agricultural production and other loans to
farmers" indicates that all or substantially all of the dollar volume of your bank's loans
in each of these two categories has "original amounts" (as described above in the
General Instructions to this Part II) of $100,000 or less,
place an "X" in the box marked "YES," complete items 6.a and 6.b below, and do not
complete items 7 and 8 below.
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Part II. (cont.)
Item No.
Caption and Instructions
5
(cont.)
If your bank has no loans outstanding in both of these two loan categories, place an "X" in the
box marked "NO," and do not complete items 6 through 8.
Otherwise, place an "X" in the box marked "NO," skip items 6.a and 6.b, and complete
items 7 and 8 below.
6
Report the total number of loans currently outstanding for each of the following
Schedule RC-C, Part I, loan categories. 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 bank'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.
6.a
Number of "Loans secured by farmland (including farm residential and other
improvements)" reported in Schedule RC-C, Part I, item 1.b. Count the number of
individual loans currently outstanding whose carrying values add up to the amount reported in
Schedule RC-C, Part I, item 1.b, "Loans secured by farmland (including farm residential and
other improvements)." The amount reported in Schedule RC-C, Part I, item 1.b, divided by
the number of loans reported in this item should not exceed $100,000.
6.b
Number of "Loans to finance agricultural production and other loans to farmers"
reported in Schedule RC-C, Part I, item 3. Count the number of individual loans currently
outstanding whose carrying values add up to the amount reported in Schedule RC-C, Part I,
item 3, "Loans to finance agricultural production and other loans to farmers." The amount
reported in Schedule RC-C, Part I, item 3, divided by the number of loans reported in this item
should not exceed $100,000.
7
Number and amount currently outstanding of "Loans secured by farmland
(including farm residential and other improvements)" reported in Schedule RC-C,
Part I, item 1.b. 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 bank'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 7.a through 7.c, column B,
must be less than or equal to the amount reported Schedule RC-C, Part I, item 1.b.
7.a
FFIEC 051
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)"
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.
RC-C-46
(3-17)
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FFIEC 051
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Part II. (cont.)
Item No.
Caption and Instructions
7.a
(cont.)
Count the number of individual "Loans secured by farmland (including farm residential and
other improvements" 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)" with "original amounts" of $100,000 or less). Report this number in
column A.
7.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" 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)" 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)" with "original amounts" of more than $100,000 through $250,000).
Report this number in column A.
7.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)" 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)" 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)" with "original amounts" of more than $250,000 through $500,000).
Report this number in column A.
8
Number and amount currently outstanding of "Loans to finance agricultural production
and other loans to farmers" reported in Schedule RC-C, Part I, item 3. 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 bank'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 8.a through 8.c, column B,
must be less than or equal to the amount reported in Schedule RC-C, Part I, item 3.
8.a
FFIEC 051
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" 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.
RC-C-47
(3-17)
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
FFIEC 051
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Part II. (cont.)
Item No.
Caption and Instructions
8.a
(cont.)
Count the number of individual "Loans to finance agricultural production and other loans to
farmers" 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" with
"original amounts" of $100,000 or less). Report this number in column A.
8.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" 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" 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" with
"original amounts" of more than $100,000 through $250,000). Report this number in
column A.
8.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" 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 to finance agricultural production and other loans to
farmers" 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" with
"original amounts" of more than $250,000 through $500,000). Report this number in
column A.
FFIEC 051
RC-C-48
(3-17)
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
FFIEC 051
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Examples of Reporting in Schedule RC-C, Part II
(1)
A bank has a "Loan secured by owner-occupied nonfarm nonresidential property" which has a
carrying value on the report date of $70,000 and this amount is included in Schedule RC-C, Part I,
item 1.e.(1). The bank 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 RC-C, Part II.
Because the original amount of the loan is $100,000 or less, the bank would report the $70,000
amount currently outstanding in Part II, item 3.a, column B.
(2)
The bank has a second "Loan secured by owner-occupied nonfarm nonresidential property" which
has a carrying value on the report date of $60,000 and this amount is included in Schedule RC-C,
Part I, item 1.e.(1). The bank 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 RC-C, Part II.
Because the original amount of the loan falls within the more than $100,000 through $250,000
range, the bank would report the $60,000 amount currently outstanding in Part II, item 3.b,
column B.
(3)
The bank has a "Commercial and industrial loan" which has a carrying value on the report date of
$200,000 and this amount is included in Schedule RC-C, Part I, item 4. The bank 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 RC-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
bank would report the $200,000 amount currently outstanding in Part II, item 4.b, column B.
(4)
The bank has a second "Commercial and industrial loan" which has a carrying value on the report
date of $90,000 and this amount is included in Schedule RC-C, Part I, item 4. The bank 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 bank, the loan would be considered a "loan to a small business" and would be reported in
Schedule RC-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 bank would report the $90,000 amount
currently outstanding in Part II, item 4.c, column B.
(5)
The bank has a third "Commercial and industrial loan" which has a carrying value on the report date
of $55,000 and this amount is included in Schedule RC-C, Part I, item 4. This loan represents a
participation purchased by the bank from another lender. The original amount of the entire credit is
$750,000 and the bank'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 RC-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
bank would report the $55,000 amount currently outstanding in Part II, item 4.c, column B.
(6)
The bank has another "Commercial and industrial loan" and it has a carrying value on the report
date of $120,000. This amount is included in Schedule RC-C, Part I, item 4. This loan represents a
participation purchased by the bank from another lender. The original amount of the entire credit is
$1,250,000 and the bank's original share of this credit was $250,000. Because the original amount
of the entire credit exceeds $1,000,000, the loan would not be considered a "loan to a small
business" and would not be reported in Schedule RC-C, Part II.
(7)
The bank has a "Loan secured by other nonfarm nonresidential property" and a "Commercial and
industrial loan" to the same borrower. The first loan has a carrying value on the report date of
$375,000 and this amount is included in Schedule RC-C, Part I, item 1.e.(2). 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 report date of $650,000 and this amount is included in Schedule RC-C,
Part I, item 4. This "Commercial and industrial loan" was made in the original amount of $750,000.
FFIEC 051
RC-C-49
(3-17)
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
FFIEC 051
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Examples of Reporting in Schedule RC-C, Part II (cont.)
Case I: The bank'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 RC-C, Part II.
Case II: The bank'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 RC-C, Part II. Based on its $400,000 original amount, the "Loan
secured by other nonfarm nonresidential property" would be considered a "loan to a small business"
and would be reported in Schedule RC-C, Part II. Because the original amount of the loan falls
within the more than $250,000 through $1,000,000 range, the bank would report the $375,000
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. Since the "Commercial and industrial loan" 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 RC-C, Part II. Because the original amount of this
loan falls within the more than $250,000 through $1,000,000 range, the bank would report the
$650,000 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.
(8)
The bank has a "Loan secured by farmland (including farm residential and other improvements)"
which has a carrying value on the report date of $225,000. The bank 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 bank has a second "Loan secured by farmland" 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 RC-C,
Part I, item 1.b.
Case I: The bank'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 RC-C, Part II. Because the original
amount of the two combined loans falls within the more than $250,000 through $500,000 range, the
bank would report the $275,000 combined total of the amounts currently outstanding for the two
loans in Part II, item 7.c, column B, and count these two loans to the same borrower as one loan for
purposes of Part II, item 7.c, column A.
Case II: The bank'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 RC-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 RC-C, Part II.
Because the original amount of the loan falls within the more than $250,000 through $500,000
range, the bank would report the $225,000 amount currently outstanding in Part II, item 7.c,
column B, and count this loan as one loan for purposes of Part II, item 7.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 RC-C, Part II. Because the
original amount of this loan is less than $100,000, the bank would report the $50,000 amount
currently outstanding in Part II, item 7.a, column B, and count this loan as one loan for purposes of
Part II, item 7.a, column A.
FFIEC 051
RC-C-50
(3-17)
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
FFIEC 051
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
Examples of Reporting in Schedule RC-C, Part II (cont.)
(9)
The bank has one final "Loan secured by farmland" which has a carrying value on the report date of
$5,000 and this amount is included in Schedule RC-C, Part I, item 1.b. The bank 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 RC-C, Part II. Because the original amount of the loan falls within
the more than $250,000 through $500,000 range, the bank would report the $5,000 amount currently
outstanding in Part II, item 7.c, column B.
(10) The bank 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 on the report date are the same as their original
amounts and these amounts are included in Schedule RC-C, Part I, item 3. 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 bank's loan system can provide aggregate individual borrower data for multiple
advances under lines of credit without undue cost to the reporting institution. Thus, even though a
separate note was signed each time the farmer borrowed under the line of credit, the loan system
combines all information about the farmer's separate borrowings under the line of credit. Therefore,
the loan system indicates that the farmer has a line of credit for $150,000 and that the amount
currently outstanding under the line of credit for the combined carrying values of the two borrowings
under the line of credit is $80,000. Because the line of credit was most recently approved for
$150,000, this $150,000 original amount for the line of credit would be considered a "loan to a small
farm" that would be reported in Schedule RC-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 bank would report the
$80,000 combined total of the amounts currently outstanding for the two notes in Part II, item 8.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 8.b, column A.
Case II: The bank'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 RC-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 RC-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 bank would report both the
$30,000 and $50,000 amounts currently outstanding in Part II, item 8.b, column B, and count these
as two loans for purposes of Part II, item 8.b, column A.
(11) The bank has one other "Loan to finance agricultural production and other loans to a farmer" which
has a carrying value on the report date of $75,000 and this amount is included in Schedule RC-C,
Part I, item 3. The bank made this loan to the borrower in the original amount of $100,000, so it
would be considered a "loan to a small farm" and would be reported in Schedule RC-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 bank would report the $75,000 amount currently outstanding in Part II, item 8.a,
column B.
FFIEC 051
RC-C-51
(3-17)
RC-C - SMALL BUSINESS AND SMALL FARM LOANS
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FFIEC 051
RC-E - DEPOSITS
SCHEDULE RC-E – DEPOSIT LIABILITIES
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)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Federal Deposit Insurance Act definition of deposits;
transaction accounts;
demand deposits;
NOW accounts;
ATS accounts;
telephone or preauthorized transfer accounts;
nontransaction accounts;
savings deposits;
money market deposit accounts;
other savings deposits;
time deposits;
time certificates of deposit;
time deposits, open account;
interest-bearing deposit accounts; and
noninterest-bearing deposit accounts.
Additional discussions pertaining to deposits will also be found under separate Glossary entries for:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
brokered deposits;
cash management arrangements;
dealer reserve accounts;
hypothecated deposits;
letter of credit (for letters of credit sold for cash and travelers letters of credit);
overdraft;
pass-through reserve balances; and
reciprocal balances.
NOTE: For information about the reporting of deposits for deposit insurance assessment purposes, refer
to Schedule RC-O.
NOTE: For the appropriate treatment of deposits of depository institutions for which the reporting bank is
serving as a pass-through agent for balances maintained to satisfy reserve balance requirements,
see the Glossary entry for "pass-through reserve balances."
NOTE: For banks that elect to report deposits at fair value under a fair value option, report the fair value
of those deposits in the same items and columns as similar deposits to which a fair value option
has not been applied. Currently, deposits that include a demand feature (e.g., demand and
savings deposits) are not eligible to be reported under a fair value election.
FFIEC 051
RC-E-1
(9-19)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
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 bank and other depository institutions may be reported on a
net basis in accordance with generally accepted accounting principles.
The following are not reported as deposits in Schedule RC-E:
(1) Deposits received in one office of the bank for deposit in another office of the bank.
(2) Outstanding drafts (including advices or authorizations to charge the bank's balance in another
depository institution) drawn in the regular course of business by the reporting bank on other
depository institutions.
(3) Trust funds held in the bank's own trust department that the bank keeps segregated and apart
from its general assets and does not use in the conduct of its business. NOTE: Such uninvested
trust funds must be reported as deposit liabilities in Schedule RC-O, item 1.
(4) Deposits accumulated for the payment of personal loans (i.e., hypothecated deposits), which should
be netted against loans in Schedule RC-C, Loans and Lease Financing Receivables.
(5) All obligations arising from assets sold under agreements to repurchase.
(6) Overdrafts in deposit accounts. Overdrafts are to be reported as loans in Schedule RC-C and not as
negative deposits. Overdrafts in one or more transaction accounts within a group of related
transaction accounts of a single type (i.e., demand deposit accounts or NOW accounts, but not a
combination thereof) maintained in the same right and capacity by a customer (a single legal entity)
that are established under a bona fide cash management arrangement by this customer are not to be
classified as loans unless there is a net overdraft position in the group of related transaction accounts
taken as a whole. For reporting and deposit insurance assessment purposes, such accounts function
as, and are regarded as, one account rather than multiple separate accounts. (NOTE: Affiliates and
subsidiaries are considered separate legal entities.) See the Glossary entry for "cash management
arrangements" for information on bona fide cash management arrangements.
(7) Time deposits sold (issued) by the reporting bank that it has subsequently purchased in the
secondary market (typically as a result of the bank's trading activities) and has not resold as of the
report date. For purposes of these reports, a bank 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
bank has cancelled a liability as opposed to having acquired an asset for its portfolio.
(8) Cash payments received in connection with transfers of the reporting institution’s other real estate
owned that have been financed by the institution and do not qualify for sale accounting, which
applicable accounting standards describe as a “liability,” a “deposit,” or a “deposit liability.” Until a
transfer qualifies for sale accounting, these cash payments shall be reported in Schedule RC-G,
item 4, “All other liabilities.” See the Glossary entry for “foreclosed assets” for further information.
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 bank other than the trust department.
(2) Credit items that could not be posted to the individual deposit accounts but that have been credited to
the control accounts of the various deposit categories on the general ledger.
FFIEC 051
RC-E-2
(9-19)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
Definitions (cont.)
(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: Regardless of whether deposits carried in suspense
accounts have been reclassified as deposits and reported in Schedule RC-E, they must be reported
as deposit liabilities in Schedule RC-O, items 1 and 4.
(4)
Escrow funds.
(5)
Payments collected by the bank on loans secured by real estate and other loans serviced for others
that have not yet been remitted to the owners of the loans.
(6)
Credit balances resulting from customers' overpayments of account balances on credit cards and
other revolving credit plans.
(7)
Funds received or held in connection with checks or drafts drawn by the reporting bank 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 bank 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 bank, until the proceeds of the sale are remitted to another party, and funds
received or held in connection with other such checks used (but not drawn) by the reporting bank,
until the amount of the checks is remitted to another party.
(9)
Checks drawn by the reporting bank 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 bank prior to loan closing.
(11) Refundable stock subscription payments received or held by the reporting bank prior to the issuance
of the stock. (Report nonrefundable stock subscription payments in Schedule RC-G, item 4, "All
other liabilities.”)
(12) Improperly executed repurchase agreement sweep accounts (repo sweeps). According to
Section 360.8 of the FDIC’s regulations, an “internal sweep account” is “an account held pursuant
to a contract between an insured depository institution and its customer involving the pre-arranged,
automated transfer of funds from a deposit account to . . . another account or investment vehicle
located within the depository institution.” When a repo sweep from a deposit account is improperly
executed by an institution, the customer obtains neither an ownership interest in identified assets
subject to a repurchase agreement nor a perfected security interest in the applicable assets. In this
situation, the institution should report the swept funds as deposit liabilities, not as repurchase
agreements.
(13) The unpaid balance of money received or held by the reporting institution that the reporting
institution promises to pay pursuant to an instruction received through the use of a card, or other
payment code or access device, issued on a prepaid or prefunded basis.
In addition, the gross amount of debit items ("throw-outs," "bookkeepers' cutbacks," or "rejects") that
cannot be posted to the individual deposit accounts without creating overdrafts or for some other reason
(e.g., stop payment, missing endorsement, post or stale date, or account closed), but which have been
FFIEC 051
RC-E-3
(3-17)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
Definitions (cont.)
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 RC-F, item 6,
"All 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 designated as "transaction accounts." The distinction between
transaction and nontransaction accounts is discussed in detail in the Glossary entry for "deposits.”
NOTE: 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.)
A. 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.
B. 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.
FFIEC 051
RC-E-4
(3-17)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
Summary of Transaction Account Classifications (cont.)
C. 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 (including MMDAs)" (column C).
Column A - Total transaction accounts. Report in column A the total of all transaction accounts as
summarized above and fully defined in the Glossary entry for "deposits." With the exceptions noted in the
item instructions and the Glossary entry, 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 third party 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. Report in item 7, column B, the total of 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.")
NOTE: Demand deposits are, of course, one type of transaction account. Therefore, the amount
reported in item 7, column B, should be included by category of depositor in the breakdown of transaction
accounts by category of depositor that is reported in column A.
Column C - Total nontransaction accounts (including MMDAs). 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.
FFIEC 051
RC-E-5
(3-17)
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RC-E - DEPOSITS
Item Instructions
In items 1 through 6 of Schedule RC-E, banks 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,” “States and
political subdivisions in the U.S.,” or “Commercial banks and other depository institutions in the U.S.” based
on the beneficial owners of the funds that the broker has placed in the bank. However, if this information is
not readily available to the issuing bank 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 bank issuing the deposits, these brokered deposits
may be rebuttably presumed to be deposits of “Individuals, partnerships, and corporations” and reported
in Schedule RC-E, item 1, below. For further information, see the Glossary entry for "brokered deposits."
Item No.
1
Caption and Instructions
Deposits of individuals, partnerships, and corporations (include all certified and official
checks). Report in the appropriate column all deposits of individuals, partnerships, and
corporations, wherever located, and all certified and official checks.
Include in this item:
(1) Deposits related to the personal, household, or family activities of both farm and nonfarm
individuals and to the business activities of sole proprietorships.
(2) Deposits of corporations and organizations (other than depository institutions), regardless
of whether 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 bank 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 Schedule RC-E,
item 2).
(3) Dealer reserve accounts (see the Glossary entry for "dealer reserve accounts" for the
definition of this term).
(4) Deposits of U.S. Government agencies and instrumentalities such as the:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
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Banks for Cooperatives,
Export-Import Bank of the U.S.,
Federal Deposit Insurance Corporation,
Federal Financing Bank,
Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation,
Federal Intermediate Credit Banks,
Federal Land Banks,
Federal National Mortgage Association,
National Credit Union Administration Central Liquidity Facility, and
National Credit Union Share Insurance Fund.
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Item No.
Caption and Instructions
1
(cont.)
(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 bank if the
beneficiary is an individual, partnership, or corporation.
(6) Credit balances on credit cards and other revolving credit plans as a result of customer
overpayments.
(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) Deposits of a pension fund held for the benefit of individuals.
(9) Certified and official checks, which include the following:
(a) Unpaid depositors' checks that have been certified.
(b) Cashiers' checks, money orders, and other officers' checks issued for any purpose
including those issued in payment for services, dividends, or purchases that are
drawn on the reporting bank by any of its duly authorized officers and that are
outstanding on the report date.
(c) Funds received or held in connection with checks or drafts drawn by the reporting
bank 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 bank only when it has been advised that
the checks or drafts have been presented).
(d) Funds received or held in connection with traveler's checks and money orders sold
(but not drawn) by the reporting bank, until the proceeds of the sale are remitted to
another party, and funds received or held in connection with other such checks used
(but not drawn) by the reporting bank, until the amount of the checks is remitted to
another party.
(e) Checks drawn by the reporting bank on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.
(f) Outstanding travelers' checks, travelers' letters of credit and other letters of credit
(less any outstanding drafts accepted thereunder) sold for cash or its equivalent by
the reporting bank or its agents.
(g) Outstanding drafts and bills of exchange accepted by the reporting bank or its agents
for money or its equivalent, including drafts accepted against a letter of credit issued
for money or its equivalent.
Exclude from this item deposits of:
(1) The U.S. Government (report in Schedule RC-E, item 2).
(2) States and political subdivisions in the U.S. (report in Schedule RC-E, item 3).
(3) Commercial banks in the U.S. (report in Schedule RC-E, item 4).
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RC-E - DEPOSITS
Item No.
Caption and Instructions
1
(cont.)
(4) Other depository institutions in the U.S. (report in Schedule RC-E, item 4).
(5) Banks in foreign countries (report in Schedule RC-E, item 5).
2
Deposits of U.S. Government. Report in the appropriate column all deposits of federal
public funds made by or for the account of the United States or some department, bureau, or
official thereof.
Include in this item:
(1) Deposits of the U.S. Treasury.
(2) Deposits standing to the credit of certain quasi-governmental institutions when the
reporting bank has been designated by the U.S. Treasury as a depository for such funds.
(3) 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 Schedule RC-E, item 1, above.)
3
Deposits of states and political subdivisions in the U.S. Report in the appropriate
column all deposits standing to the credit of states, counties, municipalities, and local housing
authorities; school, irrigation, drainage, and reclamation districts; other instrumentalities of
one or more states of the United States, the District of Columbia, Puerto Rico, and U.S.
territories and possessions; and Indian tribes 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.
4
Deposits of commercial banks and other depository institutions in the U.S. Report in
the appropriate column all deposits of commercial banks and other depository institutions
located in the U.S.
Commercial banks in the U.S. cover:
(1) U.S. branches and agencies of foreign banks; and
(2) all other commercial banks in the U.S., i.e., U.S. branches of U.S. banks.
Other depository institutions in the U.S. cover:
(1) Building or savings and loan associations, homestead associations, and cooperative
banks;
(2) credit unions; and
(3) mutual and stock savings banks.
For purposes of these reports, U.S. branches and agencies of foreign banks include U.S.
branches and agencies of foreign official banking institutions and investment companies that
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Item No.
Caption and Instructions
4
(cont.)
are chartered under Article XII of the New York State banking law and that are majority-owned
by one or more foreign banks.
For the appropriate treatment of deposits of depository institutions for which the reporting
bank is serving as a pass-through correspondent for balances maintained to satisfy reserve
balance requirements, see the Glossary entry for "pass-through reserve balances." For the
appropriate treatment of deposits of depository institutions for which the reporting bank is
acting as an agent for an excess balance account at a Federal Reserve Bank, see the
Glossary entry for “excess balance account.”
Refer to the Glossary entries for "banks, U.S. and foreign" and "depository institutions in the
U.S." for further discussion of these terms.
Exclude from this item deposits of banks in foreign countries (report in Schedule RC-E,
item 5, below). (See the Glossary entry for "banks, U.S. and foreign" for the definition of
this term.)
5
Deposits of banks in foreign countries. Report in the appropriate column all deposits of
banks located in foreign countries.
Banks in foreign countries cover:
(1) foreign-domiciled branches of other U.S. banks; and
(2) foreign-domiciled branches of foreign banks.
See the Glossary entry for "banks, U.S. and foreign" for further discussion of these terms.
Exclude from this item deposits of foreign official institutions and foreign central banks (to be
reported in Schedule RC-E, item 6 below) and deposits of U.S. branches and agencies of
foreign banks and New York State investment companies (to be reported in Schedule RC-E,
item 4 above).
For the appropriate treatment of deposits of depository institutions for which the reporting
bank is serving as a pass-through agent for balances maintained to satisfy reserve balance
requirements, see the Glossary entry for "pass-through reserve balances."
6
Deposits of foreign governments and official institutions. Report in the appropriate
column all deposits of foreign governments and official institutions. (See the Glossary entry
for "foreign governments and official institutions" for the definition of this term.)
Exclude from this item deposits of:
(1) U.S. branches and agencies of foreign official banking institutions (report in
Schedule RC-E, item 4, 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 Schedule RC-E, item 5, above).
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Item No.
Caption and Instructions
6
(cont.)
(3) Foreign government-owned nonbank commercial and industrial enterprises (report in
Schedule RC-E, item 1, above).
7
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Total. Report in column B the total of all demand deposits. Report in columns A and C the
sum of items 1 through 6. The sum of columns A and C of this item must equal
Schedule RC, item 13.a, "Deposits in domestic offices."
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RC-E - DEPOSITS
Memoranda
Item No.
1
Caption and Instructions
Selected components of total deposits. The amounts to be reported in Memorandum
items 1.a through 1.g below are included as components of total deposits (Schedule RC-E,
sum of item 7, columns A and C).
NOTE: Schedule RC-E, Memorandum item 1.a, is to be completed semiannually in the June and
December reports only.
1.a
Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts. Report in this
Memorandum item the total of all IRA and Keogh Plan deposits included in total deposits
(Schedule RC-E, sum of item 7, columns A and C). 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).
1.b
Total brokered deposits. Report in this Memorandum item the total of all brokered deposits
included in total deposits (Schedule RC-E, sum of item 7, columns A and C), regardless of
size or type of deposit instrument. (See the Glossary entry for "brokered deposits" for the
definition of this term.)
Brokered deposits include “brokered reciprocal deposits.” As defined in Section 327.8(q) of
the FDIC’s regulations, “brokered reciprocal deposits” are “reciprocal deposits as defined in
Section 337.6(e)(2)(v) of the FDIC’s regulations that are not excepted from an institution’s
brokered deposits pursuant to Section 337.6(e)” of the FDIC’s regulations.
Limited Exception for Reciprocal Deposits
Pursuant to Section 337.6(e) of the FDIC’s regulations, and consistent with Section 202 of
the Economic Growth, Regulatory Relief, and Consumer Protection Act, an “agent institution”
can except reciprocal deposits from being classified (and reported in this Memorandum
item 1.b) as brokered deposits up to its applicable statutory caps, described below.
Definitions that apply to the limited exception for reciprocal deposits:
•
•
•
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“Agent institution” means an insured depository institution that places a covered deposit
through a deposit placement network at other insured depository institutions in amounts
that are less than or equal to the standard maximum deposit insurance amount,
specifying the interest rate to be paid for such amounts, if the insured depository
institution:
o When most recently examined under section 10(d) of the Federal Deposit Insurance
Act (12 U.S.C. 1820(d)) was found to have a composite condition of outstanding or
good, and is well capitalized;
o Has obtained a waiver pursuant to Section 337.6(c) of the FDIC’s regulations; or
o Does not receive an amount of reciprocal deposits that causes the total amount of
reciprocal deposits held by the agent institution to be greater than its special cap,
described below.
“Covered deposit” means a deposit that (i) is submitted for placement through a deposit
placement network by the agent institution; and (ii) does not consist of funds that were
obtained for the agent institution, directly or indirectly, by or through a deposit broker
before submission for placement through a deposit placement network.
“Deposit placement network” means a network in which an insured depository institution
participates, together with other insured depository institutions, for the processing and
receipt of reciprocal deposits.
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RC-E - DEPOSITS
Memoranda
Item No.
Caption and Instructions
1.b
(cont.)
•
•
“Network member bank” means an insured depository institution that is a member of a
deposit placement network.
“Reciprocal deposits” means deposits received by an agent institution through a deposit
placement network with the same maturity (if any) and in the same aggregate amount as
covered deposits placed by the agent institution in other network member banks.
All reciprocal deposits, whether they are brokered reciprocal deposits or not, should be
reported in Schedule RC-E, Memorandum item 1.g, below.
Deposits placed and received through a “deposit placement network” that are not “covered
deposits” under Section 337.6(b)(2)(ii)(e)(2)(ii) of the FDIC’s regulations must be reported as
brokered deposits in this Memorandum item 1.b.
General Cap
Under the general cap, an agent institution may except reciprocal deposits from treatment as
brokered deposits up to the lesser of $5 billion or an amount equal to 20 percent of the agent
institution’s total liabilities. An agent institution that holds reciprocal deposits in excess of the
general cap should report such excess deposits as brokered deposits in this Memorandum
item 1.b (and as brokered reciprocal deposits in Schedule RC-O, item 9, and, if applicable,
item 9.a), and include such excess deposits as part of its total reciprocal deposits in
Schedule RC-E, Memorandum item 1.g,
Special Cap
A special cap applies if the institution is either not well rated or not well capitalized.1 The
special cap is defined as:
“the average amount of reciprocal deposits held by the agent institution on the last day of
each of the 4 calendar quarters preceding the calendar quarter in which the agent
institution was found not to have a composite condition of outstanding or good or was
determined to be not well capitalized.”
In no event, however, can an institution’s non-brokered reciprocal deposits exceed the
general cap.
An institution that is not well rated or not well capitalized may qualify as an “agent institution”
if:
(1) The amount of reciprocal deposits that the institution holds as of the first reporting period
of being subject to the special cap is below or equal to the special cap and, in any
reporting period that it remains subject to the special cap, it does not subsequently
receive reciprocal deposits that cause the total amount of reciprocal deposits to exceed
the special cap; OR
(2) The amount of reciprocal deposits that it holds as of the first quarter of being subject to
the special cap is above the special cap, if such deposits were received before the
institution became subject to the special cap and, in any reporting period that it remains
1
See generally, 12 CFR Part 324, Subpart H (FDIC); 12 CFR Part 208, Subpart D (Federal Reserve Board); 12 CFR
Part 6 (OCC). 12 U.S.C. 1831o. ‘‘Well capitalized’’ is defined in 12 CFR 337.6(a)(3)(i).
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Memoranda
Item No.
1.b
(cont.)
Caption and Instructions
subject to the special cap, it does not subsequently receive reciprocal deposits that cause
the total amount of reciprocal deposits to exceed the special cap and the institution
satisfies all other qualifications necessary to be an agent institution.
If an institution, subject to the special cap, receives reciprocal deposits that cause its total
reciprocal deposits to be greater than the special cap, the institution will no longer meet the
definition of “agent institution” and all of its reciprocal deposits should be reported as
brokered deposits in this Memorandum item 1.b (and as brokered reciprocal deposits in
Schedule RC-O, item 9, and, if applicable, item 9.a) and as total reciprocal deposits in
Schedule RC-E, Memorandum item 1.g.
An institution shall consider the effective date of a CAMELS composite rating to be the date
of written notification to the institution by its primary federal regulator, or state authority, of its
supervisory rating.
An institution that is not well capitalized or that has composite supervisory rating of other than
outstanding (CAMELS “1”) or good (CAMELS “2”) as of the quarter-end date of the Call
Report for which the institution is filing shall calculate the special cap by:
(1) Determining the most recent calendar quarter in which the institution was both well
capitalized and had a composite CAMELS rating of “1” or “2” at quarter-end.
(2) Calculating the average of the total amount of reciprocal deposits held by the institution
on the last day of the calendar quarter determined above (in the preceding step) and on
each of the three preceding calendar quarters.
To illustrate how an institution should calculate the special cap, consider the examples after
the instructions to Schedule RC-E, Memorandum item 7.
1.c
Brokered deposits of $250,000 or less (fully insured brokered deposits). Report in this
item all fully insured brokered deposits (as defined in the Glossary entry for "brokered
deposits") included in Schedule RC-E, Memorandum item 1.b, above. Include brokered
deposits with balances of $250,000 or less and time deposits issued to deposit brokers in the
form of certificates of deposit of more than $250,000 that have been participated out by the
broker in shares with balances of $250,000 or less.
In some cases, brokered certificates of deposit are issued in $1,000 amounts under a master
certificate of deposit issued by a bank to a deposit broker in an amount that exceeds
$250,000. For these so-called “retail brokered deposits,” multiple purchases by individual
depositors from an individual bank normally do not exceed the applicable deposit insurance
limit (currently $250,000), but under current deposit insurance rules the deposit broker is not
required to provide information routinely on these purchasers and their account ownership
capacity to the bank issuing the deposits. If this information is not readily available to the
issuing bank, these brokered certificates of deposit in $1,000 amounts may be rebuttably
presumed to be fully insured brokered deposits and should be reported in this item. In
addition, some brokered deposits are transaction accounts or money market deposit
accounts (MMDAs) that are denominated in amounts of $0.01 and established and
maintained by the deposit broker (or its agent) as agent, custodian, or other fiduciary for the
broker’s customers. An individual depositor’s deposits within the brokered transaction
account or MMDA normally do not exceed the applicable deposit insurance limit. As with
retail brokered deposits, if information on these depositors and their account ownership
capacity is not readily available to the bank establishing the transaction account or MMDA,
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Memoranda
Item No.
Caption and Instructions
1.c
(cont.)
the amounts in the transaction account or MMDA may be rebuttably presumed to be fully
insured brokered deposits and should be reported in this item.
The dollar amount used as the basis for reporting fully insured brokered deposits in this
Memorandum item reflects the deposit insurance limit in effect on the report date. At present,
this limit is $250,000.
1.d
Maturity data for brokered deposits. Report in the appropriate subitem the indicated
maturity data for brokered deposits (as defined in the Glossary entry for "brokered deposits")
included in Schedule RC-E, Memorandum item 1.b, above.
1.d.(1)
Brokered deposits of $250,000 or less with a remaining maturity of one year or less.
Report in this item those brokered time deposits with balances of $250,000 or less reported in
Schedule RC-E, Memorandum item 1.c, above that have a remaining maturity of one year or
less. Remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of a brokered deposit. Also report in this item all brokered demand and
savings deposits with balances of $250,000 or less that were reported in Schedule RC-E,
Memorandum item 1.c, above.
1.d.(2)
Not applicable.
1.d.(3)
Brokered deposits of more than $250,000 with a remaining maturity of one year or less.
Report in this item those brokered time deposits with balances of more than $250,000
reported in Schedule RC-E, Memorandum item 1.b, above that have a remaining maturity of
one year or less. Remaining maturity is the amount of time remaining from the report date
until the final contractual maturity of a brokered deposit. Also report in this item all brokered
demand and savings deposits with balances of more than $250,000 that were reported in
Schedule RC-E, Memorandum item 1.b, above.
1.e
Preferred deposits. (This item is to be reported for the December 31 report only.)
Report in this item all deposits of states and political subdivisions in the U.S. included in
Schedule RC-E, item 3, columns A and C above, 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 the sum of Schedule RC-E, item 3, column A, and item 3, column C, above.
State law may require a bank to pledge securities (or other readily marketable assets) to
cover the uninsured portion of the deposits of a state or political subdivision. If the bank 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 $450,000 in deposits at a bank which, under state law, is required to pledge
securities to cover only the uninsured portion of such deposits ($200,000 in this example).
The bank has pledged securities with a value of $300,000 to secure these deposits. Only the
$200,000 uninsured amount of the political subdivision's $450,000 in deposits, given the
currently applicable $250,000 deposit insurance limit, would be considered "preferred
deposits."
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Memoranda
Item No.
Caption and Instructions
1.e
(cont.)
In other states, banks must participate in a state public deposits program in order to receive
deposits from the state or from political subdivisions within the state in amounts that would
not be covered by federal deposit insurance. Under state law in such states, the value of the
securities a bank must pledge to the state is calculated annually, but represents only a
percentage of the uninsured portion of its public deposits. Institutions participating in the
state program may potentially be required to share in any loss to public depositors incurred in
the failure of another participating institution. As long as the value of the securities pledged
to the state exceeds the calculated requirement, all of the bank's uninsured public deposits
are protected from loss under the operation of the state program if the bank fails and,
therefore, all of the uninsured public deposits are considered "preferred deposits." For
example, a bank participating in a state public deposits program has $1,600,000 in public
deposits under the program from four political subdivisions and $700,000 of this amount is
uninsured, given the currently applicable $250,000 deposit insurance limit. The bank's most
recent calculation indicates that it must pledge securities with a value of at least $77,000 to
the state in order to participate in the state program. The bank has pledged securities with an
actual value of $80,000. The bank should report the $700,000 in uninsured public deposits
as "preferred deposits."
1.f
Estimated amount of deposits obtained through the use of deposit listing services that
are not brokered deposits. Report in this Memorandum item the estimated amount of all
nonbrokered deposits obtained through the use of deposit listing services included in total
deposits (Schedule RC-E, sum of item 7, columns A and C), regardless of size or type of
deposit instrument.
The objective of this Memorandum item is not to capture all deposits obtained through the
Internet, such as deposits that a bank receives because a person or entity has seen the rates
the bank has posted on its own Web site or on a rate-advertising Web site that has picked up
and posted the bank’s rates on its site without the bank’s authorization. Rather, the objective
of this Memorandum item is to collect the estimated amount of deposits obtained as a result
of action taken by the bank to have its deposit rates listed by a listing service, and the listing
service is compensated for this listing either by the bank whose rates are being listed or by
the persons or entities who view the listed rates. A bank should establish a reasonable and
supportable estimation process for identifying listing service deposits that meet these
reporting parameters and apply this process consistently over time. However, for those
nonbrokered deposits acquired through the use of a deposit listing service that offers deposit
tracking, the actual amount of listing service deposits, rather than an estimate, should be
reported.
When a nonbrokered time deposit obtained through the use of a deposit listing service is
renewed or rolled over at maturity, the time deposit should continue to be reported in this item
as a listing service deposit if the reporting institution continues to have its time deposit rates
listed by a listing service and the listing service is compensated for this listing as described
above. In contrast, if the reporting institution no longer has its time deposit rates listed by a
listing service when a nonbrokered listing service time deposit matures and is renewed or
rolled over by the depositor, the time deposit would no longer need to be reported as a listing
service deposit after the renewal or rollover. The reporting institution should continue to
report nonbrokered listing service deposits other than time deposits in this item as long as the
reporting institution continues to have its deposit rates for the same type of deposit (e.g.,
NOW account, money market deposit account) listed by a listing service and the listing
service is compensated for this listing as described above.
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Memoranda
Item No.
Caption and Instructions
1.f
(cont.)
If the reporting institution has merged with or acquired another institution that had obtained
nonbrokered deposits through the use of deposit listing services, these deposits would
continue to be regarded as listing service deposits after the merger or acquisition. In this
situation, the reporting institution should determine whether it must continue to report these
deposits as listing service deposits after the merger or acquisition in accordance with the
guidance in the preceding paragraph.
Exclude from this item all brokered deposits reported in Schedule RC-E, Memorandum
item 1.b.
A deposit listing service is a company that compiles information about the interest rates
offered on deposits, such as certificates of deposit, by insured depository institutions. A
particular company could be a deposit listing service (compiling information about certificates
of deposits) as well as a deposit broker (facilitating the placement of certificates of deposit).
A deposit listing service is not a deposit broker if all of the following four criteria are met:
(1) The listing service is not involved in placing deposits. Any funds to be invested in deposit
accounts are remitted directly by the depositor to the insured depository institution and
not, directly or indirectly, by or through the listing service.
(2) The person or entity providing the listing service is compensated solely by means of
subscription fees (i.e., the fees paid by subscribers as payment for their opportunity to
see the rates gathered by the listing service) and/or listing fees (i.e., the fees paid by
depository institutions as payment for their opportunity to list or “post” their rates). The
listing service does not require a depository institution to pay for other services offered by
the listing service or its affiliates as a condition precedent to being listed.
(3) The fees paid by depository institutions are flat fees: they are not calculated on the basis
of the number or dollar amount of deposits accepted by the depository institution as a
result of the listing or “posting” of the depository institution’s rates.
(4) In exchange for these fees, the listing service performs no services except (A) the
gathering and transmission of information concerning the availability of deposits; and/or
(B) the transmission of messages between depositors and depository institutions
(including purchase orders and trade confirmations). In publishing or displaying
information about depository institutions, the listing service must not attempt to steer
funds toward particular institutions (except that the listing service may rank institutions
according to interest rates and also may exclude institutions that do not pay the listing
fee). Similarly, in any communications with depositors or potential depositors, the listing
service must not attempt to steer funds toward particular institutions.
1.g
Total reciprocal deposits. Report in this Memorandum item the total amount of the
reporting institution’s reciprocal deposits as of the report date that are included in the
institution’s total deposits (Schedule RC-E, sum of item 7, columns A and C). As defined in
Section 337.6(e)(2)(v) of the FDIC’s regulations, “reciprocal deposits” means “deposits
received by an agent institution through a deposit placement network with the same maturity
(if any) and in the same aggregate amount as covered deposits placed by the agent
institution in other network member banks.”
An institution should report its total reciprocal deposits in this Memorandum item 1.g,
including any reciprocal deposits that are reported as brokered deposits in Schedule RC-E,
Memorandum item 1.b (and, if applicable, in Memorandum items 1.c and 1.d), and as
brokered reciprocal deposits in Schedule RC-O, item 9 (and, if applicable, in item 9.a).
FFIEC 051
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Memoranda
Item No.
Caption and Instructions
1.g
(cont.)
In this regard, if an institution, subject to the special cap, receives reciprocal deposits that
cause its total reciprocal deposits to be greater than the special cap, the institution will no
longer meet the definition of “agent institution,” but the institution should report all of its
reciprocal deposits in this Memorandum item 1.g (and as brokered deposits in
Schedule RC-E, Memorandum item 1.b, and as brokered reciprocal deposits in
Schedule RC-O, item 9, and, if applicable, item 9.a). See the instructions for Schedule RC-E,
Memorandum item 1.b, for the definitions of “special cap” and “agent institution.”
Funds obtained through a deposit placement network, with the assistance of a deposit
broker, should only be reported as brokered deposits in Schedule RC-E, Memorandum
item 1.b, and, if applicable, in Memorandum items 1.c and 1.d, and should not be reported in
this Memorandum item 1.g as total reciprocal deposits.
For an institution that is not well capitalized or not well rated, the amount reported in this
Memorandum item will be used to compute the institution’s average amount of reciprocal
deposits held at quarter-end during the last four quarters preceding the quarter that the
institution fell below well capitalized or well rated. This average will be used to determine
whether the institution meets the third prong of the definition of “agent institution” under
Section 202 of the Economic Growth, Regulatory Relief, and Consumer Protection Act and
Section 337.6(e)(2)(i) of the FDIC’s regulations. Section 202 and Section 337.6(e)(2)(i) allow
an institution to meet the “agent institution” definition, and exclude certain reciprocal deposits
from its brokered deposits, if it does not receive reciprocal deposits that cause its total
reciprocal deposits to exceed the four-quarter average mentioned above.
2
FFIEC 051
Components of total nontransaction accounts. Memorandum item 2 divides total
nontransaction accounts into two major categories: savings deposits (Memorandum
items 2.a.(1) and 2.a.(2)) and time deposits (Memorandum items 2.b, 2.c, and 2.d). The sum
of Memorandum items 2.a.(1) and 2.a.(2) equals total savings deposits. The sum of
Memorandum items 2.b, 2.c, and 2.d equals total time deposits. The sum of Memorandum
items 2.a.(1) and 2.a.(2) (savings deposits) and Memorandum items 2.b, 2.c, and 2.d
(time deposits) equals total nontransaction deposits reported in item 7, column C, above.
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Memoranda
Item No.
Caption and Instructions
2
(cont.)
Include as time deposits in Memorandum items 2.b, 2.c, and 2.d:
(1) All time deposits (as defined in the Glossary entry for "deposits") with original maturities
of seven days or more that are not classified as transaction accounts.
(2) Interest paid by crediting time deposit accounts.
2.a
Savings deposits. Report in the appropriate subitem all savings deposits included in
column C above. See the Glossary entry for "deposits" for the definition of savings deposits.
Include as savings deposits in Memorandum items 2.a.(1) and 2.a.(2) interest paid by
crediting savings deposit accounts.
Exclude from Memorandum items 2.a.(1) and 2.a.(2):
(1) NOW accounts, ATS accounts, and telephone or preauthorized transfer accounts that
meet the definition of a transaction account (report in Schedule RC-E, column A, as
transaction accounts).
(2) Special passbook or statement accounts, such as "90-day notice accounts," "golden
passbook accounts," or deposits labeled as "savings certificates," that have a specified
original maturity of seven days or more (report as time deposits in Schedule RC-E,
Memorandum item 2.b, 2.c, or 2.d, below).
(3) Interest accrued on savings deposits but not yet paid or credited to a deposit account
(exclude from this schedule and report in Schedule RC-G, item 1.a, "Interest accrued and
unpaid on deposits").
2.a.(1)
Money market deposit accounts (MMDAs). Report in this item the total amount of all
money market deposit accounts (MMDAs) that are included in Schedule RC-E, column C,
above. See the Glossary entry for "deposits" for the definition of money market deposit
accounts.
2.a.(2)
Other savings deposits. Report in this item the total amount of all other savings deposits
that are included in Schedule RC-E, column C, above. This item includes those accounts
commonly known as passbook savings and statement savings. See the Glossary entry for
"deposits" for the definition of other savings deposits.
2.b
FFIEC 051
Total time deposits of less than $100,000. Report in this item all time deposits included in
Schedule RC-E, column C, above with balances of less than $100,000. This item includes
both time certificates of deposit and open-account time deposits with balances of less than
$100,000, regardless of negotiability or transferability. This item also includes 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. In addition, if the
bank has issued a master certificate of deposit to a deposit broker in an amount that exceeds
$100,000 and under which brokered certificates of deposit are issued in $1,000 amounts
(so-called “retail brokered deposits”), individual depositors who purchase multiple certificates
issued by the bank normally do not exceed the applicable deposit insurance limit (currently
$250,000). Under current deposit insurance rules the deposit broker is not required to
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Memoranda
Item No.
Caption and Instructions
2.b
(cont.)
provide information routinely on these purchasers and their account ownership capacity to
the bank issuing the deposits. If this information is not readily available to the issuing bank,
these brokered certificates of deposit in $1,000 amounts should be reported in this item as
time deposits of less than $100,000.
Exclude from this item all time deposits with balances of $100,000 or more (report in
Schedule RC-E, Memorandum items 2.c and 2.d, below).
2.c
Total time deposits of $100,000 through $250,000. Report in this item all time deposits
included in Schedule RC-E, column C, above with balances of $100,000 through $250,000.
This item includes both time certificates of deposit and open-account time deposits with
balances of $100,000 through $250,000, regardless of negotiability or transferability.
Exclude from this item and from Schedule RC-E, Memorandum item 2.d, below:
•
•
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, and
all time deposits with balances of less than $100,000,
which should be reported in Schedule RC-E, Memorandum item 2.b, above.
NOTE: Banks should include as time deposits of $100,000 through $250,000 those time
deposits originally issued in denominations of less than $100,000 that, because of interest
paid or credited, or because of additional deposits, now have balances of $100,000 through
$250,000.
2.d
Total time deposits of more than $250,000. Report in this item all time deposits included in
Schedule RC-E, column C, above with balances of more than $250,000. This item includes
both time certificates of deposit and open-account time deposits with balances of more than
$250,000, regardless of negotiability or transferability.
NOTE: Banks should include as time deposits of more than $250,000 those time deposits
originally issued in denominations of $250,000 or less that, because of interest paid or
credited, or because of additional deposits, now have balances of more than $250,000.
2.e
Individual Retirement Accounts (IRAs) and Keogh Plan accounts included in
Memorandum items 2.c and 2.d above. Report in this item all IRA and Keogh Plan time
deposits of $100,000 or more included in Schedule RC-E, Memorandum items 2.c and 2.d,
above. These IRA and Keogh Plan time deposits will also have been included in
Schedule RC-E, Memorandum item 1.a., “Total Individual Retirement Accounts (IRAs) and
Keogh Plan accounts.”
IRAs include traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and
SIMPLE IRAs. Exclude deposits in "Section 457" deferred compensation plans and selfdirected 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).
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Memoranda
Item No.
3
Caption and Instructions
Maturity and repricing data for time deposits of $250,000 or less. Report in the
appropriate subitem maturity and repricing data for the bank's time deposits of $250,000 or
less, i.e., the bank's time certificates of deposit of $250,000 or less and the bank's openaccount time deposits of $250,000 or less. The time deposits included in this item will have
been reported in Schedule RC-E, Memorandum items 2.b and 2.c, above. Therefore, the
sum of the amounts reported in Schedule RC-E, Memorandum items 3.a.(1) through 3.a.(4),
must equal the sum of Schedule RC-E, Memorandum items 2.b and 2.c, above.
For purposes of this memorandum item and Schedule RC-E, Memorandum item 4, the
following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the time deposit, and is known to both the bank and the
depositor. Also treated as a fixed interest rate is a predetermined interest rate which is a rate
that changes during the term of the time deposit on a predetermined basis, with the exact
rate of interest over the life of the time deposit known with certainty to both the bank and the
depositor when the time deposit is acquired.
A floating 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 bank's "prime rate," or to
some other variable criterion the exact value of which cannot be known in advance.
Therefore, the exact rate the time deposit carries at any subsequent time cannot be known at
the time the time deposit is received by the bank or subsequently renewed.
When the rate on a time deposit with a floating rate has reached a contractual floor or ceiling
level, the time deposit is to be treated as "fixed rate" rather than as "floating rate" until the
rate is again free to float.
Remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of a time deposit.
Next repricing date is the date the interest rate on a floating rate time deposit can next
change in accordance with the terms of the contract or the contractual maturity date of the
deposit, whichever is earlier.
Banks whose records or information systems provide data on the final contractual maturities
and next repricing dates of their time deposits for time periods that closely approximate the
maturity and repricing periods specified in this Memorandum item and Schedule RC-E,
Memorandum item 4 (e.g., 89 or 90 days rather than three months, 359 or 360 days rather
12 months) may use these data to complete this Memorandum item and Schedule RC-E,
Memorandum item 4.
Time deposits held in Individual Retirement Accounts (IRAs) and Keogh Plan accounts
should be reported without regard to distribution schedules that may be in effect for funds
held in certain depositors' accounts. Such time deposits should be reported in this
Memorandum item and in Schedule RC-E, Memorandum item 4, in the same manner as time
deposits not held in IRAs and Keogh Plan accounts.
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Memoranda
Item No.
Caption and Instructions
3
(cont.)
Noninterest-bearing time deposits should be treated as fixed rate time deposits and reported
according to the amount of time remaining until the final contractual maturity in this
Memorandum item and in Schedule RC-E, Memorandum item 4.
Fixed rate time deposits that offer the depositor the option to reset the interest rate on the
deposit to a current market rate one time during the term of the deposit should be treated as
fixed rate deposits and reported based on their remaining maturity.
Fixed rate time deposits that are callable at the option of the issuing bank should be reported
according to their remaining maturity without regard to their next call date unless the time
deposit has actually been called. When fixed rate time deposits have been called, they
should be reported on the basis of the time remaining until the call date. Callable floating rate
time deposits should be reported on the basis of their next repricing date, without regard to
their next call date unless the time deposit has actually been called. Floating rate time
deposits that have been called should be reported on the basis of their next repricing date or
their actual call date, whichever is earlier.
Fixed rate time deposits that provide depositors with the option to redeem them at one or
more specified dates prior to their contractual maturity date without penalty should be
reported according to their remaining maturity without regard to "put" dates if the depositor
has not exercised the "put." If a redemption option has been exercised, however, such
deposits should be reported on the basis of the time remaining until the date on which the
time deposit will be redeemed. Floating rate time deposits that provide depositors with
redemption options without penalty should be reported on the basis of their next repricing
date without regard to the "put" dates if the depositor has not exercised the "put." If a
redemption option has been exercised but the time deposit has not yet been redeemed, the
deposit should be reported on the basis of its next repricing date or its scheduled redemption
date, whichever is earlier.
3.a
3.a.(1)
3.a.(2)
FFIEC 051
Time deposits of $250,000 or less with a remaining maturity or next repricing date of.
Report the dollar amount of the bank's fixed rate time deposits of $250,000 or less in the
appropriate subitems according to the amount of time remaining to their final contractual
maturities. Report the dollar amount of the bank's floating rate time deposits of $250,000 or
less in the appropriate subitems according to their next repricing dates.
Three months or less. Report the dollar amount of:
•
the bank's fixed rate time deposits of $250,000 or less with remaining maturities of three
months or less, and
•
the bank's floating rate time deposits of $250,000 or less with the next repricing date
occurring in three months or less.
Over three months through 12 months. Report the dollar amount of:
•
the bank's fixed rate time deposits of $250,000 or less with remaining maturities of over
three months through 12 months, and
•
the bank's floating rate time deposits of $250,000 or less with the next repricing date
occurring in over three months through 12 months.
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Memoranda
Item No.
Caption and Instructions
3.a.(3)
Over one year through three years. Report the dollar amount of:
3.a.(4)
3.b
•
the bank's fixed rate time deposits of $250,000 or less with remaining maturities of over
one year through three years, and
•
the bank's floating rate time deposits of $250,000 or less with the next repricing date
occurring in over one year through three years.
Over three years. Report the dollar amount of:
•
the bank's fixed rate time deposits of $250,000 or less with remaining maturities of over
three years, and
•
the bank's floating rate time deposits of $250,000 or less with the next repricing date
occurring in over three years.
Time deposits of $250,000 or less with a remaining maturity of one year or less. Report
all time deposits of $250,000 or less with a remaining maturity of one year or less. Include
both fixed rate and floating rate time deposits of $250,000 or less.
The fixed rate time deposits that should be included in this item will also have been reported
by remaining maturity in Schedule RC-E, Memorandum items 3.a.(1) and 3.a.(2), above. The
floating rate time deposits that should be included in this item will have been reported by next
repricing date in Memorandum items 3.a.(1) and 3.a.(2), above. However, Memorandum
items 3.a.(1) and 3.a.(2) may include floating rate time deposits with a remaining maturity of
more than one year, but on which the interest rate can next change in one year or less; those
time deposits should not be included in this Memorandum item 3.b.
4
4.a
4.a.(1)
FFIEC 051
Maturity and repricing data for time deposits of more than $250,000. Report in the
appropriate subitem maturity and repricing data for the bank's time deposits of more than
$250,000, i.e., the bank's time certificates of deposit of more than $250,000 and the bank's
open-account time deposits of more than $250,000. The time deposits included in this item
will have been reported in Schedule RC-E, Memorandum item 2.d, above. Therefore, the
sum of the amounts reported in Schedule RC-E, Memorandum items 4.a.(1) through 4.a.(4)
must equal Schedule RC-E, Memorandum item 2.d, above. Refer to the definitions and other
instructions about time deposits in Schedule RC-E, Memorandum item 3, above.
Time deposits of more than $250,000 with a remaining maturity or next repricing date
of. Report the dollar amount of the bank's fixed rate time deposits of more than $250,000 in
the appropriate subitems according to the amount of time remaining to their final contractual
maturities. Report the dollar amount of the bank's floating rate time deposits of more than
$250,000 in the appropriate subitems according to their next repricing dates.
Three months or less. Report the dollar amount of:
•
the bank's fixed rate time deposits of more than $250,000 with remaining maturities of
three months or less, and
•
the bank's floating rate time deposits of more than $250,000 with the next repricing date
occurring in three months or less.
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Memoranda
Item No.
Caption and Instructions
4.a.(2)
Over three months through 12 months. Report the dollar amount of:
4.a.(3)
4.a.(4)
4. b
•
the bank's fixed rate time deposits of more than $250,000 with remaining maturities of
over three months through 12 months, and
•
the bank's floating rate time deposits of more than $250,000 with the next repricing date
occurring in over three months through 12 months.
Over one year through three years. Report the dollar amount of:
•
the bank's fixed rate time deposits of more than $250,000 with remaining maturities of
over one year through three years, and
•
the bank's floating rate time deposits of more than $250,000 with the next repricing date
occurring in over one year through three years.
Over three years. Report the dollar amount of:
•
the bank's fixed rate time deposits of more than $250,000 with remaining maturities of
over three years, and
•
the bank's floating rate time deposits of more than $250,000 with the next repricing date
occurring in over three years.
Time deposits of more than $250,000 with a remaining maturity of one year or less.
Report all time deposits of more than $250,000 with a remaining maturity of one year or less.
Include both fixed rate and floating rate time deposits of more than $250,000.
The fixed rate time deposits that should be included in this item will also have been reported
by remaining maturity in Schedule RC-E, Memorandum items 4.a.(1) and 4.a.(2), above. The
floating rate time deposits that should be included in this item will have been reported by next
repricing date in Memorandum items 4.a.(1) and 4.a.(2), above. However, Memorandum
items 4.a.(1) and 4.a.(2) may include floating rate time deposits with a remaining maturity of
more than one year, but on which the interest rate can next change in one year or less; those
time deposits should not be included in this Memorandum item 4.b.
NOTE: Schedule RC-E, Memorandum item 5, is to be completed semiannually in the June and
December reports only.
5
FFIEC 051
Does your institution offer one or more consumer deposit account products,
i.e., transaction account or nontransaction savings account deposit products intended
primarily for individuals for personal, household, or family use? Indicate in the boxes
marked “Yes” and “No” whether your institution offers one or more transaction account or
nontransaction savings account deposit products intended, marketed, or presented to the
public primarily for consumer use, i.e., deposit products offered primarily to individuals for
personal, household, and family use. For purposes of this item, consumer deposit account
products exclude (1) time deposits, (2) certified and official checks, and (3) pooled funds and
commercial products with sub-account structures, such as escrow accounts, that are held for
individuals but not eligible for consumer transacting, saving, or investing. Consumer deposit
account products also exclude Health Savings Accounts, Medical Savings Accounts, and
Coverdell Education Savings Accounts when such accounts are offered in the form of pooled
funds and commercial products.
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Memoranda
Item No.
Caption and Instructions
5
(cont.)
Your institution should answer “Yes” if it offers one or more transaction account or
nontransaction savings account deposit products intended primarily for consumer use even if
it also offers other transaction account or nontransaction savings account deposit products
intended for use by a broad range of depositors (which may include individuals) rather than
being intended, marketed, or presented to the public primarily for individuals for consumer
use and regardless of whether the products intended, marketed, or presented to the public
primarily for consumer use carry the same terms as other deposit products intended for use
by a broad range of depositors (which may include individuals).
Your institution should answer “No” if all of the transaction account and nontransaction
savings account deposit products it offers are intended for use by a broad range of depositors
(which may include individuals) or by non-consumer depositors and none of these products is
intended, marketed, or presented to the public primarily for individuals for personal,
household, or family use.
Transaction accounts include demand deposits, negotiable order of withdrawal (NOW)
accounts, automatic transfer service (ATS) accounts, and telephone and preauthorized
transfer accounts. Nontransaction savings accounts include money market deposit accounts
(MMDAs) and other savings deposits. For the definitions of these types of accounts, see the
Glossary entry for “deposits.”
NOTE: Memorandum items 6 and 7 are to be completed annually in the December report only by
institutions with $1 billion or more in total assets1 that answered “Yes” to Schedule RC-E, Memorandum
item 5, above.
6 and 7
General Instructions for Consumer Deposit Account Balances – Once a customer has
opened a deposit account with the reporting institution that is a deposit product intended
primarily for individuals for personal, household, or family use, the institution is not required
thereafter to review the customer’s status or usage of the account to determine whether the
transaction account is being used for personal, household, or family purposes. Thus, when
reporting the amount of consumer deposit account balances in Memorandum items 6 and 7
of Schedule RC-E, the reporting institution is not required to identify those individual accounts
within the population of a particular consumer deposit account product that are not being
used for personal, household, or family purposes and remove the balances of these accounts
from the total amount of deposit balances held in that consumer deposit account product.
An institution may have established a retail sweep arrangement for a transaction account
deposit product that is offered primarily to individuals for personal, household, and family use.
Under the sweep arrangement, the institution transfers funds between a customer’s
transaction account and that customer’s nontransaction account. The “Reporting of Retail
Sweep Arrangements Affecting Transaction and Nontransaction Accounts” section of the
Glossary entry for “deposits” identifies three criteria that must be met in order for a retail
sweep program to comply with the Federal Reserve Regulation D definitions of “transaction
account” and nontransaction “savings account.” The retail sweeps section of that Glossary
entry further provides that if all three criteria are met, an institution must report the transaction
account and nontransaction account components of a retail sweep program separately when
1
In general, the determination as to whether an institution has $1 billion or more in total assets is measured as of
June 30 of the previous calendar year. See pages 6a and 7 of the General Instructions for guidance on shifts in
reporting status.
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Memoranda
Item No.
Caption and Instructions
6 and 7
(cont.)
it reports its quarter-end deposit information in Schedule RC-E and certain other schedules.
Thus, this separate reporting of the two components of a retail sweep program applies to the
reporting of consumer deposit account balances in Memorandum items 6 and 7 of
Schedule RC-E.
6
Components of total transaction account deposits of individuals, partnerships, and
corporations. Report in the appropriate subitem the specified component of total transaction
account deposits of individuals, partnerships, and corporations. The sum of Memorandum
items 6.a and 6.b plus the total deposits in all other transaction account deposits of
individuals, partnerships, and corporations must equal Schedule RC-E, item 1, column A,
above.
If an institution offers one or more transaction account deposit products intended, marketed,
or presented to the public primarily for individuals for personal, household, or family use, but
has other transaction account deposit products intended for a broad range of depositors
(which may include individuals who would use the product for personal, household, or family
use), the institution should exclude the entire amount of these latter transaction account
deposit products from Memorandum items 6.a and 6.b. For example, if an institution has a
single negotiable order of withdrawal (NOW) account deposit product that it offers to all
depositors eligible to hold such accounts, including individuals, sole proprietorships, certain
nonprofit organizations, and certain government units, the institution would exclude the entire
amount of its NOW accounts from Memorandum items 6.a and 6.b. The institution should not
identify the NOW accounts held by individuals for personal, household, or family use and
report the amount of these accounts in Memorandum item 6.b, above.
6.a
Total deposits in those noninterest-bearing transaction account deposit products
intended primarily for individuals for personal, household, or family use. Report the
amount of deposits reported in Schedule RC-E, item 1, column A, held in noninterest-bearing
transaction accounts intended, marketed, or presented to the public primarily for individuals
for personal, household, or family use. Exclude certified and official checks as well as pooled
funds and commercial products with sub-account structures, such as escrow accounts, that
are held for individuals but not eligible for consumer transacting, saving, or investing.
6.b
Total deposits in those interest-bearing transaction account deposit products
intended primarily for individuals for personal, household, or family use. Report the
amount of deposits reported in Schedule RC-E, item 1, column A, held in interest-bearing
transaction accounts intended, marketed, or presented to the public primarily for individuals
for personal, household, or family use. Exclude pooled funds and commercial products with
sub-account structures, such as escrow accounts, that are held for individuals but not eligible
for consumer transacting, saving, or investing.
7
Components of total nontransaction savings account deposits of individuals,
partnerships, and corporations. Report in the appropriate subitem the specified
component of total nontransaction savings account deposits of individuals, partnerships, and
corporations. Exclude all time deposits of individuals, partnerships, and corporations
reported in Schedule RC-E, item 1, column C. The sum of Memorandum items 7.a.(1),
7.a.(2), 7.b,(1), and 7.b.(2) plus all time deposits of individuals, partnerships, and
corporations must equal Schedule RC-E, item 1, column C, above.
If an institution offers one or more nontransaction savings account deposit products intended,
marketed, or presented to the public primarily for individuals for personal, household, or
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Memoranda
Item No.
Caption and Instructions
7
(cont.)
family use, but has other nontransaction savings account deposit products intended for a
broad range of depositors (which may include individuals who would use the product for
personal, household, or family use), the institution should report the entire amount of these
latter nontransaction savings account deposit products in Memorandum item 7.a.(2) or
7.b.(2), as appropriate.
7.a
Money market deposit accounts (MMDAs) of individuals, partnerships, and
corporations. Report in the appropriate subitem the specified component of MMDA deposits
of individuals, partnerships, and corporations reported in Schedule RC-E, item 1, column C,
above. The sum of Memorandum items 7.a.(1) and 7.a.(2) must be less than or equal to
Schedule RC-E, Memorandum item 2.a.(1), above.
7.a.(1)
Total deposits in those MMDA deposit products intended primarily for individuals for
personal, household, or family use. Report the amount of deposits reported in
Schedule RC-E, item 1, column C, held in MMDAs intended, marketed, or presented to the
public primarily for individuals for personal, household, or family use. Exclude MMDAs in the
form of pooled funds and commercial products with sub-account structures, such as escrow
accounts, that are held for individuals but not eligible for consumer transacting, saving, or
investing.
7.a.(2)
Deposits in all other MMDAs of individuals, partnerships, and corporations. Report the
amount of all other MMDA deposits of individuals, partnerships, and corporations included in
Schedule RC-E, item 1, column C, that were not reported in Memorandum item 7.a.(1).
7.b
Other savings deposit accounts of individuals, partnerships, and corporations. Report
in the appropriate subitem the specified component of other savings deposits of individuals,
partnerships, and corporations reported in Schedule RC-E, item 1, column C, above. The
sum of Memorandum items 7.b.(1) and 7.b.(2) must be less than or equal to
Schedule RC-E, Memorandum item 2.a.(2), above.
7.b.(1)
Total deposits in those other savings deposit account deposit products intended
primarily for individuals for personal, household, or family use. Report the amount of
deposits reported in Schedule RC-E, item 1, column C, held in other savings deposit
accounts intended, marketed, or presented to the public primarily for individuals for personal,
household, or family use. Exclude other savings deposit accounts in the form of pooled funds
and commercial products with sub-account structures, such as escrow accounts, that are
held for individuals but not eligible for consumer transacting, saving, or investing.
7.b.(2)
Deposits in all other savings deposit accounts of individuals, partnerships, and
corporations. Report the amount of all other savings deposits of individuals, partnerships,
and corporations included in Schedule RC-E, item 1, column C, that were not reported in
Memorandum item 7.b.(1).
FFIEC 051
RC-E-23
(9-19)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
Examples – Calculating the Special Cap
(Note: Amounts shown are in thousands of dollars.)
Example 1 – Well capitalized but not well rated
As of March 31, 2019, an institution has $9,000,000 in liabilities and $180,000 in total reciprocal deposits,
is well capitalized (and has been well capitalized in every quarter for 10 years), but has a composite
supervisory rating of “3”. Therefore, the institution is subject to the special cap.
(1) Determine the most recent calendar quarter in which the institution was both well capitalized and
had a composite CAMELS rating of “1” or “2” at quarter-end.
The effective date of the composite CAMELS rating of not “1” or “2” was March 15, 2018, the day
the institution was notified in writing of a downgrade from CAMELS “2” to CAMELS “3”. Thus,
December 31, 2017, represents the most recent quarter-end that the bank was rated CAMELS
“1” or “2” and was well capitalized
(2) Calculate the average of the total amount of reciprocal deposits held by the institution on the last
day of the calendar quarter determined above (in the preceding bullet) and on each of the three
preceding calendar quarters.
To calculate the special cap, the institution must calculate the average amount of total reciprocal
deposits that it held as of the end of the four quarters ending December 31, 2017, September 30,
2017, June 30, 2017, and March 31, 2017. In this example, the institution received reciprocal
deposits as follows for the last quarter in which it was well capitalized and had a composite
CAMELS rating of “1” or “2”, and for the three prior quarters:
•
•
•
•
•
December 31, 2017
September 30, 2017
June 30, 2017
March 31, 2017
Average for the four quarters
= $180,000
= $300,000
= $300,000
= $350,000
= $282,500
The special cap would be $282,500 and the general cap would be $1,800,000 (the lesser of $5,000,000
or $9,000,000 multiplied by 20 percent). In this example, assuming that the institution satisfies all other
qualifications necessary to be an agent institution, the institution would meet the definition of an “agent
institution.”
For its March 31, 2019, Call Report, the institution would report $180,000 in total reciprocal deposits in
Schedule RC-E, Memorandum item 1.g. Because the institution holds total reciprocal deposits that are
below its special cap, it would not have to report any reciprocal deposits as brokered reciprocal deposits
in Schedule RC-O, items 9 and 9.a, and would not have to include the reciprocal deposits in its brokered
deposits in Schedule RC-E, Memorandum items 1.b, 1.c, and 1.d.
If the institution receives reciprocal deposits that cause its total reciprocal deposits to be greater than
$282,500, it would no longer meet the definition of “agent institution” and all of the institution’s reciprocal
deposits would need to be reported as brokered reciprocal deposits in Schedule RC-O, item 9 (and, if
applicable, item 9.a), and as total reciprocal deposits in Schedule RC-E, Memorandum item 1.g, and they
also would need to be included as part of the institution’s brokered deposits in Schedule RC-E,
Memorandum item 1.b (and, if applicable, in Memorandum items 1.c and 1.d).
FFIEC 051
RC-E-24
(9-19)
RC-E - DEPOSITS
FFIEC 051
RC-E - DEPOSITS
Examples – Calculating the Special Cap (cont.)
Example 2 – Well rated but not well capitalized
As of March 31, 2019, an institution has $5,000,000 in liabilities and $80,000 in total reciprocal deposits,
has a composite CAMELS rating of “2” (and has been “2”-rated in every quarter for 5 years), but is not
well capitalized, and has not received a waiver to accept brokered deposits. Therefore, the institution is
subject to the special cap.
(1) Determine the most recent calendar quarter in which the institution was both well capitalized and
had a composite CAMELS rating of “1” or “2” at quarter-end.
The bank was last well capitalized as of its September 30, 2017, Call Report. Thus,
September 30, 2017, represents the most recent quarter-end that the bank was well capitalized
and rated CAMELS “1” or “2”.
(2) Calculate the average of the total amount of reciprocal deposits held by the institution on the last
day of the calendar quarter determined above (in the preceding bullet) and on each of the three
preceding calendar quarters.
To calculate the special cap, the institution must calculate the average amount of total reciprocal
deposits that it held as of the end of the four quarters ending September 30, 2017, June 30, 2017,
March 31, 2017, and December 31, 2016. In the example, the institution held reciprocal deposits
as follows for the last quarter in which it was well-capitalized and had a composite CAMELS
rating of “1” or “2”, and for the three prior quarters:
•
•
•
•
•
September 30, 2017
June 30, 2017
March 31, 2017
December 31, 2016
Average for the four quarters
= $100,000
= $150,000
= $100,000
= $0
= $87,500
The special cap would be $87,500 and the general cap would be $1,000,000 (the lesser of $5,000,000 or
$5,000,000 multiplied by 20 percent). In this example, assuming that the institution satisfies all other
qualifications necessary to be an agent institution, the institution would meet the definition of an “agent
institution.”
For its March 31, 2019, Call Report, the institution would report $80,000 in total reciprocal deposits in
Schedule RC-E, Memorandum item 1.g. Because the institution holds total reciprocal deposits that are
below its special cap, it would not have to report any reciprocal deposits as brokered reciprocal deposits
in Schedule RC-O, items 9 and 9.a, and would not have to include the reciprocal deposits in its brokered
deposits in Schedule RC-E, Memorandum items 1.b, 1.c, and 1.d.
The institution may not receive reciprocal deposits that cause its total reciprocal deposits to be greater
than $87,500. Doing so would prevent the institution from meeting the definition of “agent institution” and,
as a consequence, all of its reciprocal deposits then would need to be reported as brokered reciprocal
deposits in Schedule RC-O, item 9 (and, if applicable, item 9.a), and as total reciprocal deposits in
Schedule RC-E, Memorandum item 1.g, and they also would need to be included as part of its brokered
deposits in Schedule RC-E, Memorandum item 1.b (and, if applicable, in Memorandum items 1.c and
1.d).1
1
Under Section 29 of the Federal Deposit Insurance Act, an insured depository institution that is less than well
capitalized is restricted from accepting deposits by or through a deposit broker. The FDIC may waive this restriction if
the insured depository institution is adequately capitalized; however, the restriction cannot be waived if the institution
is undercapitalized.
FFIEC 051
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FFIEC 051
RC-F - OTHER ASSETS
SCHEDULE RC-F – OTHER ASSETS
General Instructions
Institutions that have adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13), which
governs the accounting for credit losses, should report assets reportable in Schedule RC-F that fall within
the scope of the standard net of any applicable allowances for credit losses.
Item Instructions
Item No.
1
Caption and Instructions
Accrued interest receivable. Report the amount of recorded accrued interest on interestbearing assets applicable to current or prior periods that has not yet been collected. Exclude
accrued interest receivable on interest-bearing assets that is reported elsewhere on
Schedule RC, Balance Sheet.
Institutions that have adopted ASU 2016-13 should report amounts in this item net of any
applicable allowance for credit losses.
Exclude retained interests in accrued interest receivable related to securitized credit cards
(report in Schedule RC-F, item 6, "All other assets").
2
Net deferred tax assets. Report the net amount after offsetting deferred tax assets (net of
valuation allowance) and deferred tax liabilities measured at the report date for a particular
tax jurisdiction if the net result is a debit balance. If the result for a particular tax jurisdiction is
a net credit balance, report the amount in Schedule RC-G, item 2, "Net deferred tax
liabilities." If the result for each tax jurisdiction is a net credit balance, enter a zero in this item.
(A bank may report a net deferred tax debit, or asset, for one tax jurisdiction, such as for
federal income tax purposes, and also report at the same time a net deferred tax credit, or
liability, for another tax jurisdiction, such as for state or local income tax purposes.)
For further information on calculating deferred taxes for different tax jurisdictions, see the
Glossary entry for "income taxes."
3
Interest-only strips receivable (not in the form of a security). Report the fair value of
interest-only strips receivable (not in the form of a security) on mortgage loans and all other
financial assets.
As defined 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), an interest-only strip receivable is 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. This includes, for example, contractual rights to
future interest cash flows that exceed contractually specified servicing fees on financial
assets that have been sold. Report in the appropriate subitem interest-only strips receivable
not in the form of a security that are measured at fair value like available-for-sale securities.1
Report unrealized gains (losses) on these interest-only strips receivable in Schedule RC,
item 26.b, "Accumulated other comprehensive income."
1
An interest-only strip receivable is not in the form of a security if the strip does not meet the definition of a security
in ASC Topic 320, Investments-Debt Securities (formerly FASB Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities").
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RC-F-1
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RC-F - OTHER ASSETS
FFIEC 051
RC-F - OTHER ASSETS
Item No.
Caption and Instructions
3
(cont.)
Exclude from this item interest-only strips receivable in the form of a security, which should
be reported as available-for-sale securities in Schedule RC, item 2.b, or as trading assets in
Schedule RC, item 5, as appropriate. Also exclude interest-only strips not in the form of a
security that are held for trading, which should be reported in Schedule RC, item 5.
4
Equity investments without readily determinable fair values. Report the reporting
institution’s equity securities and other equity investments without readily determinable fair
values that are not reportable in other items on the Call Report balance sheet (Schedule RC).
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 referred to above.
Equity investments without readily determinable fair values may have been purchased by the
reporting institution or acquired for debts previously contracted.
All institutions should 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 price 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.
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 Services-Depository and Lending –
Investments-Other, Federal Reserve Bank stock and Federal Home Loan Bank stock are
carried at cost and evaluated for impairment.
Include in this item:
(1) Federal Reserve Bank stock.
(2) Federal Home Loan Bank stock.
(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).
(4) "Restricted stock," as defined in ASC Topic 320, 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.
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RC-F-2
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RC-F - OTHER ASSETS
FFIEC 051
RC-F - OTHER ASSETS
Item No.
Caption and Instructions
4
(cont.)
(5) Participation certificates issued by a Federal Intermediate Credit Bank, which represent
nonvoting stock of the bank.
(6) Minority interests held by the reporting bank in any company not meeting the definition of
associated company, except minority holdings that indirectly represent bank premises
(report in Schedule RC, item 6), other real estate owned (report in Schedule RC, item 7),
or investments in real estate ventures (report in Schedule RC, item 9), provided that the
fair value of any capital stock representing the minority interest is not readily
determinable. (See the Glossary entry for "subsidiaries" for the definition of associated
company.)
(7) Equity holdings in those corporate ventures over which the reporting bank does not
exercise significant influence, except equity holdings that indirectly represent bank
premises (report in Schedule RC, item 6), other real estate owned (report in
Schedule RC, item 7), or investments in real estate ventures (report in Schedule RC,
item 9). (See the Glossary entry for "subsidiaries" for the definition of corporate joint
venture.)
Exclude from this item:
(1) Investments in subsidiaries that have not been consolidated; associated companies;
corporate joint ventures, unincorporated joint ventures, and general partnerships over
which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for
“equity method of accounting”) (report in Schedule RC, item 8, "Investments in
unconsolidated subsidiaries and associated companies," or item 9, “Direct and indirect
investments in real estate ventures,” as appropriate).
(2) Preferred stock that by its terms either must be redeemed by the issuing enterprise or is
redeemable at the option of the investor (report in Schedule RC-B, item 6, "Other debt
securities").
5
Life insurance assets. Report in the appropriate subitem the amount of the bank’s general
account, separate account, and hybrid account holdings of life insurance that could be
realized under the insurance contracts as of the report date. In general, this amount is the
cash surrender value reported to the bank by the insurance carrier, less any applicable
surrender charges not reflected by the carrier in the reported cash surrender value, on all
forms of permanent life insurance policies owned by the bank, its consolidated subsidiaries,
and grantor (rabbi) trusts established by the bank or its consolidated subsidiaries, regardless
of the purposes for acquiring the insurance. A bank should also consider any additional
amounts included in the contractual terms of the insurance policy in determining the amount
that could be realized under the insurance contract. For further information, see the Glossary
entry for “bank-owned life insurance.”
Permanent life insurance refers to whole and universal life insurance, including variable
universal life insurance. Purposes for which insurance may be acquired include offsetting
pre- and post-retirement costs for employee compensation and benefit plans, protecting
against the loss of key persons, and providing retirement and death benefits to employees.
Include as life insurance assets the bank’s interest in insurance policies under split-dollar life
insurance arrangements with directors, officers, and employees under both the endorsement
and collateral assignment methods.
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RC-F - OTHER ASSETS
FFIEC 051
Item No.
5.a
RC-F - OTHER ASSETS
Caption and Instructions
General account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with general account insurance policies. In a general account
life insurance policy, the general assets of the insurance company issuing the policy support
the policy’s cash surrender value.
Also include the portion of the carrying value of:
(1) Separate account policies that represents general account claims on the insurance
company, such as realizable deferred acquisition costs and mortality reserves; and
(2) Hybrid account policies that represents general account claims on the insurance
company, such as any shortfall in the value of the separate account assets supporting
the cash surrender value of the policies.
5.b
Separate account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with separate account insurance policies. In a separate account
policy, the policy’s cash surrender value is supported by assets segregated from the general
assets of the insurance carrier. Under such an arrangement, the policyholder neither owns
the underlying separate account created by the insurance carrier on its behalf nor controls
investment decisions in the underlying account, but does assume all investment and price
risk.
Separate accounts are employed by life insurers to meet specific investment objectives of
policyholders. The accounts are often maintained as separate accounting and reporting
entities for pension plans as well as fixed benefit, variable annuity, and other products.
Investment income and investment gains and losses generally accrue directly to such
policyholders and are not accounted for on the general accounts of the insurer. On the books
of the insurer, the carrying values of separate account assets and liabilities usually
approximate each other with little associated capital. Because they are legally segregated,
the assets of each separate account are not subject to claims on the insurer that arise out of
any other business of the insurance company.
5.c
Hybrid account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with hybrid account insurance policies. A hybrid account
insurance policy combines features of both general and separate account insurance
products. Similar to a general account life insurance policy, a hybrid policy offers a
guaranteed minimum crediting rate, does not carry market value risk, and does not require
stable value protection. However, like a separate account life insurance policy, a hybrid
policy’s cash surrender value is supported by assets segregated from the general assets of
the insurance carrier. Because they are legally segregated, the assets of each separate
account are not subject to claims on the insurer that arise out of any other business of the
insurance company. Additionally, the bank holding the hybrid account life insurance policy is
able to select the investment strategy in which the insurance premiums are invested. Under
such an arrangement, the policyholder neither owns the underlying separate account created
by the insurance carrier on its behalf nor controls investment decisions in the underlying
account.
NOTE: Items 6.a through 6.j are to be completed semiannually in the June and December reports only.
6
FFIEC 051
All other assets. Report the amount of all other assets (other than those reported in
Schedule RC-F, items 1, 2, 3, 4, and 5, above) that cannot properly be reported in
Schedule RC, items 1 through 10.
RC-F-4
(6-18)
RC-F - OTHER ASSETS
FFIEC 051
RC-F - OTHER ASSETS
Item No.
Caption and Instructions
6
(cont.)
Institutions that have adopted FASB Accounting Standards Update No. 2016-13, which
governs the accounting for credit losses, should report financial assets included in this item
net of any applicable allowances for credit losses.
Disclose in Schedule RC-F, items 6.a through 6.j, 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 of all other assets reported in this item.
For each component of all other assets that exceeds the reporting threshold for which a
preprinted caption has not been provided in Schedule RC-F, items 6.a through 6.g, describe
the component with a clear but concise caption in Schedule RC-F, items 6.h through 6.j.
These descriptions should not exceed 50 characters in length (including spacing between
words).
Include as all other assets:
(1)
Prepaid expenses, i.e., those applicable as a charge against earnings in future
periods.1 (Report the amount of such assets in Schedule RC-F, item 6.a, if this amount
is greater than $100,000 and exceeds 25 percent of the amount reported in
Schedule RC-F, item 6.)
(2)
Automobiles, boats, equipment, appliances, and similar personal property repossessed
or otherwise acquired for debts previously contracted. (Report the amount of such
assets in Schedule RC-F, item 6.b, if this amount is greater than $100,000 and exceeds
25 percent of the amount reported in Schedule RC-F, item 6.)
(3)
Derivative instruments that have a positive fair value that the bank holds for purposes
other than trading. For further information, see the Glossary entry for "derivative
contracts." (Report this positive fair value in Schedule RC-F, item 6.c, if this amount is
greater than $100,000 and exceeds 25 percent of the amount reported in
Schedule RC-F, item 6.)
(4)
Retained interests in accrued interest receivable related to securitized credit cards.
For further information, see the Glossary entry for "accrued interest receivable related
to credit card securitizations."
(5)
Accrued interest on securities purchased (if accounted for separately from “accrued
interest receivable” in the bank’s records).
(6)
Cash items not conforming to the definition of "Cash items in process of collection"
found in the instruction to Schedule RC, item 1.a.
(7)
The full amount (with the exceptions noted below) of customers' liability to the reporting
bank on drafts and bills of exchange that have been accepted by the reporting bank, or
by others for its account, and are outstanding. The amount of customers' liability to the
reporting bank on its acceptances that have not yet matured should be reduced only
when: (a) the customer anticipates its liability to the reporting bank on an outstanding
acceptance by making a payment to the bank in advance of the acceptance's maturity
that immediately reduces the customer's indebtedness to the bank on such an
acceptance; or (b) the reporting bank acquires and holds its own acceptance. See the
Glossary entry for "bankers acceptances" for further information.
.
1
For banks involved in insurance activities, examples of prepaid expenses include ceding fees and acquisition fees
paid to insurance carriers external to the consolidated bank.
FFIEC 051
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RC-F - OTHER ASSETS
FFIEC 051
RC-F - OTHER ASSETS
Item No.
Caption and Instructions
6
(cont.)
(8)
Credit or debit card sales slips in process of collection until the reporting bank has been
notified that it has been given credit (report thereafter in Schedule RC, item 1.a,
"Noninterest-bearing balances and currency and coin").
(9)
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”). (Report the
amount of computer software in Schedule RC-F, item 6.e, if this amount is greater than
$100,000 and exceeds 25 percent of the amount reported in Schedule RC-F, item 6.)
(10) Bullion (e.g., gold or silver) not held for trading purposes.
(11) 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).
(12) Securities or other assets held in charitable trusts (e.g., Clifford Trusts).
(13) Debt issuance costs related to line-of-credit arrangements, net of accumulated
amortization. Debt issuance costs related to a recognized debt liability that is not a
line-of-credit arrangement should be presented as a direct deduction from the face
amount of the related debt, not as an asset. For debt reported at fair value under a
fair value option, debt issuance costs should be expensed as incurred.
(14) Furniture and equipment rented to others under operating leases, net of accumulated
depreciation.
(15) Ground rents.
(16) Customers' liability for deferred payment letters of credit.
(17) Reinsurance recoverables from reinsurers external to the consolidated bank.
(18) "Separate account assets" of the reporting bank's insurance subsidiaries.
(19) The positive fair value of unused loan commitments (not accounted for as derivatives)
that the bank has elected to report at fair value under a fair value option.
(20) FDIC loss-sharing indemnification assets. These indemnification assets represent the
carrying amount of the right to receive payments from the FDIC for losses incurred on
specified assets acquired from failed insured depository institutions or otherwise
purchased from the FDIC that are covered by loss-sharing agreements with the FDIC.
(Report the amount of such assets in Schedule RC-F, item 6.d, if this amount is greater
than $100,000 and exceeds 25 percent of the amount reported in Schedule RC-F,
item 6.) (Exclude the assets covered by the FDIC loss-sharing agreements from this
component of “All other assets.” Instead, report each covered asset in the balance
sheet category appropriate to the asset on Schedule RC, e.g., report covered held-forinvestment loans in Schedule RC, item 4.b, “Loans and leases held for investment.”)
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RC-F - OTHER ASSETS
FFIEC 051
RC-F - OTHER ASSETS
Item No.
Caption and Instructions
6
(cont.)
(21) Receivables arising from foreclosures on fully and partially government-guaranteed
mortgage loans if the guarantee is not separable from the loan before foreclosure and,
at the time of foreclosure, (a) the institution’s intent is to convey the property to the
guarantor and make a claim on the guarantee and the institution has the ability to
recover under that claim, and (b) any amount of the claim that is determined on the
basis of the fair value of the real estate is fixed. For further information, see the
Glossary entry for “Foreclosed assets.” (Report these receivables in Schedule RC-F,
item 6.g, if this amount is greater than $100,000 and exceeds 25 percent of the amount
reported in Schedule RC-F, item 6.)
(22) The reporting institution’s own accounts receivable. (Report these receivables in
Schedule RC-F, item 6.f, if this amount is greater than $100,000 and exceeds
25 percent of the amount reported in Schedule RC-F, item 6.) (Exclude factored
accounts receivable, which should be reported as loans in Schedule RC-C.)
Exclude from all other assets:
7
FFIEC 051
(1)
Redeemed U.S. savings bonds and food stamps (report in Schedule RC, item 1.a,
"Noninterest-bearing balances and currency and coin").
(2)
Real estate owned or leasehold improvements to property intended for future use as
banking premises (report in Schedule RC, item 6, "Premises and fixed assets").
(3)
Accounts identified as "building accounts," "construction accounts," or "remodeling
accounts" (report in Schedule RC, item 6, "Premises and fixed assets").
(4)
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 bank has not yet received title to the property, and real
estate collateral underlying a loan when the bank has obtained physical possession of
the collateral (report as "Other real estate owned" in Schedule RC, item 7).
(5)
Due bills representing purchases of securities or other assets by the reporting bank that
have not yet been delivered (report as loans in Schedule RC-C).
(6)
Factored accounts receivable (report as loans in Schedule RC-C).
Total. Report the sum of items 1 through 6. This amount must equal Schedule RC, item 11,
"Other assets."
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RC-G - OTHER LIABILITIES
SCHEDULE RC-G – OTHER LIABILITIES
Item Instructions
Item No.
Caption and Instructions
1.a
Interest accrued and unpaid on deposits. Report the amount of interest on deposits
accrued through charges to expense during the current or prior periods, but not yet paid or
credited to a deposit account. For savings banks, include in this item "dividends" accrued
and unpaid on deposits.
1.b
Other expenses accrued and unpaid. Report the amount of income taxes, interest on
nondeposit liabilities, and other expenses accrued through charges to expense during the
current or prior periods, but not yet paid. Exclude interest accrued and unpaid on deposits
(report such accrued interest in Schedule RC-G, item 1.a above).
2
Net deferred tax liabilities. Report the net amount after offsetting deferred tax assets
(net of valuation allowance) and deferred tax liabilities measured at the report date for a
particular tax jurisdiction if the net result is a credit balance. If the result for a particular tax
jurisdiction is a net debit balance, report the amount in Schedule RC-F, item 2, "Net deferred
tax assets." If the result for each tax jurisdiction is a net debit balance, enter a zero in this
item. (A bank may report a net deferred tax debit, or asset, for one tax jurisdiction, such as
for federal income tax purposes, and also report at the same time a net deferred tax credit, or
liability, for another tax jurisdiction, such as for state or local income tax purposes.)
For further information on calculating deferred taxes for different tax jurisdictions, see the
Glossary entry for "income taxes."
3
Allowance for credit losses on off-balance sheet credit exposures. Report the amount
of any allowance for credit losses on off-balance sheet credit exposures established in
accordance with generally accepted accounting principles.
Institutions that have adopted FASB Accounting Standards Update No. 2016-13, which
governs the accounting for credit losses, should exclude off-balance sheet credit exposures
that are unconditionally cancellable by the institution when estimating expected credit losses.
NOTE: Items 4.a through 4.h are to be completed semiannually in the June and December reports only.
4
All other liabilities. Report the amount of all other liabilities (other than those reported in
Schedule RC-G, items 1, 2, and 3, above) that cannot properly be reported in Schedule RC,
items 13 through 19.
Disclose in items 4.a through 4.h 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 reported for this item.
For each component of all other liabilities that exceeds this disclosure threshold for which a
preprinted caption has not been provided in Schedule RC-G, items 4.a through 4.e, describe
the component with a clear but concise caption in Schedule RC-G, items 4.f through 4.h.
These descriptions should not exceed 50 characters in length (including spacing between
words).
FFIEC 051
RC-G-1
(3-20)
RC-G - OTHER LIABILITIES
FFIEC 051
RC-G - OTHER LIABILITIES
Item No.
Caption and Instructions
4
(cont.)
Include as all other liabilities:
(1)
Accounts payable (other than expenses accrued and unpaid). (Report the amount of
accounts payable in Schedule RC-G, item 4.a, if this amount is greater than $100,000
and exceeds 25 percent of the amount reported in Schedule RC-G, item 4.)
(2)
Deferred compensation liabilities. (Report the amount of such liabilities in
Schedule RC-G, item 4.b, if this amount is greater than $100,000 and exceeds
25 percent of the amount reported in Schedule RC-G, item 4.)
(3)
Dividends declared but not yet payable, i.e., the amount of cash dividends declared on
limited-life preferred, perpetual preferred, and common stock on or before the report
date but not payable until after the report date. (Report the amount of such dividends in
Schedule RC-G, item 4.c, if this amount is greater than $100,000 and exceeds
25 percent of the amount reported in Schedule RC-G, item 4.) (Report dividend checks
outstanding as deposit liabilities in Schedule RC-E, item 1, column A, and item 7,
column B.)
(4)
Derivative instruments that have a negative fair value that the reporting bank holds for
purposes other than trading. For further information, see the Glossary entry for
"derivative contracts." (Report this negative fair value in Schedule RC-G, item 4.d, if this
amount is greater than $100,000 and exceeds 25 percent of the amount reported in
Schedule RC-G, item 4.)
(5)
For institutions that have adopted FASB Accounting Standards Update No. 2016-02 on
accounting for leases, lease liabilities for operating leases. (Report the amount of such
liabilities in Schedule RC-G, item 4.e, if this amount is greater than $100,000 and
exceeds 25 percent of the amount reported in Schedule RC-G, item 4.)
(6)
Deferred gains from sale-leaseback transactions.
(7)
Unamortized loan fees, other than those that represent an adjustment of the interest
yield, if material (refer to the Glossary entry for "loan fees" for further information).
(8)
Bank's liability for deferred payment letters of credit.
(9)
Recourse liability accounts arising from asset transfers with recourse that are reported
as sales.
(10) Unearned insurance premiums, claim reserves and claims adjustment expense
reserves, policyholder benefits, contractholder funds, and "separate account liabilities"
of the reporting bank's insurance subsidiaries.
(11) The full amount (except as noted below) of the liability represented by drafts and bills of
exchange that have been accepted by the reporting bank, or by others for its account,
and that are outstanding. The bank's liability on acceptances executed and outstanding
should be reduced prior to the maturity of such acceptances only when the reporting
bank acquires and holds its own acceptances, i.e., only when the acceptances are not
outstanding. See the Glossary entry for "bankers acceptances" for further information.
(12) Servicing liabilities.
(13) The negative fair value of unused loan commitments (not accounted for as derivatives)
that the bank has elected to report at fair value under a fair value option.
FFIEC 051
RC-G-2
(3-20)
RC-G - OTHER LIABILITIES
FFIEC 051
RC-G - OTHER LIABILITIES
Item No.
Caption and Instructions
4
(cont.)
(14) Cash payments and other consideration received in connection with transfers of the
reporting institution’s other real estate owned that have been financed by the institution
and do not qualify for sale accounting, which applicable accounting standards describe
as a “liability,” a “deposit,” or a “deposit liability.” See the Glossary entry for “foreclosed
assets” for further information
Exclude from all other liabilities (report in appropriate items of Schedule RC-E, Deposit
Liabilities):
(1)
Proceeds from sales of U.S. savings bonds.
(2)
Withheld taxes, social security taxes, sales taxes, and similar items.
(3)
Mortgage and other escrow funds (e.g., funds received for payment of taxes or
insurance), sometimes described as mortgagors' deposits or mortgage credit balances.
(4)
Undisbursed loan funds for which borrowers are liable and on which they pay interest.
The amounts of such undisbursed funds should be included in both loans and deposits.
(5)
Funds held as dealer reserves (see the Glossary entry for "dealer reserve accounts" for
the definition of this term).
(6)
Payments collected by the bank on loans secured by real estate and other loans
serviced for others that have not yet been remitted to the owners of the loans.
(7)
Credit balances on credit cards and other revolving credit plans as a result of customers'
overpayments.
Also exclude from all other liabilities (1) due bills or similar instruments representing the
bank's receipt of payment and (2) for institutions that have not adopted FASB Accounting
Standards Update No. 2016-02 (ASU 2016-02) on accounting for leases, the bank's
obligations under capital leases, and for institutions that have adopted ASU 2016-02, the
bank’s lease liabilities for finance leases (report in Schedule RC-M, item 5.b, "Other
borrowings").
5
FFIEC 051
Total. Report the sum of items 1 through 4. This amount must equal Schedule RC, item 20,
"Other liabilities."
RC-G-3
(3-20)
RC-G - OTHER LIABILITIES
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FFIEC 051
RC-K – AVERAGES
SCHEDULE RC-K – QUARTERLY AVERAGES
General Instructions
Report for the items on this schedule the average of the balances as of the close of business for each day
for 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 an office of the bank (or any of its consolidated subsidiaries or
branches) is closed (e.g., Saturdays, Sundays, or holidays), use the amount outstanding from the
previous business day. An office is considered closed if there are no transactions posted to the general
ledger as of that date.
If the reporting institution was the acquirer in a business combination accounted for under the acquisition
method for which the acquisition date was during the calendar quarter, the quarterly averages for the
reporting institution should include in the numerator:
•
•
Dollar amounts for the reporting institution for each day (or each Wednesday) from the beginning of
the quarter until the acquisition date and
Dollar amounts for the reporting institution and the acquired institution or business for each day (or
each Wednesday) from the acquisition date through the end of the quarter
and should include in the denominator the number of days (or Wednesdays) in the entire quarter.
If the reporting institution was acquired in a transaction that became effective during the calendar quarter,
retained its separate corporate existence, and elected to apply pushdown accounting in its separate
financial statements (including the Consolidated Reports of Condition and Income), the quarterly
averages for the reporting institution should include only the dollar amounts for each day (or each
Wednesday) from the acquisition date to the end of the quarter in the numerator and the number of days
(or Wednesdays) from the acquisition date through the end of the quarter in the denominator.
If the reporting institution was involved in a transaction between entities under common control that
became effective during the calendar quarter and has been accounted for in a manner similar to a pooling
of interests, the quarterly averages for the reporting institution should include dollar amounts for both the
reporting institution and the institution or business that was combined in the transaction for each day (or
each Wednesday) from the beginning to the end of the quarter in the numerator and the number of days
(or Wednesdays) in the entire quarter in the denominator.
For further information on business combinations, pushdown accounting, and transactions between
entities under common control, see the Glossary entry for "business combinations."
If the reporting institution began operating during the calendar quarter, the quarterly averages for the
institution should include only the dollar amounts for the days (or Wednesdays) since the institution began
operating in the numerator and the number of days (or Wednesdays) since the institution began operating
in the denominator.
For all institutions, the loan categories specified in item 6 of this schedule correspond to the loan category
definitions for Schedule RC-C, Part I, Loans and Leases.
Institutions that have adopted FASB Accounting Standards Update No. 2016-13, which governs the
accounting for credit losses, should not deduct allowances for credit losses, if any, from the related
amortized cost amounts when calculating quarterly averages for interest-bearing balances due from
depository institutions, debt securities, federal funds sold and securities purchased under agreements to
resell, loans, and lease financing receivables for Schedule RC-K, items 1 through 8 and Memorandum
item 1. However, such institutions should deduct allowances for credit losses from the related amortized
cost amounts when calculating the quarterly average for total assets for Schedule RC-K, item 9.
FFIEC 051
RC-K-1
(12-20)
RC-K – AVERAGES
FFIEC 051
RC-K – AVERAGES
Item Instructions
Item No.
Caption and Instructions
ASSETS
1
Interest-bearing balances due from depository institutions. Report the quarterly average
for interest-bearing balances due from depository institutions (as defined for Schedule RC,
item 1.b, "Interest-bearing balances").
2
U.S. Treasury securities and U.S. Government agency obligations (excluding
mortgage-backed securities). Report the quarterly average of the amortized cost of the
bank's held-to-maturity and available-for-sale U.S. Treasury and U.S. Government agency
and sponsored agency obligations (as defined for Schedule RC-B, items 1 and 2, columns A
and C).
3
Mortgage-backed securities. Report the quarterly average of the amortized cost of the
bank's held-to-maturity and available-for-sale mortgage-backed securities (as defined for
Schedule RC-B, item 4, columns A and C).
4
All other debt securities and equity securities with readily determinable fair values not
held for trading. Report the quarterly average of the amortized cost of the institution’s
held-to-maturity and available-for-sale debt securities issued by states and political
subdivisions in the U.S., asset-backed securities and structured financial products, and other
debt securities (as defined for Schedule RC-B, items 3, 5, and 6, columns A and C) plus the
quarterly average of the fair value of the institution’s investments in mutual funds and other
equity securities with readily determinable fair values not held for trading (as defined for
Schedule RC, item 2.c).
5
Federal funds sold and securities purchased under agreements to resell. Report the
quarterly average for federal funds sold and securities purchased under agreements to resell
(as defined for Schedule RC, item 3).
6
Loans:
6.a
Total loans. Report the quarterly average for total loans held for investment and held for
sale (as defined for Schedule RC-C, Part I, sum of items 1 through 9, less item 11).
6.b
Loans secured by real estate:
6.b.(1)
Loans secured by 1-4 family residential properties. Report the quarterly average for
loans secured by 1-4 family residential properties (as defined for Schedule RC-C, Part I,
item 1.c).
Exclude “1-4 family residential construction loans” (as defined for Schedule RC-C, Part I,
item 1.a.(1)).
6.b.(2)
All other loans secured by real estate. Report the quarterly average for all construction,
land development, and other land loans; loans secured by farmland; loans secured by
multifamily (5 or more) residential properties; and loans secured by nonfarm nonresidential
properties (as defined for Schedule RC-C, Part I, items 1.a.(1), 1.a.(2), 1.b, 1.d, 1.e.(1), and
1.e.(2)).
Exclude loans “Secured by 1-4 family residential properties” (as defined for Schedule RC-C,
Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b)).
FFIEC 051
RC-K-2
(12-20)
RC-K – AVERAGES
FFIEC 051
Item No.
RC-K – AVERAGES
Caption and Instructions
6.c
Commercial and industrial loans. Report the quarterly average for commercial and
industrial loans (as defined for Schedule RC-C, Part I, item 4).
6.d
Loans to individuals for household, family, and other personal expenditures:
6.d.(1)
Credit cards. Report the quarterly average for credit cards (as defined for Schedule RC-C,
Part I, item 6.a).
6.d.(2)
Other. Report the quarterly average for loans to individuals for household, family, and
other personal expenditures other than credit cards (as defined for Schedule RC-C, Part I,
items 6.b, 6.c, and 6.d).
7
Not applicable.
8
Lease financing receivables (net of unearned income). Report the quarterly average for
lease financing receivables, net of unearned income (as defined for Schedule RC-C, Part I,
item 10).
9
Total assets. Report the quarterly average for the bank’s total assets, as defined for
“Total assets,” on Schedule RC, item 12, except that this quarterly average should reflect:
• All debt securities not held for trading at amortized cost;
• Equity securities with readily determinable fair values not held for trading at fair value;
and
• Equity securities and other equity investments without readily determinable fair values not
held for trading at their balance sheet carrying values (i.e., fair value or, if elected, 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).
This exception for equity securities and other equity investments does not apply to those
accounted for under the equity method or that result in consolidation.
In addition, to the extent that net deferred tax assets included in the bank's total assets, if
any, include the deferred tax effects of any unrealized holding gains and losses on availablefor-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.
This item 9 is not the sum of Schedule RC-K, items 1 through 8 above.
FFIEC 051
RC-K-3
(12-20)
RC-K – AVERAGES
This page intentionally left blank.
FFIEC 051
Item No.
RC-K – AVERAGES
Caption and Instructions
LIABILITIES
10
Interest-bearing transaction accounts. Report the quarterly average for interest-bearing
transaction accounts: interest-bearing demand deposits, NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts (as defined for Schedule RC-E, column A,
"Total transaction accounts").
Exclude noninterest-bearing demand deposits.
See the Glossary entry for "deposits" for the definitions of “demand deposits,” "NOW
accounts," "ATS accounts," and "telephone or preauthorized transfer accounts."
11
Nontransaction accounts:
11.a
Savings deposits. Report the quarterly average for savings deposits (as defined for
Schedule RC-E, Memorandum items 2.a.(1) and 2.a.(2)). Savings deposits include money
market deposit accounts (MMDAs) and other savings deposits.
11.b
Time deposits of $250,000 or less. Report the quarterly average for time deposits of
$250,000 or less (as defined for Schedule RC-E, Memorandum items 2.b and 2.c).
11.c
Time deposits of more than $250,000. Report the quarterly average for time deposits of
more than $250,000 (as defined for Schedule RC-E, Memorandum item 2.d).
12
Federal funds purchased and securities sold under agreements to repurchase. Report
the quarterly average for federal funds purchased and securities sold under agreements to
repurchase (as defined for Schedule RC, item 14).
NOTE: Item 13 is to be completed by banks that have $100 million or more in total assets.
13
FFIEC 051
Other borrowed money. Report the quarterly average for other borrowed money (as
defined for Schedule RC, item 16).
RC-K-5
(3-18)
RC-K – AVERAGES
FFIEC 051
RC-K – AVERAGES
Memorandum
Item No.
1
Caption and Instructions
Loans to finance agricultural production and other loans to farmers.
Memorandum 1 is to be completed by:
•
•
banks with $300 million or more in total assets, and
banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, Part I, item 3)
exceeding five percent of total loans and leases held for investment and held for sale
(Schedule RC-C, Part I, item 12).
Report in this item the quarterly average for loans to finance agricultural production and other
loans to farmers (as defined for Schedule RC-C, Part I, item 3).
FFIEC 051
RC-K-6
(3-18)
RC-K – AVERAGES
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
SCHEDULE RC-L – OFF-BALANCE SHEET ITEMS
General Instructions
Schedule RC-L should be completed on a fully consolidated basis. Schedule RC-L includes the following
selected commitments, contingencies, and other off-balance sheet items that are not reportable as part of
the balance sheet of the Consolidated Report of Condition (Schedule RC). Among the items not to be
reported in Schedule RC-L are contingencies arising in connection with litigation. Exclude derivative
contracts, the notional amounts of which are to be reported in Schedule SU, item 1. For information on
the reporting treatment for credit enhancements and liquidity facilities provided to asset-backed
commercial paper programs in Schedule RC-L, refer to the General Instructions for Schedule RC-L in
the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Item Instructions
Item No.
1
Caption and Instructions
Unused commitments. Report in the appropriate subitem the unused portions of
commitments. Unused commitments are to be reported gross, i.e., include in the appropriate
subitem the unused amount of commitments acquired from and conveyed or participated to
others. However, exclude commitments conveyed or participated to others that the bank is
not legally obligated to fund even if the party to whom the commitment has been conveyed or
participated fails to perform in accordance with the terms of the commitment.
For purposes of this item, commitments include:
(1) Commitments to make or purchase extensions of credit in the form of loans or
participations in loans, lease financing receivables, or similar transactions.
(2) Commitments for which the bank has charged a commitment fee or other consideration.
(3) Commitments that are legally binding.
(4) Loan proceeds that the bank is obligated to advance, such as:
(a) Loan draws;
(b) Construction progress payments; and
(c) Seasonal or living advances to farmers under prearranged lines of credit.
(5) Rotating, revolving, and open-end credit arrangements, including, but not limited to, retail
credit card lines and home equity lines of credit.
(6) 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:
(a) Are in writing, regardless of whether they are legally binding on the bank and the
borrower, or
FFIEC 051
RC-L-1
(3-17)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
Item No.
1
(cont.)
RC-L – OFF-BALANCE SHEET ITEMS
Caption and Instructions
(b) If not in writing, are legally binding on the bank and the borrower,1
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.
(7) Overdraft protection on depositors’ accounts offered under a program where the bank
advises account holders of the available amount of overdraft protection, for example,
when accounts are opened or on depositors' account statements or ATM receipts.
(8) The bank’s own takedown in securities underwriting transactions.
(9) Revolving underwriting facilities (RUFs), note issuance facilities (NIFs), and other similar
arrangements, which are facilities under which a borrower can issue on a revolving basis
short-term paper in its own name, but for which the underwriting banks have a legally
binding commitment either to purchase any notes the borrower is unable to sell by the
rollover date or to advance funds to the borrower.
Exclude forward contracts and other 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 SU, item 1. Include the
amount (not the fair value) of the unused portions of loan commitments that do not meet the
definition of a derivative that the bank has elected to report at fair value under a fair value
option. Also include forward contracts that do not meet the definition of a derivative.
The unused portions of commitments are to be reported in the appropriate subitem
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 cancelable at any time.
In the case of commitments for syndicated loans, report only the bank’s proportional share of
the commitment.
For information on reporting the unused portions of revolving asset-based lending
commitments, refer to the instructions for Schedule RC-L, item 1, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
1.a
Revolving, open-end lines secured by 1-4 family residential properties. Report the
unused portions of commitments to extend credit under revolving, open-end lines of credit
secured by 1-4 family residential properties. These lines, commonly known as home equity
lines, are typically secured by a junior lien and are usually accessible by check or credit card.
1.b
Credit card lines. Report the unused portions of all commitments to extend credit both to
individuals for household, family, and other personal expenditures and to other customers,
including commercial or industrial enterprises, through credit cards. Exclude home equity
lines accessible through credit cards. Banks may report unused credit card lines as of the
end of their customers' last monthly billing cycle prior to the report date or 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.
FFIEC 051
RC-L-2
(3-17)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
Item No.
Caption and Instructions
1.c.(1)
Commitments to fund commercial real estate, construction, and land development
loans secured by real estate. Report in the appropriate subitem the unused portions of
commitments to extend credit for the specific purpose of financing commercial and
multifamily residential properties (e.g., business and industrial properties, hotels, motels,
churches, hospitals, and apartment buildings), provided that such commitments, when
funded, would be reportable as either loans secured by multifamily residential properties in
Schedule RC-C, Part I, item 1.d, or loans secured by nonfarm nonresidential properties in
Schedule RC-C, Part I, item 1.e.
Also include the unused portions of commitments to extend credit for the specific purpose of
financing (a) land development (i.e., the process of improving land – laying sewers, water
pipes, etc.) preparatory to erecting new structures or (b) the on-site construction of industrial,
commercial, residential, or farm buildings, provided that such commitments, when funded,
would be reportable as loans secured by real estate in Schedule RC-C, Part I, item 1.a,
"Construction, land development, and other land loans." For purposes of 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 loan proceeds the bank is obligated to advance as
construction progress payments.
Do not include general lines of credit that a borrower, at its option, may draw down to finance
construction and land development (report in Schedule RC-L, item 1.c.(2) or item 1.e.(1),
below, as appropriate).
1.c.(1)(a)
1-4 family residential construction loan commitments. Report the unused portions of
commitments to extend credit for the specific purpose of constructing 1-4 family residential
properties, provided that such commitments, when funded, would be reportable as loans
secured by real estate in Schedule RC-C, Part I, item 1.a.(1), “1-4 family residential
construction loans."
1.c.(1)(b)
Commercial real estate, other construction loan, and land development loan
commitments. Report the unused portions of all other commitments to fund commercial real
estate, construction, and land development loans secured by real estate (as defined for
Schedule RC-L, item 1.c.(1)) other than commitments to fund 1-4 family residential
construction (as defined for Schedule RC-L, item 1.c.(1)(a)).
FFIEC 051
RC-L-3
(9-20)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
Item No.
Caption and Instructions
1.c.(2)
Commitments to fund commercial real estate, construction, and land development
loans not secured by real estate. Report the unused portions of all commitments to extend
credit for the specific purpose of financing commercial and residential real estate activities,
e.g., acquiring, developing, and renovating commercial and residential real estate, provided
that such commitments, when funded, would be reportable as "Commercial and industrial
loans" in Schedule RC-C, Part I, item 4, or as "Other loans" in Schedule RC-C, Part I,
item 9.b. Include in this item loan proceeds the bank is obligated to advance as construction
progresses.
Such commitments generally may include:
(1) commitments to extend credit for the express purpose of financing real estate ventures
as evidenced by loan documentation or other circumstances connected with the loan; or
(2) commitments made to organizations or individuals 80 percent of whose revenue or
assets are derived from or consist of real estate ventures or holdings.
Exclude from this item all commitments that, when funded, would be reportable as "Loans
secured by real estate" in Schedule RC-C, Part I, item 1. Also exclude commitments made to
commercial and industrial firms where the sole purpose for the financing is to construct a
factory or office building to house the company's operations or employees.
1.d
Not applicable.
1.e
Other unused commitments. Report in the appropriate subitem the unused portion of all
commercial and industrial loan commitments, commitments for loans to financial institutions,
and all other commitments not reportable in Schedule RC-L, items 1.a through 1.c.(2), above.
Include commitments to extend credit through overdraft facilities or commercial lines of credit,
retail check credit and related plans, and those overdraft protection programs in which the
bank advises account holders of the available amount of protection.
1.e.(1)
Commercial and industrial loans. Report the unused portions of commitments to extend
credit for commercial and industrial purposes, i.e., commitments that, when funded, would be
reportable as commercial and industrial loans in Schedule RC-C, Part I, item 4, “Commercial
and industrial loans." Exclude unused credit card lines to commercial and industrial
enterprises (report in Schedule RC-L, item 1.b, above).
1.e.(2)
Loans to financial institutions. Report the unused portions of commitments to extend
credit to financial institutions, i.e., commitments that, when funded, would be reportable either
as loans to depository institutions in Schedule RC-C, Part I, item 2, “Loans to depository
institutions and acceptances of other banks," or as loans to nondepository financial
institutions in Schedule RC-C, Part I, item 9.a, “Loans to nondepository financial institutions.”
1.e.(3)
All other unused commitments. Report the unused portions of commitments not reportable
in Schedule RC-L, items 1.a through 1.e.(2), above.
Include commitments to extend credit secured by 1-4 family residential properties, except
(a) revolving, open-end lines of credit secured by 1-4 family residential properties (e.g., home
equity lines), which should be reported in Schedule RC-L, item 1.a, above, (b) commitments
for 1-4 family residential construction and land development loans (that are secured by such
properties), which should be reported in Schedule RC-L, item 1.c.(1), above, and
(c) commitments that meet the definition of a derivative and must be accounted for in
FFIEC 051
RC-L-4
(9-20)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
Item No.
Caption and Instructions
1.e.(3)
(cont.)
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 SU, item 1.
Also include note issuance facilities (NIFs), revolving underwriting facilities (RUFs), and the
unsold portion of the reporting bank’s own takedown in securities underwriting transactions.
2 and 3
General Instructions for Standby Letters of Credit – Originating banks must report in
items 2 and 3 the full amount outstanding and unused of financial and performance standby
letters of credit, respectively. Include those standby letters of credit that are collateralized by
cash on deposit, that have been acquired from others, and in which participations have been
conveyed to others where (a) the originating and issuing bank is obligated to pay the full
amount of any draft drawn under the terms of the standby letter of credit and (b) the
participating banks have an obligation to partially or wholly reimburse the originating bank,
either directly in cash or through a participation in a loan to the account party.
For syndicated standby letters of credit where each bank has a direct obligation to the
beneficiary, each bank must report only its share in the syndication. Similarly, if several banks
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 participating bank is only liable for a certain portion of the entire amount, each bank
shall report only its proportional share of the total standby letter of credit.
For a financial or performance standby letter of credit that is in turn backed by a financial
standby letter of credit issued by another bank, each bank must report the entire amount of the
standby letter of credit it has issued in either item 2 or item 3 below, as appropriate.
2
Financial standby letters of credit. Report the amount outstanding and unused as of the
report date of all financial standby letters of credit (and all legally binding commitments to
issue financial standby letters of credit) issued by any office of the bank. A financial standby
letter of credit irrevocably obligates the bank to pay a third-party beneficiary when a customer
(account party) fails to repay an outstanding loan or debt instrument. (See the Glossary entry
for "letter of credit" for further information.)
Exclude from financial standby letters of credit:
(1) Financial standby letters of credit where the beneficiary is a consolidated subsidiary of
the reporting bank.
(2) Financial standby letters of credit issued by another depository institution (such as a
correspondent bank), a Federal Home Loan Bank, or any other entity on behalf of the
reporting bank, which is the account party on the letters of credit and therefore is
obligated to reimburse the issuing entity for all payments made under the standby letters
of credit (report such standby letters of credit in Schedule RC-L, item 9).
(3) Performance standby letters of credit (report such standby letters of credit in
Schedule RC-L, item 3).
(4) Signature or endorsement guarantees of the type associated with the clearing of
negotiable instruments or securities in the normal course of business.
FFIEC 051
RC-L-5
(9-20)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
Item No.
3
RC-L – OFF-BALANCE SHEET ITEMS
Caption and Instructions
Performance standby letters of credit. Report the amount outstanding and unused as of
the report date of all performance standby letters of credit (and all legally binding
commitments to issue performance standby letters of credit) issued by any office of the bank.
A performance standby letter of credit irrevocably obligates the bank to pay a third-party
beneficiary when a customer (account party) fails to perform some contractual non-financial
obligation. (See the Glossary entry for "letter of credit" for further information.)
Exclude from performance standby letters of credit:
(1) Performance standby letters of credit where the beneficiary is a consolidated subsidiary
of the reporting bank.
(2) Financial standby letters of credit.
(3) Signature or endorsement guarantees of the type associated with the clearing of
negotiable instruments or securities in the normal course of business.
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 Schedule RC-L, items 2 and 3, above). (See the
Glossary entry for "letter of credit.") Legally binding commitments to issue commercial letters
of credit are to be reported in this item.
Travelers' letters of credit and other letters of credit issued for money or its equivalent by the
reporting bank or its agents should be reported as demand deposit liabilities in Schedule RC-E.
5
Not applicable.
6
Securities lent and borrowed:
6.a
Securities lent. Report the appropriate amount of all securities lent against collateral or on
an uncollateralized basis. Report the fair value as of the report date of bank-owned trading
and available-for-sale securities and the amortized cost as of the report date of bank-owned
held-to-maturity securities that have been lent. In addition, for customers who have been
indemnified against any losses by the reporting bank or its consolidated subsidiaries, report
the fair value as of the report date of such customers' securities, including customers'
securities held in the reporting bank's trust department, that have been lent. If the reporting
bank or its consolidated subsidiaries have indemnified their customers against any losses on
their securities that have been lent by the bank or its subsidiaries, the commitment to
indemnify – either through a standby letter of credit or other means – should not be reported
in any other item on Schedule RC-L.
6.b
Securities borrowed. Report the appropriate amount of all securities borrowed by the bank
against collateral or on an uncollateralized basis. For borrowed securities that are fully
collateralized by similar securities of equivalent value, report the fair value of the borrowed
securities at the time they were borrowed. For other borrowed securities, report their fair
value as of the report date.
7-8
Not applicable.
FFIEC 051
RC-L-6
(9-20)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
Item No.
9
RC-L – OFF-BALANCE SHEET ITEMS
Caption and Instructions
All other off-balance sheet liabilities. Report all significant types of off-balance sheet
liabilities not covered in other items of this schedule. Exclude all items which are required to
be reported as liabilities on the balance sheet of the Consolidated Report of Condition
(Schedule RC), contingent liabilities arising in connection with litigation in which the reporting
bank is involved, commitments to purchase property being acquired for lease to others
(report in Schedule RC-L, item 1.e, above), and signature and endorsement guarantees of
the type associated with the regular clearing of negotiable instruments or securities in the
normal course of business.
Report only the aggregate amount of those types of "other off-balance sheet liabilities" that
individually exceed 10 percent of the bank's total equity capital reported in Schedule RC,
item 27.a. If the bank has no types of "other off-balance sheet liabilities" that individually
exceed 10 percent of total equity capital, report a zero.
NOTE: Items 9.c through 9.f are to be reported semiannually in the June and December reports only.
Disclose in items 9.c through 9.f each type of "other off-balance sheet liabilities" reportable in
this item, and the dollar amount of the off-balance sheet liability, that individually exceeds
25 percent of the bank's total equity capital reported in Schedule RC, item 27.a. For each
type of off-balance sheet liability that exceeds this disclosure threshold for which a preprinted
caption has not been provided, describe the liability with a clear but concise caption in
items 9.d through 9.f. These descriptions should not exceed 50 characters in length
(including spacing between words).
Include as other off-balance sheet liabilities:
(1) Contracts for the purchase of 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 SU, item 1), and accounted
for on a settlement-date basis.
(2) Standby letters of credit issued by another depository institution (such as a
correspondent bank), a Federal Home Loan Bank, or any other entity on behalf of the
reporting bank, which is the account party on the letters of credit and therefore is
obligated to reimburse the issuing entity for all payments made under the standby letters
of credit. (Report the amount of these standby letters of credit in Schedule RC-L,
item 9.c, if this amount exceeds 25 percent of the bank’s total equity capital reported in
Schedule RC, item 27.a.)
(3) Financial guarantee insurance which insures the timely payment of principal and interest
on bond issues.
(4) Letters of indemnity other than those issued in connection with the replacement of lost or
stolen or official checks.
(5) 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 stolen official checks.
FFIEC 051
RC-L-7
(6-18)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
Item No.
Caption and Instructions
9
(cont.)
(6) The gross amount (stated in U.S. dollars) of all spot foreign exchange contracts
committing the reporting bank 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 or less (depending on
market convention), of a foreign currency at the prevailing cash market rate. For
information on the reporting of spot foreign exchange contracts, refer to the instructions
for Schedule RC-L, item 8, in the instructions for the FFIEC 031 and FFIEC 041 Call
Reports.
10
All other off-balance sheet assets. Report to the extent feasible and practicable all
significant types of off-balance sheet assets not covered in other items of this schedule.
Exclude all items which are required to be reported as assets on the balance sheet of the
Consolidated Report of Condition (Schedule RC), contingent assets arising in connection with
litigation in which the reporting bank is involved, and assets held in or administered by the
reporting bank's trust department.
Report only the aggregate amount of those types of "other off-balance sheet assets" that
individually exceed 10 percent of the bank's total equity capital reported in Schedule RC,
item 27.a. If the bank has no types of "other off-balance sheet assets" that individually
exceed 10 percent of total equity capital for which the reporting is feasible and practicable,
report a zero.
NOTE: items 10.b through 10.e are to be reported semiannually in the June and December reports only.
.
Disclose in items 10.b through 10.e each type of "other off-balance sheet assets" reportable
in this item, and dollar amount of the off-balance sheet asset, that individually exceeds
25 percent of the bank's total equity capital reported in Schedule RC, item 27.a. For each
type of off-balance sheet asset that exceeds this disclosure threshold, describe the asset with
a clear and concise caption in items 10.b through 10.e. These descriptions should not
exceed 50 characters in length (including space between words).
Include as "other off-balance sheet assets" such items as:
(1) Contracts for the sale of 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 SU, item 1), and accounted for
on a settlement-date basis.
(2) Internally developed intangible assets.
NOTE: Items 11.a and 11.b are to be reported semiannually in the June and December reports only.
11
Year-to-date merchant credit card sales volume. Merchant processing is the settlement of
credit card transactions for merchants. It is a separate and distinct business line from credit
card issuing. Merchant processing activity involves obtaining authorization for credit card
sales transactions, gathering sales information from the merchant, collecting funds from the
card-issuing bank or business, and crediting the merchants' accounts for their sales.
An acquiring bank is a bank that initiates and maintains contractual agreements with
merchants, agent banks, and third parties (e.g., independent sales organizations and
member service providers) for the purpose of accepting and processing credit card
transactions. An acquiring bank has liability for chargebacks for the merchants' sales activity.
FFIEC 051
RC-L-8
(6-18)
RC-L – OFF-BALANCE SHEET ITEMS
FFIEC 051
RC-L – OFF-BALANCE SHEET ITEMS
Item No.
Caption and Instructions
11
(cont.)
An agent bank with risk is a bank that, by agreement, participates in another bank’s merchant
credit card acceptance program. An agent bank with risk assumes liability for chargebacks for
all or a portion of the loss for the merchants' sales activity.
For purposes of items 11.a and 11.b, banks should include credit card sales transactions
involving bank credit cards, e.g., MasterCard and Visa.
11.a
Sales for which the reporting bank is the acquiring bank. Report the year-to-date volume
of sales generated through the bank's merchant processing activities where the reporting
bank is the acquiring bank. This will include amounts processed for merchants contracted
directly by the acquiring bank, amounts processed for agent banks with risk, and amounts
processed for third parties (e.g., independent sales organizations and member service
providers). Banks that are required to report sales data to the credit card associations of
which they are members (e.g., MasterCard and Visa) should measure sales volume in the
same manner for purposes of this item.
11.b
Sales for which the reporting bank is the agent bank with risk. Report the year-to-date
volume of sales generated through the bank's merchant processing activities where the
reporting bank is acting as an agent bank with risk. Include all sales transactions for which
the acquiring bank with whom the reporting bank contracted may hold the bank responsible.
FFIEC 051
RC-L-9
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FFIEC 051
RC-M - MEMORANDA
SCHEDULE RC-M – MEMORANDA
Item No.
1
Caption and Instructions
Extensions of credit by the reporting bank to its executive officers, directors,
principal shareholders, and their related interests as of the report date. For purposes
of this item, the terms "extension of credit," "executive officer," "director," "principal
shareholder," and "related interest" are as defined in Federal Reserve Board Regulation O
and 12 U.S.C. 375b(9)(D).
An "extension of credit" is a making or renewal of any loan, a granting of a line of credit, or an
extending of credit in any manner whatsoever. Extensions of credit include, among others,
loans, overdrafts, cash items, standby letters of credit, and securities purchased under
agreements to resell. For lines of credit, the amount to be reported as an extension of credit
is normally the total amount of the line of credit extended to the insider, not just the current
balance of the funds that have been advanced to the insider under the line of credit. An
extension of credit also includes having a credit exposure arising from a derivative
transaction, repurchase agreement, reverse repurchase agreement, securities lending
transaction, or securities borrowing transaction. See Section 215.3 of Regulation O and
12 U.S.C. 375b(9)(D)(i) for further details.
An "executive officer" of the reporting bank generally means a person who participates or has
authority to participate (other than in the capacity of a director) in major policymaking
functions of the reporting bank, an executive officer of a bank holding company of which the
bank is a subsidiary, and (unless properly excluded by the bank's board of directors or
bylaws) an executive officer of any other subsidiary of that bank holding company. See
Section 215.2(e) of Regulation O for further details.
A "director" of the reporting bank generally means a person who is a director of a bank,
whether or not receiving compensation, a director of a bank holding company of which the
bank is a subsidiary, and (unless properly excluded by the bank's board of directors or
bylaws) a director of any other subsidiary of that bank holding company. See
Section 215.2(d) of Regulation O for further details.
A "principal shareholder" of the reporting bank generally means an individual or a company
(other than an insured bank or foreign bank) that directly or indirectly owns, controls, or has
the power to vote more than ten percent of any class of voting securities of the reporting
bank. See Section 215.2(m) of Regulation O for further details.
A "related interest" means (1) a company (other than an insured bank or a foreign bank) that
is controlled by an executive officer, director, or principal shareholder or (2) a political or
campaign committee that is controlled by or the funds or services of which will benefit an
executive officer, director, or principal shareholder. See Section 215.2(n) of Regulation O.
1.a
Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests. Report the aggregate amount
outstanding as of the report date of all extensions of credit by the reporting bank to all of its
executive officers, directors, and principal shareholders, and to all of the related interests of
its executive officers, directors, and principal shareholders.
Include each extension of credit by the reporting bank in the aggregate amount only one time,
regardless of the number of executive officers, directors, principal shareholders, and related
interests thereof to whom the extension of credit has been made.
FFIEC 051
RC-M-1
(6-18)
RC-M - MEMORANDA
FFIEC 051
Item No.
1.b
RC-M - MEMORANDA
Caption and Instructions
Number of executive officers, directors, and principal shareholders to whom the
amount of all extensions of credit by the reporting bank (including extensions of credit
to related interests) equals or exceeds the lesser of $500,000 or 5 percent of total
capital as defined for this purpose in agency regulations. Report the number of
executive officers, directors, and principal shareholders of the reporting bank to whom the
amount of all extensions of credit by the reporting bank outstanding as of the report date
equals or exceeds the lesser of $500,000 or five percent of total capital as defined for this
purpose in regulations issued by the bank's primary federal bank supervisory authority.
For purposes of this item, the amount of all extensions of credit by the reporting bank to an
executive officer, director, or principal shareholder includes all extensions of credit by the
reporting bank to the related interests of the executive officer, director, or principal
shareholder. Furthermore, an extension of credit made by the reporting bank to more than
one of its executive officers, directors, principal shareholders, or related interests thereof
must be included in full in the amount of all extensions of credit for each such executive
officer, director, or principal shareholder.
2
Intangible assets. Report in the appropriate subitem the carrying amount of intangible
assets. Intangible assets primarily result from business combinations accounted for under
the acquisition method in accordance with ASC Topic 805, Business Combinations (formerly
FASB Statement No. 141(R), “Business Combinations”), from acquisitions of portions or
segments of another institution's business such as mortgage servicing portfolios and credit
card portfolios, and from the sale or securitization of financial assets with servicing retained.
An identifiable intangible asset with a finite life (other than a servicing asset) should be
amortized over its estimated useful life and should be reviewed at least quarterly to determine
whether events or changes in circumstances indicate that its carrying amount may not be
recoverable. If this review indicates that the carrying amount may not be recoverable, the
identifiable intangible asset should be tested for recoverability (impairment) in accordance
with ASC Topic 360, Property, Plant, and Equipment (formerly FASB Statement No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets”). An impairment loss shall
be recognized if the carrying amount of the identifiable intangible asset is not recoverable and
this amount exceeds the asset’s fair value. The carrying amount is not recoverable if it
exceeds the sum of the undiscounted expected future cash flows from the identifiable
intangible asset. An impairment loss is recognized by writing the identifiable intangible asset
down to its fair value (which becomes the new accounting basis of the intangible asset), with
a corresponding charge to expense (which should be reported in Schedule RI, item 7.c.(2)).
Subsequent reversal of a previously recognized impairment loss is prohibited.
An identifiable intangible asset with an indefinite useful life should not be amortized, but
should be tested for impairment at least annually in accordance with ASC Topic 350,
Intangibles-Goodwill and Other (formerly FASB Statement No. 142, “Goodwill and Other
Intangible Assets”).
2.a
FFIEC 051
Mortgage servicing assets. Report the carrying amount of mortgage servicing assets,
i.e., contracts to service loans secured by real estate (as defined for Schedule RC-C, Part I,
item 1, in the Glossary entry for "Loans secured by real estate") under which the estimated
future revenues from contractually specified servicing fees, late charges, and other ancillary
revenues are expected to more than adequately compensate the servicer for performing the
servicing. A mortgage servicing contract is either (a) undertaken in conjunction with selling or
securitizing the mortgages being serviced or (b) purchased or assumed separately. For
mortgage servicing assets accounted for under the amortization method, the carrying amount
is the unamortized cost of acquiring the mortgage servicing contracts, net of any
RC-M-2
(6-18)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
2.a
(cont.)
related valuation allowances. For mortgage servicing assets accounted for under the fair
value method, the carrying amount is the fair value of the mortgage servicing contracts.
Exclude servicing assets resulting from contracts to service financial assets other than loans
secured by real estate (report nonmortgage servicing assets in Schedule RC-M, item 2.c).
For further information, see the Glossary entry for "servicing assets and liabilities."
2.a.(1)
Estimated fair value of mortgage servicing assets. Report the estimated fair value of the
capitalized mortgage servicing assets reported in Schedule RC-M, item 2.a.
According to ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157,
“Fair Value Measurements”), fair value is defined as the price that would be received to sell
an asset in an orderly transaction between market participants in the asset’s principal (or
most advantageous) market at the measurement date. For purposes of this item, the
reporting bank should determine the fair value of mortgage servicing assets in the same
manner that it determines the fair value of these assets for other financial reporting purposes,
consistent with the guidance in ASC Topic 820.
2.b
Goodwill. Report the carrying amount of goodwill as adjusted for any impairment losses
and, if the private company goodwill accounting alternative has been elected, the
amortization of goodwill. Except when this accounting alternative has been elected, goodwill
should not be amortized. However, regardless of whether goodwill is amortized, it must be
tested for impairment as described in the Glossary entry for “goodwill.” See "acquisition
method" in the Glossary entry for "business combinations" for guidance on the recognition
and initial measurement of goodwill acquired in a business combination.
2.c
All other intangible assets. Report the carrying amount of all other specifically identifiable
intangible assets such as core deposit intangibles, favorable leasehold rights, purchased
credit card relationships, and nonmortgage servicing assets.
Purchased credit card relationships represent the right to conduct ongoing credit card
business dealings with the cardholders. In general, purchased credit card relationships are
an amount paid in excess of the value of the purchased credit card receivables. Such
relationships arise when the reporting bank purchases existing credit card receivables and
also has the right to provide credit card services to those customers. Purchased credit card
relationships may also be acquired when the reporting bank purchases an entire depository
institution.
Purchased credit card relationships shall be carried at amortized cost. Management of the
institution shall review the carrying amount at least quarterly, adequately document this
review, and adjust the carrying amount as necessary. This review should determine whether
unanticipated acceleration or deceleration of cardholder payments, account attrition, changes
in fees or finance charges, or other events or changes in circumstances indicate that the
carrying amount of the purchased credit card relationships may not be recoverable. If this
review indicates that the carrying amount may not be recoverable, the intangible asset should
be tested for recoverability, and any impairment loss should be recognized, as described in
the instruction for Schedule RC-M, item 2.
Nonmortgage servicing assets are contracts to service financial assets, other than loans
secured by real estate (as defined for Schedule RC-C, Part I, item 1) under which the
estimated future revenues from contractually specified servicing fees, late charges, and other
ancillary revenues are expected to more than adequately compensate the servicer for
performing the servicing. A nonmortgage servicing contract is either (a) undertaken in
conjunction with selling or securitizing the nonmortgage financial assets being serviced or
(b) purchased or assumed separately. For nonmortgage servicing assets accounted for
under the amortization method, the carrying amount is the unamortized cost of acquiring the
FFIEC 051
RC-M-3
(6-18)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
2.c
(cont.)
nonmortgage servicing contracts, net of any related valuation allowances. For nonmortgage
servicing assets accounted for under the fair value method, the carrying amount is the fair
value of the nonmortgage servicing contracts. For further information, see the Glossary entry
for "servicing assets and liabilities."
2.d
Total. Report the sum of items 2.a, 2.b, and 2.c. This amount must equal Schedule RC,
item 10, "Intangible assets."
3
Other real estate owned. Report in the appropriate subitem the net book value of all real
estate other than (1) bank premises owned or controlled by the bank and its consolidated
subsidiaries (which should be reported in Schedule RC, item 6) and (2) direct and indirect
investments in real estate ventures (which should be reported in Schedule RC, item 9).
Also exclude real estate property collateralizing a fully or partially government-guaranteed
mortgage loan for which the institution has received physical possession and the conditions
specified in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors
(formerly FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings"), were met upon foreclosure. In such a situation, rather than recognizing
other real estate owned upon foreclosure, the institution must recognize a separate “other
receivable,” which should be measured based on the amount of the loan balance (principal
and interest) expected to be recovered from the guarantor. Report such a receivable in
Schedule RC-F, item 6, “All other assets.” For further information, see the Glossary entry for
“Foreclosed assets.”
Do not deduct mortgages or other liens on other real estate owned (report mortgages or other
liens in Schedule RC, item 16, "Other borrowed money"). Amounts reported for other real
estate owned should be reported net of any applicable valuation allowances.
Include as 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 bank has not yet received title to the property.
(b) Real estate collateral underlying a loan when the bank has obtained physical
possession of the collateral. (For further information, see the Glossary entries for
“foreclosed assets” and “troubled debt restructurings.”)
Foreclosed real estate received in full or partial satisfaction of a loan should be recorded
at the fair value less cost to sell of the property at the time of foreclosure. This amount
becomes the "cost" of the foreclosed real estate. When foreclosed real estate is received
in full satisfaction of a loan, the amount, if any, by which the recorded amount of the loan
exceeds the fair value less cost to sell of the property is a loss which must be charged to
the allowance for loan and lease losses at the time of foreclosure. The amount of any
senior debt (principal and accrued interest) to which foreclosed real estate is subject at
the time of foreclosure must be reported as a liability in Schedule RC, item 16, "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
FFIEC 051
RC-M-4
(6-18)
RC-M - MEMORANDA
FFIEC 051
Item No.
3
(cont.)
RC-M - MEMORANDA
Caption and Instructions
asset-by-asset basis. If the fair value of a foreclosed real estate asset minus the
estimated costs to sell the asset is less than the asset's cost, the deficiency must be
recognized as a valuation allowance against the asset which is created through a charge
to expense. The valuation allowance should thereafter be increased or decreased (but
not below zero) through charges or credits to expense for changes in the asset's fair
value or estimated selling costs. (For further information, see the Glossary entries for
"foreclosed assets" and "troubled debt restructurings.")
(2) Foreclosed real estate collateralizing mortgage loans insured or guaranteed by the
Federal Housing Administration (FHA), the Department of Agriculture under the Rural
Development (RD) program (formerly the Farmers Home Administration (FmHA)), or the
Department of Veterans Affairs (VA) or guaranteed by the Secretary of Housing and
Urban Development and administered by the Office of Public and Indian Housing (PIH)
that back Government National Mortgage Association (GNMA) securities, i.e.,
"GNMA loans," if the mortgage loans did not meet the conditions specified in
ASC Subtopic 310-40 requiring recognition of a separate “other receivable.”
(3) Property originally acquired for future expansion but no longer intended to be used for
that purpose.
(4) 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 RC-C and any gain on the sale should be recognized in accordance
with ASC Subtopic 360-20. For further information, see the Glossary entry for
"foreclosed assets."
Property formerly but no longer used for banking may be reported either in this item as "All
other real estate owned" or in Schedule RC, item 6, as "Premises and fixed assets."
3.a
Construction, land development, and other land. Report the net book value of all other
real estate owned in the form of, or for which the underlying real estate consists of, vacant
land (but not farmland), land under development, or structures or facilities under construction,
whether or not development or construction is continuing or has ceased prior to completion.
When construction is substantially completed and the structure or facility is available for
occupancy or use, report the net book value in the subitem below appropriate to the
completed structure or facility.
For further information on the meaning of the term "construction, land development, and other
land" see the instruction to Schedule RC-C, Part I, item 1.a. However, the amount to be
reported in this item should include all other real estate owned in the form of, or for which the
underlying real estate consists of, vacant land, land under development, or structures or
facilities under construction, not just real estate acquired through foreclosure on loans that
were originally reported as "construction, land development, and other land loans" in
Schedule RC-C, Part I, item 1.a.
FFIEC 051
RC-M-5
(6-18)
RC-M - MEMORANDA
FFIEC 051
Item No.
3.b
RC-M - MEMORANDA
Caption and Instructions
Farmland. Report the net book value of all other real estate owned in the form of, or for
which the underlying real estate consists of, farmland.
For further information on the meaning of the term "farmland," see the instruction to
Schedule RC-C, Part I, item 1.b. However, the amount to be reported in this item should
include all other real estate owned in the form of, or for which the underlying real estate
consists of, farmland, not just real estate acquired through foreclosure on loans that were
originally reported as "loans secured by farmland" in Schedule RC-C, Part I, item 1.b.
3.c
1-4 family residential properties. Report the net book value of all other real estate owned
in the form of, or for which the underlying real estate consists of, 1-to-4 family residential
properties.
Include in this item 1-to-4 family residential properties resulting from foreclosures on real
estate collateralizing government-guaranteed 1-to-4 family residential mortgage loans, if the
conditions specified in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by
Creditors (formerly FASB Statement No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructurings"), requiring recognition of a separate “other receivable” were
not met upon foreclosure. (If the specified conditions were met upon foreclosure, report the
separate “other receivable” in Schedule RC-F, item 6, “All other assets.”) For further
information, see the Glossary entry for “foreclosed assets.”
For further information on the meaning of the term "1-4 family residential properties," see the
instruction to Schedule RC-C, Part I, item 1.c. However, the amount to be reported in this
item should include all other real estate owned in the form of, or for which the underlying real
estate consists of, 1-to-4 family residential properties, not just real estate acquired through
foreclosure on loans that were originally reported as "loans secured by 1-4 family residential
properties" in Schedule RC-C, Part I, item 1.c.
3.d
Multifamily (5 or more) residential properties. Report the net book value of all other real
estate owned in the form of, or for which the underlying real estate consists of, multifamily
residential properties.
For further information on the meaning of the term "multifamily residential properties," see
Schedule RC-C, Part I, item 1.d. However, the amount to be reported in this item should
include all other real estate owned in the form of, or for which the underlying real estate
consists of, multifamily residential properties, not just real estate acquired through foreclosure
on loans that were originally reported as "loans secured by multifamily residential properties"
in Schedule RC-C, Part I, item 1.d.
3.e
Nonfarm nonresidential properties. Report the net book value of all other real estate
owned in the form of, or for which the underlying real estate consists of, nonfarm
nonresidential properties.
For further information on the meaning of the term "nonfarm nonresidential properties," see
the instruction to Schedule RC-C, Part I, item 1.e. However, the amount to be reported in this
item should include all other real estate owned in the form of, or for which the underlying real
estate consists of, nonfarm nonresidential properties, not just real estate acquired through
foreclosure on loans that were originally reported as "loans secured by nonfarm
nonresidential properties" in Schedule RC-C, Part I, item 1.e.
3.f
FFIEC 051
Total. Report the sum of items 3.a through 3.e. This amount must equal Schedule RC,
item 7, "Other real estate owned."
RC-M-6
(6-18)
RC-M - MEMORANDA
FFIEC 051
Item No.
RC-M - MEMORANDA
Caption and Instructions
NOTE: Schedule RC-M, item 4, is to be completed only by insured state banks that have received FDIC
approval in accordance with Section 362.3(a) of the FDIC’s regulations to hold certain equity investments
(“grandfathered equity securities”). Other institutions should leave Schedule RC-M, item 4, blank.
4
Cost of equity securities with readily determinable fair values not held for trading.
Report the cost basis of all equity securities with readily determinable fair values not held for
trading that are reported in Schedule RC, item 2.c, not just the cost basis of those equity
securities that are treated as “grandfathered” for purposes of Section 362.3(a) of the FDIC’s
regulations. The cost basis should reflect the effect of any write-downs of equity securities
reported in Schedule RC, item 2.c, resulting from other-than-temporary impairments
recognized by the institution before its adoption of FASB Accounting Standards Update No.
2016-01.
5
Other borrowed money. Report in the appropriate subitem the specified information about
Federal Home Loan Bank advances to and other borrowings by the consolidated bank.
A fixed interest rate is a rate that is specified at the origination of the advance or other
borrowing, is fixed and invariable during the term of the advance or other borrowing, and is
known to both the bank and the creditor. Also treated as a fixed interest rate is a
predetermined interest rate, which is a rate that changes on a predetermined basis during the
term of the advance or other borrowing, with the exact rate of interest over the life of the
advance or other borrowing known with certainty to both the bank and the creditor when the
advance or other borrowing is originated.
A floating 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 to some other variable
criterion the exact value of which cannot be known in advance. Therefore, the exact interest
rate the advance or other borrowing carries at any subsequent time cannot be known at the
time the advance or other borrowing is originated by the bank or subsequently renewed.
When the rate on an advance or other borrowing with a floating rate has reached a
contractual floor or ceiling level, the advance or other borrowing is to be treated as
"fixed rate" rather than as "floating rate" until the rate is again free to float.
Remaining maturity is amount of time remaining from the report date until the final contractual
maturity of an advance or an other borrowing without regard to the advance’s or the
borrowing’s repayment schedule, if any.
Next repricing date is (a) the date the interest rate on an advance or other borrowing with
a floating rate can next change in accordance with the terms of the contract or (b) the
contractual maturity date of the advance or other borrowing, whichever is earlier.
Advances and other borrowings with a fixed rate that are callable at the option of the Federal
Home Loan Bank or other creditor should be reported according to their remaining maturity
without regard to their next call date unless the advance or other borrowing has actually been
called. When an advance or other borrowing with a fixed rate has been called, it should be
reported based on the time remaining until the call date. Advances and other borrowings with
a floating rate that are callable should be reported on the basis of their next repricing date
without regard to their next call date unless the advance or other borrowing has actually been
called. Advances and other borrowings with a floating rate that have been called should be
reported on the basis of their next repricing date or their actual call date, whichever is earlier.
FFIEC 051
RC-M-7
(12-20)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
5
(cont.)
Advances and other borrowings with a fixed rate that are puttable at the option of the bank
should be reported according to their remaining maturity without regard to put dates if the
bank has not exercised the put. If a put on an advance or other borrowing with a fixed rate
has been exercised but the advance or other borrowing has not yet been repaid, the advance
or other borrowing should be reported based on the amount of time remaining until the actual
put date. Advances and other borrowings with a floating rate that are puttable should be
reported on the basis of their next repricing date without regard to their next put date unless
the put has actually been exercised. If a put on an advance or other borrowing with a floating
rate has been exercised but the advance or other borrowing has not yet been repaid, the
advance or other borrowing should be reported on the basis of its next repricing date or its
actual put date, whichever is earlier.
Convertible advances should be reported based on the amount of time until the Federal
Home Loan Bank can next opt to convert the rate on the borrowing to a floating rate or the
contractual maturity date, whichever is earlier.
Other borrowings that are noninterest-bearing should be treated as fixed rate and reported
according to the amount of time remaining until the final contractual maturity.
5.a
Federal Home Loan Bank advances. Report in the appropriate subitem the specified
information about outstanding advances obtained from a Federal Home Loan Bank. As
defined in 12 CFR Section 900.2, an “advance” is “a loan from a [Federal Home Loan] Bank
that is:
(1) Provided pursuant to a written agreement;
(2) Supported by a note or other written evidence of the borrower’s obligation; and
(3) Fully secured by collateral in accordance with the [Federal Home Loan Bank] Act and
part 950 of this chapter.”
Exclude from advances borrowings from a Federal Home Loan Bank in the form of securities
repurchase agreements (report in Schedule RC, item 14.b, “Securities sold under
agreements to repurchase”) and federal funds purchased (report in Schedule RC, item 14.a).
5.a.(1)
Advances with a remaining maturity or next repricing date of. Report the amount of the
bank’s fixed rate advances from a Federal Home Loan Bank in the appropriate subitems
according to the amount of time remaining until their final contractual maturities. Report the
amount of the bank’s floating rate advances from a Federal Home Loan Bank in the
appropriate subitems according to their next repricing dates.
5.a.(1)(a)
One year or less. Report the amount of:
•
•
fixed rate Federal Home Loan Bank advances with a remaining maturity of one year or
less, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
one year or less.
Include all overnight advances in this item.
FFIEC 051
RC-M-8
(12-20)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
5.a.(1)(b)
Over one year through three years. Report the amount of:
•
•
5.a.(1)(c)
Over three years through five years. Report the amount of:
•
•
5.a.(1)(d)
fixed rate Federal Home Loan Bank advances with a remaining maturity of over three
years through five years, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over three years through five years.
Over five years. Report the amount of:
•
•
FFIEC 051
fixed rate Federal Home Loan Bank advances with a remaining maturity of over one year
through three years, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over one year through three years.
fixed rate Federal Home Loan Bank advances with a remaining maturity of over five
years, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over five years.
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FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
5.a.(2)
Advances with a remaining maturity of one year or less. Report all Federal Home Loan
Bank advances with a remaining maturity of one year or less. Include both fixed rate and
floating rate advances with a remaining maturity of one year or less.
The fixed rate advances that should be included in this item will also have been reported by
remaining maturity in Schedule RC-M, item 5.a.(1)(a), above. The floating rate advances
that should be included in this item will also have been reported by next repricing date in
Schedule RC-M, item 5.a.(1)(a), above. However, exclude those floating rate advances
included in Schedule RC-M, item 5.a.(1)(a), with a next repricing date of one year or less that
have a remaining maturity of over one year.
5.a.(3)
5.b
Structured advances. Report the amount of structured Federal Home Loan Bank advances
outstanding. Structured advances are advances containing options. Structured advances
include (1) callable advances, i.e., fixed rate advances that the Federal Home Loan Bank has
the option to call after a specified amount of time, (2) convertible advances, i.e., fixed rate
advances that the Federal Home Loan Bank has the option to convert to floating rate after a
specified amount of time, and (3) puttable advances, i.e., fixed rate advances that the bank
has the option to prepay without penalty on a specified date or dates. Any other advances
that have caps, floors, or other embedded derivatives should also be reported as structured
advances.
Other borrowings. Report in the appropriate subitem the specified information about
amounts borrowed by the consolidated bank:
(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 transferring financial assets in exchange for cash or other consideration (other than
beneficial interests in the transferred assets) in transactions that do not satisfy the criteria
for sale treatment 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) (see the Glossary entry for "transfers of
financial assets" for further information);
(5) by the creation of due bills representing the bank's receipt of payment and similar
instruments, whether collateralized or uncollateralized (see the Glossary entry for
"due bills");
(6) from Federal Reserve Banks;
(7) by overdrawing "due from" balances with depository institutions, except overdrafts
arising in connection with checks or drafts drawn by the reporting bank 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 RC-E until the funds are remitted);
FFIEC 051
RC-M-9
(3-20)
RC-M - MEMORANDA
FFIEC 051
Item No.
]
5.b
(cont.)
RC-M - MEMORANDA
Caption and Instructions
(8)
on purchases of so-called "term federal funds" (as defined in the Glossary entry for
"federal funds transactions");
(9)
on notes and debentures issued by consolidated subsidiaries of the reporting bank;
(10) through mortgages, liens, or other encumbrances on bank premises and other real
estate owned;
(11) for institutions that have not adopted FASB Accounting Standards Update No. 2016-02
(ASU 2016-02) on accounting for leases, through obligations under capital leases, and
for institutions that have adopted ASU 2016-02, through lease liabilities for finance
leases; and
(12) on any other obligation for the purpose of borrowing money not reported elsewhere on
Schedule RC, Balance Sheet, or in Schedule RC-M, item 5.a, “Federal Home Loan
Bank advances.”
Also include any borrowings by an Employee Stock Ownership Plan (ESOP) that the
reporting bank must report as a borrowing on its own balance sheet in accordance with
generally accepted accounting principles. For further information, see ASC Subtopic 718-40,
Compensation-Stock Compensation – Employee Stock Ownership Plans (formerly AICPA
Statement of Position 93-6, Employers' Accounting for Employee Stock Ownership Plans”).
Exclude from other borrowings:
(1) federal funds purchased and securities sold under agreements to repurchase (report in
Schedule RC, items 14.a and 14.b, respectively);
(2) liability for short positions (report in Schedule RC, item 15);
(3) subordinated notes and debentures (report in Schedule RC, item 19); and
(4) for institutions that have adopted FASB Accounting Standards Update No. 2016-02 on
accounting for leases, lease liabilities for operating leases (report in Schedule RC-G,
item 4, “All other liabilities”).
5.b.(1)
Other borrowings with a remaining maturity or next repricing date of. Report the
amount of the bank’s fixed rate other borrowings in the appropriate subitems according to the
amount of time remaining until their final contractual maturities. Report the amount of the
bank’s floating rate other borrowings in the appropriate subitems according to their next
repricing dates.
5.b.(1)(a)
One year or less. Report the amount of:
•
•
fixed rate “Other borrowings” with a remaining maturity of one year or less, and
floating rate “Other borrowings” with a next repricing date occurring in one year or less.
Include in this item those overdrawn “due from” balances with depository institutions that are
reportable as “Other borrowed money,” as described in the instructions to Schedule RC-M,
item 5.b, above.
FFIEC 051
RC-M-10
(3-20)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
5.b.(1)(b)
Over one year through three years. Report the amount of:
•
•
5.b.(1)(c)
Over three years through five years. Report the amount of:
•
•
5.b.(1)(d)
fixed rate “Other borrowings” with a remaining maturity of over three years through five
years, and
floating rate “Other borrowings” with a next repricing date occurring in over three years
through five years.
Over five years. Report the amount of:
•
•
5.b.(2)
fixed rate “Other borrowings” with a remaining maturity of over one year through three
years, and
floating rate “Other borrowings” with a next repricing date occurring in over one year
through three years.
fixed rate “Other borrowings” with a remaining maturity of over five years, and
floating rate “Other borrowings” with a next repricing date occurring in over five years.
Other borrowings with a remaining maturity of one year or less. Report all “Other
borrowings” with a remaining maturity of one year or less. Include both fixed rate and floating
rate borrowings with a remaining maturity of one year or less.
The fixed rate borrowings that should be included in this item will also have been reported by
remaining maturity in Schedule RC-M, item 5.b.(1)(a), above. The floating rate borrowings
that should be included in this item will also have been reported by next repricing date in
Schedule RC-M, item 5.b.(1)(a), above. However, exclude those floating rate borrowings
included in Schedule RC-M, item 5.b.(1)(a), with a next repricing date of one year or less that
have a remaining maturity of over one year.
5.c
Total. Report the sum of items 5.a.(1)(a) through (d) and items 5.b.(1)(a) through (d). This
sum must equal Schedule RC, item 16, “Other borrowed money.”
NOTE: Schedule RC-M, items 6 and 7, are to be completed annually in the December report only.
6
Does the reporting bank sell private label or third party mutual funds and annuities?
Indicate whether the reporting bank currently sells private label or third party mutual funds and
annuities. Place an “X” in the box marked “YES” if the bank, a bank subsidiary or other bank
affiliate, or an unaffiliated entity sells private label or third party mutual funds and annuities:
(1) on bank premises;
(2) from which the bank receives income at the time of the sale or over the duration of the
account (e.g., annual fees, Rule 12b-1 fees or "trailer fees," and redemption fees); or
(3) through the reporting bank's trust department in transactions that are not executed in a
fiduciary capacity (e.g., trustee, executor, administrator, and conservator).
Otherwise, place an “X” in the box marked “NO”.
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
FFIEC 051
RC-M-11
(9-19)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
6
(cont.)
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 bank's or banking organization's customers. A
proprietary product is a product for which the reporting bank or a subsidiary or other affiliate
of the reporting bank 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 bank.
7
Assets under the reporting bank’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 bank or a subsidiary of the bank acts as
investment adviser.
A general description of a proprietary product is included in the instruction to Schedule RC-M,
item 6, above. Proprietary mutual funds and annuities are typically created by large banking
organizations and offered to customers of the banking organization's subsidiary banks.
Therefore, small, independent banks do not normally act as investment advisers for mutual
funds and annuities.
If neither the bank nor any subsidiary of the bank acts as investment adviser for a mutual fund
or annuity, the bank should report a zero in this item.
NOTE: Schedule RC-M, items 8.a, 8.b, and 8.c, are to be completed semiannually in the June and
December reports only. If an institution has any changes in its Internet website addresses or physical
office trade names in the first or third calendar quarter, the institution may, at its option, report its website
addresses or physical office trade names in the March or September report, respectively, rather than
waiting to report this information in the June or December report.
8
Internet website addresses and physical office trade names. Because the Uniform
Resource Locators (URLs) of Internet websites and the physical office trade names reported
in items 8.a, 8.b, and 8.c are publicly available, each institution should ensure that it
accurately reports its URLs and physical office trade names, if any. This information will
assist the FDIC in responding to public inquiries as to whether a particular Internet website or
institution operating under a trade name that accepts or solicits deposits from the public is in
fact operated by an FDIC-insured depository institution. URLs of Internet websites and
physical office trade names should not exceed 75 characters in length.
Examples of URLs are www.bank.com, www.isp.com/bank/, and bank.isp.com. When
entering the URL of an Internet website in items 8.a and 8.b, the URL should not be prefaced
with http:// because this is already included on the form. Do not provide e-mail addresses in
the spaces for URLs of Internet websites.
8.a
Uniform Resource Locator (URL) of the reporting institution’s primary Internet website
(home page), if any. The URL of an institution’s primary Internet website is the URL of the
public-facing website that the institution’s customers or potential customers enter into Internet
browser software in order to find the first page of the institution’s principal website.
If the reporting institution has a primary Internet website or home page, report in this item the
URL of this website or home page (e.g., www.examplebank.com). If the reporting institution
does not have its own website or home page, but information on or functions of the institution
can be accessed through the URL of an affiliate’s website, the URL of that affiliate’s primary
website should be reported in this item.
FFIEC 051
RC-M-12
(9-19)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
8.a
(cont.)
An institution that maintains more than one website that prominently displays the institution’s
legal title should report the URL of the institution’s primary Internet website in this item and
determine whether it should report the URLs of these other websites in Schedule RC-M,
item 8.b, below.
If an institution has no website or home page of its own and the institution cannot be
accessed through the URL of an affiliate’s website, this item should be left blank. Do not
enter such phrases as "Not applicable," "N/A," "None," and "Null."
8.b
URLs of all other public-facing Internet websites that the reporting institution uses to
accept or solicit deposits from the public, if any. If the reporting institution:
(1) Uses one or more trade names (other than its legal title) to accept or solicit deposits
from the public, and directly or indirectly operates one or more public-facing Internet
websites – other than its primary Internet website (home page) reported in
Schedule RC-M, item 8.a, above – to present such trade names to the public, or
(2) Uses any other public-facing Internet websites prominently displaying the institution’s
legal title – other than its primary Internet website (home page) – to accept or solicit
deposits from the public,
the institution should report the URLs of each of its other public-facing websites that it uses to
accept or solicit deposits from the public in the text fields for items 8.b.(1) through 8.b.(10)
and, if necessary, in Schedule RI-E, item 7, “Other explanations.” If an institution has no
additional public-facing Internet websites to report, the text fields for these items should be
left blank. Do not enter such phrases as "Not applicable," "N/A," "None," and "Null."
When reporting the URLs for public-facing websites used to accept or solicit deposits, report
only the highest level URLs. For example, an institution with a legal title of XYZ Bank reports
in item 8.a that the URL of its primary Internet website is www.xyzbank.com. The institution
also solicits deposits using the website address www.safeandsoundbank.com and provides
more specific deposit information at “www.safeandsoundbank.com/checking” and
“www.safeandsoundbank.com/CDs.” Only the first of these three URLs
(i.e., “www.safeandsoundbank.com”) should be reported in this item.
When an institution uses multiple top level domains (e.g., .com, .net, and .biz), it should
separately report the URLs that are otherwise the same except for the top level domain
name. For example, if XYZ Bank also uses the website address “www.xyzbank.biz” in the
solicitation of deposits, it should report this URL in this item.
However, if an institution uses one or more URLs that automatically redirect the public to the
institution’s primary website or to another website used to accept or solicit deposits that is
being reported in this item, the institution should not report these additional URLs. For
example, if XYZ Bank uses the URLs “www.xyzbank.net” and “www.safeandsoundbank.net”
to automatically redirect the public to “www.xyzbank.com” (reported in item 8.a as its primary
website) and “www.safeandsoundbank.com” (reported in this item as the URL of another
website the institution uses), respectively, it should not report the two redirecting URLs in this
item.
Do not report the URLs of:
(1) Public-facing Internet websites operated by the reporting institution that do not accept or
solicit deposits from the public. For example, if XYZ Bank uses the website address
“www.xyzautoloans.com” but does not accept or solicit deposits through this site, its URL
should not be reported in this item;
FFIEC 051
RC-M-13
(12-19)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
8.b
(cont.)
(2) Internet websites of any non-bank affiliates or subsidiaries that do not accept or solicit
deposits from the public on behalf of the institution;
(3) Affiliated, separately chartered insured depository institutions;
(4) Foreign affiliates; and
(5) Third-party deposit listing services and deposit brokers.
8.c
Trade names other than the reporting institution’s legal title used to identify one or
more of the institution’s physical offices at which deposits are accepted or solicited
from the public, if any. An institution may use a trade name other than its legal title as
reflected in its charter to identify certain of its physical offices, for example, due to a merger
and an interest in maintaining the presence of the acquired institution’s well recognized name
in the community or communities it served.
If the reporting institution operates one or more physical offices to conduct banking activities
and uses one or more trade names other than its legal title to identify these physical offices
(for example, via signage displayed on the facilities), the institution should report each trade
name used by one or more of its physical offices at which it accepts or solicits deposits
from the public in the text fields for items 8.c.(1) through 8.c.(6) and, if necessary, in
Schedule RI-E, item 7, “Other explanations.” Do not report the trade names used by any
physical offices of the reporting institution at which the institution does not accept or solicit
deposits from the public. In addition, do not report the physical office trade names of any
non-bank affiliates or subsidiaries that do not accept or solicit deposits from the public on
behalf of the institution. Do not report the physical office trade names of affiliated, separately
chartered insured depository institutions. If an institution does not use any trade names other
than its legal title, the text fields for items 8.c.(1) through 8.c.(6) should be left blank. Do not
enter such phrases as "Not applicable," "N/A," "None," and "Null."
For example, an institution with a legal title of XYZ Bank operates one or more branch offices
under the trade name of “Community Bank of ABC” (as identified by the signage displayed on
each facility) where it accepts and solicits deposits from the public. XYZ Bank should report
this trade name (and any other trade names it uses at other physical office locations where it
accepts or solicits deposits) in this item 8.c. XYZ Bank also has a loan production office that
operates under the trade name of “XYZ Consumer Loans” and a mortgage lending subsidiary
that operates physical offices using the trade name of “XYZ Mortgage Company”; deposits
are not accepted nor solicited on behalf of XYZ Bank at these physical offices. Thus, neither
of these two trade names should be reported in this item 8.c.
NOTE: Schedule RC-M, item 9, is to be completed annually in the December report only.
9
Do any of the bank’s Internet websites have transactional capability, i.e., allow the
bank’s customers to execute transactions on their accounts through the website?
Indicate whether any of the reporting bank’s Internet websites have transactional capability.
Place an “X” in the box marked “Yes” if the bank or a bank affiliate has any Internet websites
that allow the bank’s customers to execute transactions on their accounts through the website.
Otherwise, place an “X” in the box marked “No.”
The Internet Web address of the website (or sites) with transactional capability does not have
to be the address of the bank’s primary Internet website that is reported in Schedule RC-M,
item 8.a, above.
10
FFIEC 051
Secured liabilities. Report in the appropriate subitem the carrying amount of federal funds
purchased and “Other borrowings” that are secured, i.e., the carrying amount of these types
of liabilities for which the bank (or a consolidated subsidiary) has pledged securities, loans, or
other assets as collateral.
RC-M-14
(12-19)
RC-M - MEMORANDA
FFIEC 051
Item No.
RC-M - MEMORANDA
Caption and Instructions
10.a
Amount of “Federal funds purchased” that are secured. Report the carrying amount of
federal funds purchased (as defined for Schedule RC, item 14.a) that are secured.
10.b
Amount of “Other borrowings” that are secured. Report the carrying amount of “Other
borrowings” (as defined for Schedule RC-M, item 5.b) that are secured. Secured “Other
borrowings” include, but are not limited to, transfers of financial assets accounted for as
financing transactions because they do not satisfy the criteria for sale accounting 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),
mortgages payable on bank premises and other real estate owned, and obligations under
capitalized leases.
NOTE: Schedule RC-M, items 11 and 12, are to be completed annually in the December report only.
11
Does the bank act as trustee or custodian for Individual Retirement Accounts, Health
Savings Accounts, and other similar accounts? Indicate whether the institution acts as
trustee or custodian for Individual Retirement Accounts (IRAs), Health Savings Accounts
(HSAs), or other similar accounts. Other similar accounts include Roth IRAs, Coverdell
Education Savings Accounts, and Archer Medical Savings Accounts. State-chartered
institutions are allowed, under certain circumstances, to act as trustee or custodian for these
types of accounts without obtaining trust powers. In addition, national banks can serve as
custodian to IRAs, HSAs, and other similar accounts without obtaining trust powers. Place an
“X” in the box marked “Yes” if the reporting institution acts as trustee or custodian for these
types of accounts, regardless of whether it has trust powers. Otherwise, place an “X” in the
box marked “No.”
12
Does the bank provide custody, safekeeping, or other services involving the
acceptance of orders for the sale or purchase of securities? Indicate whether the
institution takes orders from customers for the sale or purchase of securities, regardless of
whether this activity occurs in a custody or safekeeping account or elsewhere in the
institution as an accommodation to the customer. Place an “X” in the box marked “Yes” if the
reporting institution takes securities sale or purchase orders from customers. Otherwise,
place an “X” in the box marked “No.”
For example, if the only persons accepting customers’ orders for securities are licensed dual
employees (i.e., individuals who are both employees of the bank and licensed
representatives of a registered broker-dealer) who take orders under a third-party networking
arrangement with a registered broker, the employees would be accepting the orders in their
capacity as registered representatives of the broker and not in their capacity as bank
employees. In this situation, the bank should place an “X” in the box marked “No.”
13
Not applicable.
NOTE: Schedule RC-M, items 14.a and 14.b, are to be completed annually in the December report only.
14
Captive insurance and reinsurance subsidiaries:
14.a
Total assets of captive insurance subsidiaries. Report the carrying amount of all assets
held by consolidated captive insurance subsidiaries of the reporting bank. A captive
insurance company is a limited purpose insurer licensed as a direct writer of insurance.
Some common lines of business include credit life, accident, and health insurance; disability
FFIEC 051
RC-M-15
(3-17)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
14.a
(cont.)
insurance; and employee benefits coverage. Report total assets before eliminating
intercompany transactions between the consolidated insurance subsidiary and other offices
or subsidiaries of the consolidated bank.
14.b
Total assets of captive reinsurance subsidiaries. Report the carrying amount of all assets
held by consolidated captive reinsurance subsidiaries of the reporting bank. Reinsurance is
the transfer, with indemnification, of all or part of the underwriting risk from one insurer to
another for a portion of the premium or other consideration.
Some common lines of business include credit life, accident, and health reinsurance;
disability reinsurance; reinsurance of employee benefits coverage; private mortgage guaranty
reinsurance; and terrorism risk reinsurance. Report total assets before eliminating
intercompany transactions between the consolidated reinsurance subsidiary and other offices
or subsidiaries of the consolidated bank.
15
Qualified Thrift Lender (QTL) test. Items 15.a and 15.b are to be completed by all
savings associations and by those state savings banks and cooperative banks that have
applied and have been permitted, under Section 10(l) of the Home Owners’ Loan Act (HOLA)
(12 U.S.C. 1467a(l)), to be deemed a savings association for purposes of holding company
regulation.
The QTL test has been in place since it was enacted as part of the Competitive Equality
Banking Act of 1987. To be a QTL, a savings association (or a state savings or cooperative
bank that has elected to be treated as a QTL) must either meet the HOLA QTL test
(12 U.S.C. 1467a(m)) or the Internal Revenue Service (IRS) Domestic Building and Loan
Association (DBLA) test (26 CFR 301.7701-13A). Under the HOLA QTL test, an institution
must hold “Qualified Thrift Investments” equal to at least 65 percent of its portfolio assets.
To be a QTL under the IRS DBLA test, an institution must meet a “business operations test”
and a “60 percent of assets test.” An institution may use either test to qualify and may switch
from one test to the other. However, the institution must meet the time requirements of the
respective test, which is:
•
•
Nine out of the last 12 months for the HOLA QTL test, and
The taxable year (which may be either a calendar or fiscal year) for the IRS DBLA test.
A savings association (or a state savings or cooperative bank that has elected to be treated
as a QTL) that fails to meet the QTL requirements is subject to certain restrictions, including
limits on activities, branching, and dividends.
15.a
Does the institution use the Home Owners’ Loan Act (HOLA) QTL test or the Internal
Revenue Service Domestic Building and Loan Association (IRS DBLA) test to
determine its QTL compliance? Indicate the test that the reporting institution uses to
determine its compliance with the QTL requirements. For the HOLA QTL test, enter the
number “1”; for the IRS DBLA test, enter the number “2.”
15.b
Has the institution been in compliance with the HOLA QTL test as of each month end
during the quarter or the IRS DBLA test for its most recent taxable year, as applicable?
Indicate whether the reporting institution has been in compliance with the HOLA QTL test as
of each month end during the quarter ending with the report date or the IRS DBLA test for its
most recent taxable year, as applicable. Place an “X” in the box marked “Yes” if the
institution has been in compliance with the applicable test for the specified period.
Otherwise, place an “X” in the box marked “No.”
FFIEC 051
RC-M-16
(3-17)
RC-M - MEMORANDA
FFIEC 051
Item No.
16
RC-M - MEMORANDA
Caption and Instructions
International remittance transfers offered to consumers. Report in Schedule RC-M,
items 16.a through 16.d, information about international electronic transfers of funds offered
to consumers in the United States that:
(1) Are “remittance transfers” as defined by Subpart B of Regulation E (12 CFR
§ 1005.30(e)), or
(2) Would qualify as “remittance transfers” under Subpart B of Regulation E (12 CFR
§ 1005.30(e)), but are excluded from that definition only because the provider is not
providing those transfers in the normal course of its business. See 12 CFR § 1005.30(f).
For purposes of items 16.a through 16.d, such transfers are referred to as international
remittance transfers.
Under Subpart B of Regulation E, which took effect on October 28, 2013, a ‘‘remittance
transfer’’ is an electronic transfer of funds requested by a sender to a designated recipient
that is sent by a remittance transfer provider. The term applies regardless of whether the
sender holds an account with the remittance transfer provider, and regardless of whether the
transaction is also an “electronic fund transfer,” as defined in Regulation E. See 12 CFR §
1005.30(e).
A “sender” is a consumer in a State who primarily for personal, family, or household purposes
requests a remittance transfer provider to send a remittance transfer to a designated
recipient. See 12 CFR § 1005.30(g).
A “designated recipient” is any person specified by the sender as the authorized recipient of a
remittance transfer to be received at a location in a foreign country. See 12 CFR § 1005.30(c).
A “remittance transfer provider” is any person that provides remittance transfers for a
consumer in the normal course of its business, regardless of whether the consumer holds an
account with such person. See 12 CFR § 1005.30(f).
Examples of “remittance transfers” include the following (see Regulation E, Subpart B,
comment 30(e)-3.i):
(1) Transfers where the sender provides cash or another method of payment to a money
transmitter or financial institution and requests that funds be sent to a specified location
or account in a foreign country.
(2) Consumer wire transfers, where a financial institution executes a payment order upon a
sender’s request to wire money from the sender’s account to a designated recipient.
(3) An addition of funds to a prepaid card by a participant in a prepaid card program, such as
a prepaid card issuer or its agent, that is directly engaged with the sender to add these
funds, where the prepaid card is sent or was previously sent by a participant in the
prepaid card program to a person in a foreign country, even if a person located in a State
(including a sender) retains the ability to withdraw such funds.
(4) International automated clearing house (ACH) transactions sent by the sender’s financial
institution at the sender’s request.
(5) Online bill payments and other electronic transfers that a sender schedules in advance,
including preauthorized remittance transfers, made by the sender’s financial institution at
the sender’s request to a designated recipient.
FFIEC 051
RC-M-17
(3-17)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
16
(cont.)
Under Subpart B of Regulation E, the term “remittance transfer” does not include, for
example:
(1) Small value transactions, i.e., transfer amounts, as described in 12 CFR
§ 1005.31(b)(1)(i), of $15 or less. See 12 CFR § 1005.30(e)(2)(i).
(2) Securities and commodities transfers that are excluded from the definition of electronic
fund transfer under 12 CFR § 1005.3(c)(4). See 12 CFR § 1005.30(e)(2)(ii).
(3) A consumer’s provision of a debit, credit or prepaid card, directly to a foreign merchant as
payment for goods or services because the issuer is not directly engaged with the sender
to send an electronic transfer of funds to the foreign merchant when the issuer provides
payment to the merchant. See Regulation E, Subpart B, comment 30(e)-3.ii.A.
(4) A consumer’s deposit of funds to a checking or savings account located in a State,
because there has not been a transfer of funds to a designated recipient. See
Regulation E, Subpart B, comment 30(e)-3.ii.B.
(5) Online bill payments and other electronic transfers that senders can schedule in advance,
including preauthorized transfers, made through the Web site of a merchant located in a
foreign country and via direct provision of a checking account, credit card, debit card or
prepaid card number to the merchant, because the financial institution is not directly
engaged with the sender to send an electronic transfer of funds to the foreign merchant
when the institution provides payment to the merchant. See Regulation E, Subpart B,
comment 30(e)-3.ii.C.
NOTE: Schedule RC-M, item 16.a, is to be completed by all institutions semiannually in the June and
December reports only.
16.a
As of the report date, did your institution offer to consumers in any state any of the
following mechanisms for sending international remittance transfers? Indicate in the
boxes marked “Yes” and “No” whether, as of the report date, your institution offered to
consumers in any state any of the specified mechanisms for sending international remittance
transfers.
16.a.(1)
International wire transfers. Indicate in the boxes marked “Yes” and “No” whether, as of
the report date, your institution offered international wire transfers to consumers in any state.
Mark “Yes” for this item only if your institution offered international wire transfers as the
provider to the consumer. For purposes of responding to this question, do not consider (a)
services in which your institution sent international wire transfers as a correspondent bank for
another institution, or (b) services in which your institution was an agent for another provider
of international wire transfers.
16.a.(2)
International ACH transactions. Indicate in the boxes marked “Yes” and “No” whether,
as of the report date, your institution offered international automated clearing house (ACH)
transactions to consumers in any state. Mark “Yes” for this item only if your institution offered
international ACH transactions as the provider to the consumer. For purposes of responding
to this question, do not consider (a) services in which your institution sent international ACH
transactions as a correspondent bank for another institution, or (b) services in which your
institution was an agent for another provider of international ACH transactions.
16.a.(3)
Other proprietary services operated by your institution. Indicate in the boxes marked
“Yes” and “No” whether, as of the report date, your institution offered other proprietary
services operated by your institution to consumers in any state. Other proprietary services
operated by your institution are any international remittance transfer services— other than
international wire transfers or international ACH transactions—for which your institution is the
FFIEC 051
RC-M-18
(3-17)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
16.a.(3)
(cont.)
provider. These types of services may include cash-based transfers, bill payment services,
prepaid card services, or other services that qualify as international remittance transfer
services.
Proprietary services operated by your institution also include international remittance transfer
services that use international wire transfers or international ACH transactions to assist in
clearing and settlement of the remittance transfers if your institution, as the provider, directly
or indirectly, exercises a degree of control over the terms of service governing the
international remittance transfers that is greater than the degree of control exercised in what
your institution considers typical consumer international wires or consumer international ACH
transactions. Such services would not be considered “international wire” or “international
ACH” services for purposes of this item 16.a.
Mark “Yes” for this item only if your institution offered any such services as the provider to the
consumer. For purposes of responding to this question, do not consider (a) services in which
your institution sent transfers as a correspondent bank for another institution, or (b) services
in which your institution was an agent for another provider of international remittance
transfers.
16.a.(4)
Other proprietary services operated by another party. Indicate in the boxes marked
“Yes” and “No” whether, as of the report date, your institution offered other proprietary
services operated by another party to consumers in any state. Other proprietary services
operated by another party are any international remittance transfer services for which an
entity other than your institution was the provider. These types of services may include wire
transfers, international ACH transactions, cash-based transfers, bill payment services,
prepaid card services, or others that qualify as international remittance transfer services.
Mark “Yes” for this item only if another institution was the provider to the consumer and your
institution was acting as an agent or similar type of business partner that offers services to
consumers sending international remittance transfers. For purposes of responding to this
question, do not consider (a) services in which your institution sent international remittance
transfers as a correspondent bank for another institution, (b) services for which your
institution was the provider to the consumer.
.
NOTE: Schedule RC-M, item 16.b, is to be completed by all institutions annually in the June report only.
16.b
Did your institution provide more than 100 international remittance transfers in the
previous calendar year or does your institution estimate that it will provide more than
100 international remittance transfers in the current calendar year? Indicate your
institution’s response to this question in the boxes marked “Yes” and “No.” Mark “Yes” for
this item if your institution satisfies either of the criteria listed in the question. In other words,
mark “Yes” if your institution provided more than 100 international remittance transfers in the
previous calendar year (regardless of how many transfers your institution estimates that it will
provide in the current calendar year). Also mark “Yes” if your institution estimates that it will
provide more than 100 international remittance transfers in the current calendar year
(regardless of how many transfers your institution provided in the previous calendar year).
Any estimates should be based on a reasonable and supportable estimation methodology.
An international remittance transfer should be counted as the date of the transfer. Count only
international remittance transfers for which your institution is the provider. Do not count or
estimate remittance transfers that your institution sent as an agent or a correspondent bank
for another provider.
FFIEC 051
RC-M-19
(3-17)
RC-M - MEMORANDA
FFIEC 051
Item No.
RC-M - MEMORANDA
Caption and Instructions
NOTE: Schedule RC-M, item 16.c, is to be completed by institutions that answered “Yes” to
Schedule RC-M, item 16.b, in the current report, or, if item 16.b is not required to be completed in the
current report, in the most recent prior report in which item 16.b was required to be completed.
Schedule RC-M, item 16.c, is to be completed semiannually in the June and December reports only.
16.c
Indicate which of the mechanisms described in items 16.a.(1), (2), and (3) above is
the mechanism that your institution estimates accounted for the largest number of
international remittance transfers that your institution provided during the two
calendar quarters ending on the report date. Consider whether your institution marked
“Yes” in its responses to items 16.a.(1), (2), or (3) above. If you marked “Yes” in response to
any of these subitems, estimate which of the three listed mechanisms accounted for the
greatest number of international remittance transfers that your institution provided during the
two calendar quarters ending on the report date: for international wire transfers, enter the
number “1”; for international ACH transactions, enter the number “2”; for other proprietary
services operated by your institution, enter the number “3”. If your institution did not provide
any international remittance transfers using the mechanisms described in items 16.a.(1), (2),
or (3) above during the two calendar quarters ending on the report date, enter the number
“0.”
NOTE: Schedule RC-M, item 16.d, is to be completed by institutions that answered “Yes” to
Schedule RC-M, item 16.b, in the current report, or, if item 16.b is not required to be completed in the
current report, in the most recent prior report in which item 16.b was required to be completed.
Schedule RC-M, item 16.d, is to be completed semiannually in the June and December reports only.
16.d
Estimated number and dollar value of international remittance transfers provided by
your institution during the two calendar quarters ending on the report date. Estimates
should be based on a reasonable and supportable methodology. Estimated figures should
include only international remittance transfers for which your institution was the provider. Do
not count transfers for which another entity was the provider and your institution sent the
transfer as a correspondent bank or agent for the other provider. An international remittance
transfer should be counted as of the date of the transfer. The estimate should cover
international remittance transfers provided during the two calendar quarters ending on the
report date.
16.d.(1)
Estimated number of international remittance transfers. Report the estimated number of
international remittance transfers that your institution provided during the two calendar
quarters ending on the report date.
16.d.(2)
Estimated dollar value of international remittance transfers. Report the estimated dollar
value of international remittance transfers that your institution provided during the two
calendar quarters ending on the report date. The dollar value is not required to be estimated
in thousands of dollars. In other words, if an estimate is in the millions of dollars, the
institution may report zeros for the thousands of dollars.
16.d.(3)
Estimated number of international remittance transfers for which your institution
applied the temporary exception. Report the estimated number of international
remittance transfers that your institution provided during the two calendar quarters ending
on the report date for which your institution applied the temporary exception set forth in
12 CFR § 1005.32(a) under which insured institutions may provide estimates for certain
disclosures in some instances.
FFIEC 051
RC-M-20
(3-17)
RC-M - MEMORANDA
FFIEC 051
RC-N - PAST DUE
SCHEDULE RC-N – PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
General Instructions
Report on a fully consolidated basis all loans, leases, debt securities, and other assets that are past due
or are in nonaccrual status, regardless of whether such credits are secured or unsecured and regardless
of whether such credits are guaranteed or insured by the U.S. Government or by others.
For assets that are past due or in nonaccrual status, institutions that have not adopted FASB Accounting
Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit losses, should
report the balance sheet amount of the asset in Schedule RC-N, i.e., the amount at which the asset is
reported in the applicable asset category on Schedule RC, Balance Sheet (e.g., in item 4.b, “Loans and
leases held for investment”), not simply the asset’s delinquent payments.
For assets that are past due or in nonaccrual status, institutions that have adopted ASU 2016-13 should
report the balance sheet amount of the asset in Schedule RC-N without deducting any applicable
allowance for credit losses, not simply the asset’s delinquent payments. For example, the amount to be
reported in Schedule RC-N for a past due or nonaccrual loan held for investment should equal the
amount at which the loan is reported in Schedule RC, Balance Sheet, item 4.b, “Loans and leases held
for investment.” The amount to be reported in Schedule RC-N, item 10, for a past due or nonaccrual
held-to-maturity debt security should equal the amortized cost at which the debt security is reported in
Schedule RC-B, Securities, column A.
Loan amounts should be reported net of unearned income to the extent that they are reported net of
unearned income in Schedule RC-C. All lease, debt security, and other asset amounts must be reported
net of unearned income.
For purposes of these reports, “GNMA loans” are residential mortgage loans insured or guaranteed by
the Federal Housing Administration (FHA), the Department of Agriculture Rural Development (RD)
program (formerly the Farmers Home Administration (FmHA)), or the Department of Veterans Affairs (VA)
or guaranteed by the Secretary of Housing and Urban Development and administered by the Office of
Public and Indian Housing (PIH) that back Government National Mortgage Association (GNMA)
securities. When an institution services GNMA loans after it has securitized the loans in a transfer
accounted for as a sale, 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) requires the institution to bring individual delinquent GNMA loans that it previously accounted
for as sold back onto its books as loan assets when, under the GNMA Mortgage-Backed Securities
Guide, the loan meets GNMA's specified delinquency criteria and is eligible for repurchase. This
rebooking of GNMA loans is required regardless of whether the institution, as seller-servicer, intends to
exercise the repurchase (buy-back) option. A seller-servicer must report all delinquent rebooked GNMA
loans that have been repurchased or are eligible for repurchase as past due in Schedule RC-N in
accordance with their contractual repayment terms. In addition, if an institution services GNMA loans, but
was not the transferor of the loans that were securitized, and purchases individual delinquent loans out of
the GNMA securitization, the institution must report the purchased loans as past due in Schedule RC-N in
accordance with their contractual repayment terms even though the institution was not required to record
the delinquent GNMA loans as assets prior to purchasing the loans. Such delinquent GNMA loans
should be reported in items 1.c, 11, and 11.b of Schedule RC-N.
FFIEC 051
RC-N-1
(3-19)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Definitions
Past Due – The past due status of a loan or other asset should be determined in accordance with its
contractual repayment terms. For purposes of this schedule, grace periods allowed by the bank after a
loan or other asset 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, leases, debt securities, and
other assets 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. (At a bank's option, loans and leases with
payments scheduled monthly may be reported as past due when one scheduled payment is due and
unpaid for 30 days or more.) 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 credit cards, 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, debt securities, and other assets 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, debt securities, and other assets 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, banks should use one of two methods to recognize partial payments on
“retail credit,” i.e., open-end and closed-end 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 payment may be considered a full payment in computing
delinquency. Alternatively, a bank 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 bank may use either or both methods for its retail credit, but may not
use both methods simultaneously with a single loan.
For institutions that have not adopted ASU 2016-13, when accrual of income on a purchased creditimpaired loan accounted for individually or a purchased credit-impaired debt security is appropriate, the
delinquency status of the individual asset should be determined in accordance with its contractual
repayment terms for purposes of reporting the amount of the loan or debt security as past due in the
appropriate items of Schedule RC-N, column A or B. When accrual of income on a pool of purchased
credit-impaired loans with common risk characteristics is appropriate, delinquency status should be
determined individually for each loan in the pool in accordance with the individual loan’s contractual
repayment terms for purposes of reporting the amount of individual loans within the pool as past due in
the appropriate items of Schedule RC-N, column A or B. For further information, see the Glossary entry
for “purchased credit-impaired loans and debt securities.”
For institutions that have adopted ASU 2016-13, any purchased credit-impaired loans and debt securities
held as of the adoption date of the standard should prospectively be accounted for as purchased creditdeteriorated assets. As of the adoption date of the standard, the remaining noncredit discount or
premium on a purchased credit-deteriorated asset, after the adjustment for the allowance for credit
FFIEC 051
RC-N-2
(3-19)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Definitions (cont.)
losses, should be accreted to interest income at the new effective interest rate on the asset, if the asset is
not required to be placed on nonaccrual. For purchased credit-deteriorated loans, debt securities, and
other financial assets that fall within the scope of ASU 2016-13, nonaccrual status should be determined
and subsequent nonaccrual treatment, if appropriate, should be applied in the same manner as for other
financial assets held by an institution.
Nonaccrual – For purposes of this schedule, an asset is to be reported as being in nonaccrual status if:
(1) It is maintained on a cash basis because of deterioration in the financial condition of the borrower,
(2) Payment in full of principal or interest is not expected, or
(3) Principal or interest has been in default for a period of 90 days or more unless the asset is both well
secured and in the process of collection.
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. An asset is
"in the process of collection" if collection of the asset 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 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 below.
In the following situations, an asset 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 credit-impaired loan, pool of loans, or debt security accounted for in
accordance with that Subtopic, regardless of whether the loan, the loans in the pool, or debt security
had been maintained in nonaccrual status by its seller. (For purchased credit-impaired loans with
common risk characteristics that are aggregated and accounted for as a pool, the determination of
nonaccrual or accrual status should be made at the pool level, not at the individual loan level.) For
further information, see the Glossary entry for "purchased credit-impaired loans and debt securities."
(2) The asset upon which principal or interest is due and unpaid for 90 days or more is a consumer loan
(as defined for Schedule RC-C, Part I, item 6, "Loans to individuals for household, family, and other
personal expenditures") or a loan secured by a 1-to-4 family residential property (as defined for
Schedule RC-C, Part I, item 1.c, Loans "Secured by 1-4 family residential properties"). Nevertheless,
such loans should be subject to other alternative methods of evaluation to assure that the bank's net
income is not materially overstated. To the extent that the bank 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 asset may be restored to accrual status when:
(1) None of its principal and interest is due and unpaid, and the bank expects repayment of the remaining
contractual principal and interest; or
(2) When it otherwise becomes well secured and in the process of collection.
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Definitions (cont.)
For purposes of meeting the first test for restoration to accrual status, the bank must have received
repayment of the past due principal and interest unless, as discussed in the Glossary entry for
"nonaccrual status":
(1) The asset 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 Subtopic 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 contractual 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 in Troubled Debt Restructurings – A troubled debt restructuring is a restructuring of a loan in
which a bank, for economic or legal reasons related to a borrower's financial difficulties, grants a
concession to the borrower that it would not otherwise consider. For purposes of this schedule, the
concession consists of a modification of terms, such as a reduction of the loan’s stated interest rate,
principal, or accrued interest or an extension of the loan’s maturity date at a stated interest rate lower
than the current market rate for new debt with similar risk, regardless of whether the loan is secured or
unsecured and regardless of whether the loan is guaranteed by the government or by others.
Once an obligation has been restructured in a troubled debt restructuring, it continues to be considered a
troubled debt restructuring until paid in full or otherwise settled, sold, or charged off (or meets the
conditions discussed under “Accounting for a Subsequent Restructuring of a Troubled Debt
Restructuring” in the Glossary entry for “troubled debt restructurings). However, if a restructured
obligation is in compliance with its modified terms and the restructuring agreement specifies an interest
rate that at the time of the restructuring is greater than or equal to the rate that the bank was willing to
accept for a new extension of credit with comparable risk, the loan need not continue to be reported as a
troubled debt restructuring 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 troubled debt restructuring. Also, a loan to a third party purchaser of "other real
estate owned" by the reporting bank for the purpose of facilitating the disposal of such real estate is not
considered a troubled debt restructuring.
For further information, see the Glossary entry for "troubled debt restructurings."
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Column Instructions
The columns of Schedule RC-N are mutually exclusive. Any given loan, lease, debt security, or other
asset should be reported in only one of columns A, B, and C. Information reported for any given
derivative contract should be reported in only column A or column B.
Institutions that have adopted ASU 2016-13 should report asset amounts in columns A, B, and C without
any deduction for applicable allowances for credit losses.
Report in columns A and B of Schedule RC-N the balance sheet amounts of (not just the delinquent
payments on) loans, leases, debt securities, and other assets that are past due and upon which the bank
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 scheduled other than monthly when one scheduled payment
is due and unpaid for 30 through 89 days; single payment and demand notes, debt securities, and
other assets providing for payment of interest at stated intervals after one interest payment is due and
unpaid for 30 through 89 days; single payment notes, debt securities, and other assets 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 bank is accruing interest on them, if the
account remains continuously overdrawn for 30 through 89 days.
(2) In column B, report the loans, lease financing receivables, debt securities, and other assets as
specified above on which payment is due and unpaid for 90 days or more.
Include in columns A and B, as appropriate, all loans, leases, debt securities, and other assets which,
subsequent to their restructuring by means of a modification of terms, have become 30 days or more past
due and upon which the bank continues to accrue interest. Exclude from columns A and B all loans,
leases, debt securities, and other assets that are in nonaccrual status.
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Column Instructions (cont.)
Report in column C the balance sheet amounts of loans, leases, debt securities, and other assets that are
in nonaccrual status. Include all restructured loans, leases, debt securities, and other assets that are in
nonaccrual status. However, restructured loans, leases, debt securities, and other assets with a zero
percent effective interest rate are not to be reported in this column as nonaccrual assets.
Item Instructions
The loan and lease category definitions used in Schedule RC-N correspond with the loan and lease
category definitions found in Schedule RC-C, Part I. Consistent with Schedule RC-C, Part I, the categoryby-category breakdown of loans and leases in Schedule RC-N includes (1) loans and leases held for sale
and (2) loans and leases held for investment, i.e., loans and leases that the bank has the intent and ability
to hold for the foreseeable future or until maturity or payoff.
Item No.
Caption and Instructions
1
Loans secured by real estate. Report in the appropriate subitem and column all loans
secured by real estate included in Schedule RC-C, Part I, item 1, that are past due 30 days or
more or are in nonaccrual status as of the report date.
1.a
Construction, land development, and other land loans. Report in the appropriate subitem
and column the amount of all construction, land development, and other land loans included
in Schedule RC-C, Part I, item 1.a, that are past due 30 days or more or are in nonaccrual
status as of the report date.
1.a.(1)
1-4 family residential construction loans. Report in the appropriate column the amount of
all 1-4 family residential construction loans included in Schedule RC-C, Part I, item 1.a.(1),
that are past due 30 days or more or are in nonaccrual status as of the report date.
1.a.(2)
Other construction loans and all land development and other land loans. Report in the
appropriate column the amount of all other construction loans and all land development and
other land loans included in Schedule RC-C, Part I, item 1.a.(2), that are past due 30 days or
more or are in nonaccrual status as of the report date.
1.b
Secured by farmland. Report in the appropriate column the amount of all loans secured by
farmland included in Schedule RC-C, Part I, item 1.b, that are past due 30 days or more or
are in nonaccrual status as of the report date.
1.c
Secured by 1-4 family residential properties. Report in the appropriate subitem and
column the amount of all loans secured by 1-4 family residential properties included in
Schedule RC-C, Part I, item 1.c, that are past due 30 days or more or are in nonaccrual
status as of the report date.
1.c.(1)
FFIEC 051
Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report in the appropriate column the amount outstanding under all
revolving, open-end loans secured by 1-to-4 family residential properties and extended under
lines of credit included in Schedule RC-C, Part I, item 1.c.(1), that are past due 30 days or
more or are in nonaccrual status as of the report date.
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Item No.
Caption and Instructions
1.c.(2)
Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem and column the amount of all closed-end loans secured by 1-to-4 family residential
properties included in Schedule RC-C, Part I, item 1.c.(2), that are past due 30 days or more
or are in nonaccrual status as of the report date.
1.c.(2)(a)
Secured by first liens. Report in the appropriate column the amount of all closed-end loans
secured by first liens on 1-to-4 family residential properties included in Schedule RC-C, Part I,
item 1.c.(2)(a), that are past due 30 days or more or are in nonaccrual status as of the report
date.
1.c.(2)(b)
Secured by junior liens. Report in the appropriate column the amount of all closed-end
loans secured by junior liens on 1-to-4 family residential properties included in
Schedule RC-C, Part I, item 1.c.(2)(b), that are past due 30 days or more or are in nonaccrual
status as of the report date. Include loans secured by junior liens in this item even if the bank
also holds a loan secured by a first lien on the same 1-to-4 family residential property and
there are no intervening junior liens.
1.d
Secured by multifamily (5 or more) residential properties. Report in the appropriate
column the amount of all loans secured by multifamily (5 or more) residential properties
included in Schedule RC-C, Part I, item 1.d, that are past due 30 days or more or are in
nonaccrual status as of the report date.
1.e
Secured by nonfarm nonresidential properties. Report in the appropriate subitem and
column the amount of all loans secured by nonfarm residential properties included in
Schedule RC-C, Part I, item 1.e, that are past due 30 days or more or are in nonaccrual
status as of the report date.
1.e.(1)
Loans secured by owner-occupied nonfarm nonresidential properties. Report in the
appropriate column the amount of loans secured by owner-occupied nonfarm nonresidential
properties included in Schedule RC-C, Part I, item 1.e.(1), that are past due 30 days or more
or are in nonaccrual status as of the report date.
1.e.(2)
Loans secured by other nonfarm nonresidential properties. Report in the appropriate
column the amount of loans secured by other nonfarm nonresidential properties included in
Schedule RC-C, Part I, item 1.e.(2), that are past due 30 days or more or are in nonaccrual
status as of the report date.
2
Loans to depository institutions and acceptances of other banks. Report in the
appropriate column the amount of all loans to depository institutions and acceptances of
other banks included in Schedule RC-C, Part I, item 2, that are past due 30 days or more or
are in nonaccrual status as of the report date.
3
Not applicable.
4
Commercial and industrial loans. Report in the appropriate column the amount of all
commercial and industrial loans included in Schedule RC-C, Part I, item 4, that are past due
30 days or more or are in nonaccrual status as of the report date.
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Item No.
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Caption and Instructions
5
Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem and column the amount of all loans to individuals for household,
family, and other personal expenditures (i.e., consumer loans) included in Schedule RC-C,
Part I, item 6, that are past due 30 days or more or are in nonaccrual status as of the report
date.
5.a
Credit cards. Report in the appropriate column the amount of all extensions of credit to
individuals for household, family, and other personal expenditures arising from credit cards
included in Schedule RC-C, Part I, item 6.a, that are past due 30 days or more or are in
nonaccrual status as of the report date.
5.b
Automobile loans. Report in the appropriate column the amount of loans arising from retail
sales of passenger cars and other vehicles such as minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use included in Schedule RC-C, Part I,
item 6.c, that are past due 30 days or more or are in nonaccrual status as of the report date.
5.c
Other. Report in the appropriate column the amount of all other loans to individuals for
household, family, and other personal expenditures included in Schedule RC-C, Part I,
items 6.b and 6.d, that are past due 30 days or more or are in nonaccrual status as of the
report date.
6
Not applicable.
7
All other loans. Report in the appropriate column the amount of all other loans that cannot
properly be reported in Schedule RC-N, items 1.a through 5.c, above, that are past due 30
days or more or are in nonaccrual status as of the report date. This includes:
•
•
•
•
loans to finance agricultural production and other loans to farmers included in
Schedule RC-C, Part I, item 3;
obligations (other than securities and leases) of states and political subdivisions in the
U.S. included in Schedule RC-C, Part I, item 8;
loans to nondepository financial institutions included in Schedule RC-C, Part I, item 9.a;
and
other loans included in Schedule RC-C, Part I, item 9.b.
8
Lease financing receivables (net of unearned income). Report in the appropriate column
the amount of all lease financing receivables (net of unearned income) included in
Schedule RC-C, Part I, item 10, that are past due 30 days or more or are in nonaccrual status
as of the report date.
9
Total loans and leases. For columns A through C, report the sum of items 1 through 8.
10
Debt securities and other assets. Report in the appropriate column all assets other than
loans and leases reportable in Schedule RC-C that are past due 30 days or more or are in
nonaccrual status as of the report date. Include such assets as debt securities and
interest-bearing balances due from depository institutions. Also include operating lease
payments receivable that have been recorded as assets in Schedule RC, item 11, when the
operating lease is past due 30 days or more or in nonaccrual status.
Exclude other real estate owned reportable in Schedule RC, item 7, and other repossessed
assets reportable in Schedule RC, item 11, such as automobiles, boats, equipment,
appliances, and similar personal property.
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Item No.
11
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Caption and Instructions
Loans and leases reported in items 1 through 8 above that are wholly or partially
guaranteed by the U.S. Government, excluding loans and leases covered by losssharing agreements with the FDIC. Report in the appropriate column the aggregate
amount of all loans and leases reported in Schedule RC-N, items 1 through 8, above for
which repayment of principal is wholly or partially guaranteed or insured by the U.S.
Government, including its agencies and its government-sponsored agencies, but excluding
loans and leases covered by loss-sharing agreements with the FDIC, which are reported in
Schedule SU, item 9. Examples include loans guaranteed by the Small Business
Administration and the Federal Housing Administration. Amounts need not be reported in
this item and in items 11.a and 11.b below if they are considered immaterial.
Exclude from this item loans and leases guaranteed or insured by state or local governments,
state or local government agencies, foreign (non-U.S.) governments, and private agencies or
organizations. Also exclude loans and leases collateralized by securities issued by the
U.S. Government, including its agencies and its government-sponsored agencies.
11.a
Guaranteed portion of loans and leases included in item 11 above, excluding rebooked
“GNMA loans.” Report in the appropriate column the maximum amount recoverable from
the U.S. Government, including its agencies and its government-sponsored agencies, under
the guarantee or insurance provisions applicable to the loans and leases included in
Schedule RC-N, item 11, above.
Seller-servicers of GNMA loans should exclude all delinquent rebooked GNMA loans that
have been repurchased or are eligible for repurchase from this item (report such rebooked
GNMA loans in item 11.b below). Servicers of GNMA loans should exclude individual
delinquent loans (for which they were not the transferor) that they have purchased out of
GNMA securitizations from this item (report such purchased GNMA loans in item 11.b below).
11.b
Rebooked "GNMA loans" that have been repurchased or are eligible for repurchase
included in item 11 above. Report in the appropriate column the amount included in
Schedule RC-N, item 11, of:
(1) Delinquent rebooked GNMA loans that have been repurchased or are eligible for
repurchase by seller-servicers of GNMA loans; and
(2) Delinquent loans that have been purchased out of GNMA securitizations by servicers of
GNMA loans that were not the transferors of the loans.
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Memoranda
Item No.
Caption and Instructions
NOTE: Schedule RC-N, Memorandum items 1.a.(1) through 1.f.(5), are to be completed semiannually in
the June and December reports only. Memorandum item 1.g is to be completed quarterly.
1
Loans restructured in troubled debt restructurings included in Schedule RC-N, items 1
through 7, above. Report in the appropriate subitem and column loans that have been
restructured in troubled debt restructurings (as described in “Definitions” above) and are past
due 30 days or more or are in nonaccrual status as of the report date. Such loans will have
been included in one or more of the loan categories in items 1 through 7 of this schedule.
Exclude all loans restructured in troubled debt restructurings that are in compliance with their
modified terms (report in Schedule RC-C, Part I, Memorandum item 1),
For further information, see the Glossary entry for "troubled debt restructurings."
1.a
Construction, land development, and other land loans:
1.a.(1)
1-4 family construction loans. Report in the appropriate column all loans secured by real
estate for the purpose of constructing 1-4 family residential properties included in item 1.a.(1)
of this schedule that have been restructured in troubled debt restructurings and, under their
modified repayment terms, are past due 30 days or more or are in nonaccrual status as of the
report date.
1.a.(2)
Other construction loans and all land development and other land loans. Report in
the appropriate column all construction loans for purposes other than constructing 1-4 family
residential properties, all land development loans, and all other land loans included in
item 1.a.(2) of this schedule that have been restructured in troubled debt restructurings and,
under their modified repayment terms, are past due 30 days or more or are in nonaccrual
status as of the report date.
1.b
Loans secured by 1-4 family residential properties. Report in the appropriate column all
loans secured by 1-4 family residential properties included in item 1.c of this schedule that
have been restructured in troubled debt restructurings and, under their modified repayment
terms, are past due 30 days or more or are in nonaccrual status as of the report date.
1.c
Loans secured by multifamily (5 or more) residential properties. Report in the
appropriate column all loans secured by multifamily (5 or more) residential properties
included in item 1.d of this schedule that have been restructured in troubled debt
restructurings and, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status as of the report date.
1.d
Secured by nonfarm nonresidential properties:
1.d.(1)
Loans secured by owner-occupied nonfarm nonresidential properties. Report in the
appropriate column all loans secured by owner-occupied nonfarm nonresidential properties
included in item 1.e.(1) of this schedule that have been restructured in troubled debt
restructurings and, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status as of the report date.
1.d.(2)
Loans secured by other nonfarm nonresidential properties. Report in the appropriate
column all nonfarm nonresidential real estate loans not secured by owner-occupied nonfarm
nonresidential properties included in item 1.e.(2) of this schedule that have been restructured
in troubled debt restructurings and, under their modified repayment terms, are past due 30
days or more or are in nonaccrual status as of the report date.
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Memoranda
Item No.
Caption and Instructions
1.e
Commercial and industrial loans. Report all commercial and industrial loans included in
item 4 of this schedule that have been restructured in troubled debt restructurings and, under
their modified repayment terms, are past due 30 days or more or are in nonaccrual status as
of the report date.
1.f
All other loans. Report in the appropriate column all other loans that cannot properly be
reported in Schedule RC-N, Memorandum items 1.a through 1.e, above that have been
restructured in troubled debt restructurings and, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status as of the report date. Include in the
appropriate column of this item all loans in the following categories that have been
restructured in troubled debt restructurings and, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status as of the report date:
(1) Loans secured by farmland included in Schedule RC-N, item 1.b;
(2) Loans to depository institutions and acceptances of other banks included in
Schedule RC-N, item 2;
(3) Consumer credit cards included in Schedule RC-N, item 5.a;
(4) Consumer automobile loans included in Schedule RC-N, item 5.b;
(5) Other consumer loans included in Schedule RC-N, items 5.c; and
(6) All other loans included in Schedule RC-N, item 7, including:
(a) loans to finance agricultural production and other loans to farmers included in
Schedule RC-C, Part I, item 3;
(b) obligations (other than securities and leases) of states and political subdivisions in
the U.S. included in Schedule RC-C, Part I, item 8;
(c) loans to nondepository financial institutions included in Schedule RC-C, Part I,
item 9.a; and
(d) other loans included in Schedule RC-C, Part I, item 9.b.
For loans in the following loan categories within “All other loans” that have been restructured
in troubled debt restructurings and, under their modified repayment terms, are past due 30
days or more or are in nonaccrual status as of the report date, report the amount of such
restructured loans in the appropriate subitem of Schedule RC-N, Memorandum item 1.f, if the
dollar amount of such restructured loans in that loan category exceeds 10 percent of total
loans restructured in troubled debt restructurings that are in compliance with their modified
terms (i.e., 10 percent of the sum of Schedule RC-N, Memorandum items 1.a through 1.f):
• Memorandum item 1.f.(1), “Loans secured by farmland”;
• Memorandum item 1.f.(4)(a), Consumer “Credit cards”;
• Memorandum item 1.f.(4)(b), Consumer “Automobile loans”;
• Memorandum item 1.f.(4)(c), “Other” consumer loans; and
Memorandum item 1.f.(5), “Loans to finance agricultural production and other loans to
farmers,” for banks with $300 million or more in total assets and banks with less than
$300 million in total assets that have loans to finance agricultural production and other
loans to farmers (Schedule RC-C, Part I, item 3) exceeding five percent of total loans and
leases held for investment and held for sale (Schedule RC-C, Part I, item 12).
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Memoranda
Item No.
Caption and Instructions
1.g
Total loans restructured in troubled debt restructurings included in Schedule RC-N,
items 1 through 7, above. In the reports for March and September, report in columns A, B,
and C the total amount of loans restructured in troubled debt restructurings that are included
in Schedule RC-N, items 1 through 7, columns A, B, and C, above, respectively. In the
reports for June and December, for columns A through C, report the sum of Memorandum
items 1.a.(1) through 1.f. Exclude amounts reported in Memorandum items 1.f.(1) through
1.f.(5) when calculating the total in this Memorandum item 1.g.
2
Loans to finance commercial real estate, construction, and land development activities
included in Schedule RC-N, items 4 and 7, above. Report in the appropriate column the
amount of loans to finance commercial real estate, construction, and land development
activities not secured by real estate included in Schedule RC-C, part I, Memorandum
item 3, that are past due 30 days or more or are in nonaccrual status as of the report date.
Such loans will have been included in items 4 and 7 of Schedule RC-N above. Exclude from
this item all loans secured by real estate included in item 1 of Schedule RC-N above.
3
Not applicable.
NOTE: Memorandum item 4 is to be completed by:
• banks with $300 million or more in total assets, and
• banks with less than $300 million in total assets that have loans to finance agricultural
production and other loans to farmers, as defined for Schedule RC-C, Part I, item 3,
exceeding five percent of total loans and leases held for investment and held for sale
(Schedule RC-C, Part I, item 12).
4
Loans to finance agricultural production and other loans to farmers. Report in the
appropriate column the amount of all loans to finance agricultural production and other loans
to farmers included in Schedule RC-C, Part I, item 3, that are past due 30 days or more or
are in nonaccrual status as of the report date. Such loans will have been included in
Schedule RC-N, item 7, above.
NOTE: Memorandum item 5 is to be completed semiannually in the June and December reports only.
5
Loans and leases held for sale. Report in the appropriate column the carrying amount of
all loans and leases classified as held for sale included in Schedule RC, item 4.a, whether
measured at the lower of cost or fair value or at fair value under a fair value option, that are
past due 30 days or more or are in nonaccrual status as of the report date. Such loans and
leases will have been included in one or more of the loan and lease categories in items 1
through 8 of Schedule RC-N above and would, therefore, exclude any loans classified as
trading assets and included in Schedule RC, item 5.
6
Not applicable.
NOTE: Memorandum items 7 and 8 are to be reported semiannually in the June and December reports
only.
7
FFIEC 051
Additions to nonaccrual assets during the previous six months. Report the aggregate
amount of all loans, leases, debt securities, and other assets (net of unearned income) that
have been placed in nonaccrual status during the six months ending on the semiannual
(i.e., June 30 or December 31) report date for this item. Include those assets placed in
nonaccrual status during this six month period that are included as of the current report date
in Schedule RC-N, column C, items 1 through 8 and 10. Also include those assets placed in
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Memoranda
Item No.
Caption and Instructions
7
(cont.)
nonaccrual status during this six month period that, before the current semiannual report date
for this item, have been sold, paid off, charged-off, settled through foreclosure or concession
of collateral (or any other disposition of the nonaccrual asset) or have been returned to
accrual status. In other words, the aggregate amount of assets placed in nonaccrual status
since the prior semiannual report date that should be reported in this item should not be
reduced, for example, by any charge-offs or sales of such nonaccrual assets. If a given asset
status more than once during the six month period ending on the current semiannual report
date, report the amount of the asset only once.
8
Nonaccrual assets sold during the previous six months. Report the total of the
outstanding balances of all loans, leases, debt securities, and other assets held in nonaccrual
status (i.e., reportable in Schedule RC-N, column C, items 1 through 8 and 10) that were sold
during the six months ending on the semiannual (i.e., June 30 or December 31) report date
for this item. The amount to be included in this item is the outstanding balance (net of
unearned income) of each nonaccrual asset at the time of its sale. Do not report the sales
price of the nonaccrual assets and do not include any gains or losses from the sale. For
purposes of this item, only include those transfers of nonaccrual assets that meet the criteria
for a sale as 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). For further information, see the Glossary entry for “transfers of
financial assets.”
NOTE: Memorandum items 9.a and 9.b are to be completed semiannually in the June and December
reports only by institutions that have not adopted ASU 2016-13. Institutions that have adopted
ASU 2016-13 should leave Memorandum items 9.a and 9.b blank.
9
Purchased credit-impaired loans accounted for in accordance with FASB ASC 310-30
(former AICPA Statement of Position 03-3). Report in the appropriate subitem and column
the outstanding balance and amount of "purchased credit-impaired loans" reported as held
for investment in Schedule RC-C, Part I, Memorandum items 7.a and 7.b, respectively, that
are past due 30 days or more or are in nonaccrual status as of the report date. The amount
of such loans will have been included by loan category in items 1 through 7 of Schedule RCN, above. Purchased credit-impaired loans are accounted for in accordance with 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”). Purchased credit-impaired loans are loans that an
institution has purchased, including those acquired in a purchase business combination,
where there is evidence of deterioration of credit quality since the origination of the loan and it
is probable, at the purchase date, that the institution will be unable to collect all contractually
required payments receivable. Loans held for investment are those that the institution has
the intent and ability to hold for the foreseeable future or until maturity or payoff.
For guidance on determining the delinquency and nonaccrual status of purchased
credit-impaired loans accounted for individually and purchased credit-impaired loans with
common risk characteristics that are aggregated and accounted for as a pool, refer to the
“Definitions” section of the Schedule RC-N instructions and the Glossary entry for “purchased
credit-impaired loans and debt securities.”
FFIEC 051
RC-N-12
(9-19)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Memoranda
Item No.
Caption and Instructions
9.a
Outstanding balance. Report in the appropriate column the outstanding balance of all
purchased credit-impaired loans reported as held for investment in Schedule RC-C, Part I,
Memorandum item 7.a, that are past due 30 days or more or are in nonaccrual status as of
the report date. The outstanding balance is the undiscounted sum of all amounts, including
amounts deemed principal, interest, fees, penalties, and other under the loan, owed to the
institution at the report date, whether or not currently due and whether or not any such
amounts have been charged off by the institution. However, the outstanding balance does not
include amounts that would be accrued under the contract as interest, fees, penalties, and
other after the report date.
9.b
Amount included in Schedule RC-N, items 1 through 7, above. Report in the appropriate
column the amount of all purchased credit-impaired loans reported as held for investment in
Schedule RC-C, Part I, Memorandum item 7.b, that are past due 30 days or more or are in
nonaccrual status as of the report date.
FFIEC 051
RC-N-13
(9-19)
RC-N - PAST DUE
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FFIEC 051
RC-O - ASSESSMENTS
SCHEDULE RC-O – OTHER DATA FOR DEPOSIT INSURANCE
ASSESSMENTS
General Instructions
Each FDIC-insured depository institution that files the FFIEC 051 must complete Schedule RC-O each
quarter on an “unconsolidated single FDIC certificate number basis,” unless otherwise indicated below.
Each separately chartered depository institution that is insured by the FDIC has a unique FDIC certificate
number. When one FDIC-insured institution that files the FFIEC 051 owns another FDIC-insured
institution as a subsidiary, the parent institution should complete items 1 through 11 (except item 9.a) and
Memorandum items 1, 2 (if applicable), and 3 of Schedule RC-O by accounting for the insured institution
subsidiary under the equity method of accounting instead of consolidating it, i.e., on an “unconsolidated
single FDIC certificate number basis.” Thus, each FDIC-insured institution should report only its own
amounts in items 1 through 11 (except item 9.a) and Memorandum items 1, 2 (if applicable), and 3 of
Schedule RC-O under its own FDIC certificate number without eliminating the parent and subsidiary
institutions’ intercompany balances. (However, an FDIC-insured institution that owns another FDICinsured institution should complete item 9.a by consolidating its subsidiary institution.) In contrast, when
an FDIC-insured institution has entities other than FDIC-insured institutions that must be consolidated for
purposes of Schedule RC, Balance Sheet, the parent institution should complete items 1 through 11 and
Memorandum items 1, 2 (if applicable), and 3 of Schedule RC-O on a consolidated basis with respect to
these other entities.
An institution that has a community bank leverage ratio (CBLR) framework election in effect as of the
quarter-end report date, as reported in Schedule RC-R, Part I, item 31.a (and further described in the
General Instructions for Schedule RC-R, Part I), shall be classified as a small institution for deposit
insurance assessments, even if that institution otherwise would be classified as a large institution.
Item Instructions
Item No.
1
Caption and Instructions
Total deposit liabilities before exclusions (gross) as defined in Section 3(l) of the
Federal Deposit Insurance Act and FDIC regulations. Report on an unconsolidated single
FDIC certificate number basis the gross total deposit liabilities as of the calendar quarter-end
report date that meet the statutory 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:
•
•
•
•
•
•
•
•
FFIEC 051
All deposits reported in Schedule RC, item 13.a;
Interest accrued and unpaid on deposits reported in Schedule RC-G, item 1.a;
Uninvested trust funds held in the institution’s own trust department;
Deposits of consolidated subsidiaries (except any consolidated subsidiary that is an
FDIC-insured institution) and the interest accrued and unpaid on such deposits;
The amount by which demand deposits reported in Schedule RC, item 13.a, have been
reduced from the netting of the reporting institution’s reciprocal demand balances with
foreign banks and foreign offices of other U.S. banks (other than insured branches in
Puerto Rico and U.S. territories and possessions); and
The amount by which any other deposit liabilities reported in Schedule RC, item 13.a,
have been reduced by assets netted against these liabilities in accordance with generally
accepted accounting principles;
Less the amount of unamortized premiums included in the amount of deposit liabilities
reported in Schedule RC, item 13.a;
Plus the amount of unamortized discounts reflected in the amount of deposit liabilities
reported in Schedule RC, item 13.a;
RC-O-1
(3-20)
RC-O - ASSESSMENTS
FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
1
(cont.)
•
Plus 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 RC-O, item 2 below.
2
Total allowable exclusions, including interest accrued and unpaid on allowable
exclusions. Report on an unconsolidated single FDIC certificate number basis the total
amount of allowable exclusions from deposits as of the calendar quarter-end report date if the
institution 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.
For an institution that files the FFIEC 051, the allowable exclusions include:
(1) Reciprocal balances: Any demand deposit due from or cash item in the process of
collection due from any depository institution up to the total amount of deposit balances
due to and cash items in the process of collection due such depository institution.
(2) 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.
(3) Pass-through reserve balances: Reserve balances passed through to the Federal
Reserve by the reporting institution that are also reflected as deposit liabilities of the
reporting institution. This exclusion is not applicable to an institution that does not act as
a correspondent bank in any pass-through reserve balance relationship. A state
nonmember bank generally cannot act as a pass-through correspondent unless it
maintains an account for its own reserve balances directly with the Federal Reserve.
(4) Depository institution investment contracts: Liabilities arising from depository institution
investment contracts that are not treated as insured deposits under section 11(a)(5) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)). A Depository Institution
Investment Contract is a separately negotiated depository agreement between an
employee benefit plan and an insured depository institution that guarantees a specified
rate for all deposits made over a prescribed period and expressly permits benefitresponsive withdrawals or transfers.
(5) 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.
3
FFIEC 051
Not applicable.
RC-O-2
(3-20)
RC-O - ASSESSMENTS
FFIEC 051
Item No.
4
RC-O - ASSESSMENTS
Caption and Instructions
Average consolidated total assets for the calendar quarter. Report average consolidated
total assets for the calendar quarter on a single FDIC certificate number basis in accordance
with the guidance on “Averaging method” and “Measuring average consolidated total assets”
below. For purposes of this item, average consolidated total assets is not a quarterly
average of total assets measured in accordance with the instructions for Schedule RC,
item 12, “Total assets.”
Averaging methods – An institution that reported $1 billion or more in quarter-end
consolidated total assets in its Consolidated Reports of Condition and Income (Schedule RC,
item 12, “Total assets”) or Thrift Financial Report (Schedule SC, line item SC60, “Total
assets”) for March 31, 2011, and any institution that becomes FDIC-insured after March 31,
2011, 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 its
Consolidated Reports of Condition and Income (Schedule RC, item 12, “Total assets”) or
Thrift Financial Report (Schedule SC, line item SC60, “Total assets”) for March 31, 2011,
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.
An institution that becomes newly insured and begins operating during the calendar quarter
should report average consolidated total assets on a daily average basis. Daily average
consolidated total assets for such an institution should be calculated by adding the
institution’s consolidated total assets as of the close of business for each day during the
quarter since it became insured and operational, and dividing by the number of calendar days
since it became insured and operational.
Measuring average consolidated total assets – Average consolidated total assets should be
measured in accordance with the instructions for Schedule RC-K, item 9, average “Total
assets” (i.e., including the adjustments for available-for-sale debt and equity securities),
except as follows:
(1) If the reporting institution has an FDIC-insured depository institution subsidiary, the
subsidiary should not be consolidated. Instead, the reporting institution’s investment in
this subsidiary should be included in average consolidated total assets using the equity
method of accounting.
FFIEC 051
RC-O-3
(6-20)
RC-O - ASSESSMENTS
FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
4
(cont.)
(2) If the reporting institution is the surviving or resulting institution in a merger or
consolidation that occurred during the calendar quarter, the reporting institution should
calculate its average consolidated total assets by including the consolidated total assets
of all FDIC-insured depository institutions that were merged or consolidated into the
reporting institution as if the merger or consolidation occurred on the first day of the
calendar quarter. Acceptable methods for including a merged or consolidated FDICinsured depository institution’s consolidated total assets in this calculation for the days
during the calendar quarter preceding the merger or consolidation date include using
either (a) the acquisition date fair value of the merged or consolidated institution’s
consolidated total assets for all days (or all Wednesdays) during the calendar quarter
preceding the acquisition date or (b) the merged or consolidated institution’s consolidated
total assets, as defined for Schedule RC-K, item 9, average “Total assets,” for each day
(or each Wednesday) during the calendar quarter preceding the acquisition date.1
(3) If the reporting institution was acquired in a transaction that became effective during the
calendar quarter and push down accounting was used to account for the acquisition, the
reporting institution should calculate its average consolidated total assets as if the
acquisition occurred on the first day of the calendar quarter. Acceptable methods for
including the institution’s consolidated total assets in this calculation for the days during
the calendar quarter preceding the acquisition date include using either (a) the acquisition
date fair value of the reporting institution’s consolidated total assets for all days (or all
Wednesdays) during the calendar quarter preceding the acquisition date or (b) the
reporting institution’s consolidated total assets, as defined for Schedule RC-K, item 9,
average “Total assets,” for each day (or each Wednesday) during the calendar quarter
preceding the acquisition date.
4.a
Averaging method used. Indicate the averaging method that the reporting institution used
to report its average consolidated total assets in Schedule RC-O, item 4, above. For daily
averaging, enter the number “1”; for weekly averaging, enter the number “2.”
5
Average tangible equity for the calendar quarter. Report average tangible equity for the
calendar quarter on an unconsolidated single FDIC certificate number basis in accordance
with the guidance on “Averaging methods” and “Measuring tangible equity” below. For
purposes of this item, tangible equity is defined as Tier 1 capital as set forth in the banking
agencies’ regulatory capital standards and reported in Schedule RC-R, Part I, item 26, except
as described below under “Measuring tangible equity.”
NOTE: In accordance with Section 327.5(a)(2) of the FDIC’s regulations, daily averaging of
tangible equity for purposes of reporting in this item is not permitted. As described below
under “Averaging methods,” the amount to be reported in this item should only be either:
(1) quarter-end tangible equity as of the last day of the quarter; or (2) the average of the three
month-end Tier 1 capital balances for the quarter.
1
This approach to calculating average consolidated total assets for purposes of Schedule RC-O, item 4, does not
apply if the reporting institution is the surviving or resulting institution in a merger or consolidation during the calendar
quarter involving an entity, such as a credit union, that is not an FDIC-insured depository institution. In such a merger
or consolidation, the reporting institution should apply the guidance on business combinations in the General
Instructions for Schedule RC-K when measuring average consolidated total assets for purposes of Schedule RC-O,
item 4.
FFIEC 051
RC-O-4
(6-20)
RC-O - ASSESSMENTS
FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
5
(cont.)
Averaging methods – An institution that reported $1 billion or more in quarter-end
consolidated total assets in its Consolidated Reports of Condition and Income (Schedule RC,
item 12, “Total assets”) or Thrift Financial Report (Schedule SC, line item SC60, “Total
assets”) for March 31, 2011, and any institution that becomes FDIC-insured after March 31,
2011, must report average tangible equity on a monthly average basis. Monthly averaging
means the average of the three month-end balances within the quarter. An institution that
reported less than $1 billion in quarter-end consolidated total assets in its Consolidated
Reports of Condition and Income (Schedule RC, item 12, “Total assets”) or Thrift Financial
FFIEC 051
RC-O-4a
(3-18)
RC-O - ASSESSMENTS
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FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
5
(cont.)
Report (Schedule SC, line item SC60, “Total assets”) for March 31, 2011, 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 daily or weekly average
reports average consolidated total assets of $1 billion or more in Schedule RC-O, item 4, for
two consecutive quarters, it must permanently report average tangible equity using monthly
averaging beginning the next quarter.
Monthly average tangible equity should be calculated by adding Tier 1 capital as of each
month-end date during the calendar quarter (measured as described below under “Measuring
tangible equity”) and dividing by three. For example, monthly average tangible equity for
June 30, 2017, would be the sum of Tier 1 capital as of April 30, May 31, and June 30, 2017,
divided by three. However, institutions required or electing to report average tangible equity
on a monthly average basis normally are not required to perform monthly loan loss provision
or deferred tax calculations in accordance with generally accepted accounting principles for
the first two months of a quarter. Accordingly, such institutions may use one third of the
amount of the provision for loan and lease losses and deferred tax expense (benefit) reported
for the calendar quarter for purposes of estimating the retained earnings component of Tier 1
capital in each of the first two months of the quarter.
An institution that becomes newly insured and begins operating during the calendar quarter
should report average tangible equity on a monthly average basis. Monthly average tangible
equity for such an institution should be calculated by adding the institution’s Tier 1 capital as
of each month-end date during the quarter since it became insured and operational, and
dividing by the number of month-end dates since it became insured and operational.
Measuring tangible equity – Institutions should measure tangible equity in accordance with
the instructions for Schedule RC-R, Part I, item 26, “Tier 1 capital,” except as follows:
(1) If the reporting institution has an FDIC-insured depository institution subsidiary, the
subsidiary should not be consolidated. Instead, the reporting institution should measure
its equity capital and its Tier 1 capital by accounting for this subsidiary using the equity
method of accounting.
(2) If the reporting institution is the surviving or resulting institution in a merger or
consolidation that occurred after the end of the first month of the calendar quarter and it
reports its average tangible equity on a monthly average basis, the reporting institution
should calculate its average tangible equity as if the merger or consolidation occurred on
the first day of the calendar quarter. An acceptable method for measuring tangible equity
for month-end dates during the calendar quarter preceding the merger or consolidation
date would be to use the amount of Tier 1 capital for the month-end date immediately
following the merger or consolidation date as the amount of Tier 1 capital for the monthend date or dates preceding the merger or consolidation date.
(3) If the reporting institution was acquired in a transaction that became effective after the
end of the first month of the calendar quarter, push down accounting was used to
account for the acquisition, and the institution reports its average tangible equity on a
monthly average basis, the reporting institution should calculate its average tangible
equity as if the acquisition occurred on the first day of the calendar quarter. An
acceptable method for measuring tangible equity for month-end dates during the
calendar quarter preceding the acquisition date would be to use the amount of Tier 1
capital for the month-end date immediately following the acquisition date as the amount
of Tier 1 capital for the month-end date or dates preceding the acquisition date.
FFIEC 051
RC-O-5
(9-20)
RC-O - ASSESSMENTS
FFIEC 051
Item No.
6
RC-O - ASSESSMENTS
Caption and Instructions
Holdings of long-term unsecured debt issued by other FDIC-insured depository
institutions. Report on an unconsolidated single FDIC certificate number basis the balance
sheet amount of the reporting institution’s holdings of long-term unsecured debt issued by
other FDIC-insured depository institutions. Long-term 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 RC-B, item 6.a, “Other domestic debt securities”; Schedule RC-C, Part I, item 2,
“Loans to depository institutions and acceptances of other banks”; and Schedule RC, item 5,
“Trading assets.”
Exclude holdings of long-term unsecured debt issued by bank and thrift holding companies.
7
Unsecured "Other borrowings" with a remaining maturity of. Report on an
unconsolidated single FDIC certificate number basis the amount of the bank’s unsecured
“Other borrowings” (as defined for Schedule RC-M, item 5.b) in the appropriate subitems
according to the amount of time remaining until their final contractual maturities. Include both
fixed rate and floating rate “Other borrowings” that are unsecured. In general, “Other
borrowings” are unsecured if the bank (or a consolidated subsidiary) has not pledged
securities, loans, or other assets as collateral for the borrowing.
The sum of Schedule RC-O, items 7.a through 7.d, must be less than or equal to
Schedule RC-M, items 5.b.(1)(a) through (d) minus item 10.b.
Exclude from items 7.a through 7.d all borrowings reported in Schedule RC-M, item 10.b,
“Amount of ‘Other borrowings’ that are secured,” including all obligations under capital leases
accounted for under ASC Topic 840, Leases, and lease liabilities for finance leases
accounted for under ASC Topic 842, Leases, as applicable. Also exclude from items 7.a
through 7.d all lease liabilities for operating leases accounted for under ASC Topic 842,
which are reported in Schedule RC-G, item 4, “All other liabilities.”
7.a
One year or less. Report on an unconsolidated single FDIC certificate number basis all
unsecured “Other borrowings” with a remaining maturity of one year or less. Include
unsecured “Other borrowings” with a remaining maturity of over one year for which the holder
has the option to redeem the debt instrument within one year of the report date. Except for
such optionally redeemable borrowings, the unsecured “Other borrowings” that should be
included in this item will also have been reported in Schedule RC-M, item 5.b.(2), “Other
borrowings with a remaining maturity of one year or less.”
7.b
Over one year through three years. Report on an unconsolidated single FDIC certificate
number basis all unsecured “Other borrowings” with a remaining maturity of over one year
through three years.
7.c
Over three years through five years. Report on an unconsolidated single FDIC certificate
number basis all unsecured “Other borrowings” with a remaining maturity of over three years
through five years.
7.d
Over five years. Report on an unconsolidated single FDIC certificate number basis all
unsecured “Other borrowings” with a remaining maturity of over five years.
FFIEC 051
RC-O-6
(9-20)
RC-O - ASSESSMENTS
FFIEC 051
Item No.
8
RC-O - ASSESSMENTS
Caption and Instructions
Subordinated notes and debentures with a remaining maturity of. Report on an
unconsolidated single FDIC certificate number basis the amount of the bank’s subordinated
notes and debentures (as defined for Schedule RC, item 19, and in the Glossary entry for
“subordinated notes and debentures”) in the appropriate subitems according to the amount of
time remaining until their final contractual maturities. Include both fixed rate and floating rate
subordinated notes and debentures.
The sum of Schedule RC-O, items 8.a through 8.d, must be less than or equal to
Schedule RC, item 19, “Subordinated notes and debentures.”
8.a
One year or less. Report on an unconsolidated single FDIC certificate number basis all
subordinated notes and debentures with a remaining maturity of one year or less. Include
subordinated notes and debentures with a remaining maturity of over one year for which the
holder has the option to redeem the subordinated debt within one year of the report date.
8.b
Over one year through three years. Report on an unconsolidated single FDIC certificate
number basis all subordinated notes and debentures with a remaining maturity of over one
year through three years.
8.c
Over three years through five years. Report on an unconsolidated single FDIC certificate
number basis all subordinated notes and debentures with a remaining maturity of over three
years through five years.
8.d
Over five years. Report on an unconsolidated single FDIC certificate number basis all
subordinated notes and debentures with a remaining maturity of over five years.
9
Brokered reciprocal deposits. Report on an unconsolidated single FDIC certificate number
basis the amount of brokered reciprocal deposits included in the amount of brokered deposits
reported in Schedule RC-E, Memorandum item 1.b, “Total brokered deposits.” Exclude
reciprocal deposits that are not brokered reciprocal deposits. The amount reported in this
item for brokered reciprocal deposits should be less than or equal to Schedule RC-E,
Memorandum item 1.g, “Total reciprocal deposits.”
As defined in Section 327.8(q) of the FDIC’s regulations, “brokered reciprocal deposits” are
“reciprocal deposits as defined in Section 337.6(e)(2)(v) of the FDIC’s regulations that are not
excepted from the institution’s brokered deposits pursuant to Section 337.6(e)” of the FDIC’s
regulations.
As defined in Section 337.6(e)(2)(v) of the FDIC’s regulations, “reciprocal deposits” means
“deposits received by an agent institution through a deposit placement network with the same
maturity (if any) and in the same aggregate amount as covered deposits placed by the agent
institution in other network member banks.” All reciprocal deposits, whether they are
brokered reciprocal deposits or not, should be reported in Schedule RC-E, Memorandum
item 1.g. The definitions of the terms “covered deposit,” “deposit placement network,” and
“network member bank” are included in the instructions for Schedule RC-E, Memorandum
item 1.g.
Limited Exception for Reciprocal Deposits
An “agent institution,” as defined in Section 337.6(b)(2)(ii)(e)(1) of FDIC regulations, can
except reciprocal deposits from being classified (and reported in Schedule RC-E,
Memorandum item 1.b) as brokered deposits up to its applicable statutory caps, described
below.
FFIEC 051
RC-O-7
(3-19)
RC-O - ASSESSMENTS
FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
9
(cont.)
Under the general cap, an agent institution may except reciprocal deposits from treatment as
brokered deposits up to the lesser of $5 billion or an amount equal to 20 percent of the agent
institution’s total liabilities. Reciprocal deposits in excess of the general cap, as well as those
reciprocal deposits that do not meet the definition of “covered deposit” under
Section 337.6(b)(2)(ii)(e)(2)(ii) of the FDIC’s regulations, are brokered deposits and must
be reported in Schedule RC-E, Memorandum item 1.b.
Definition of Special Cap ‒ A special cap applies if the institution is either not well rated or not
well capitalized.1 The special cap is defined as:
“the average amount of reciprocal deposits held by the agent institution on the last day of
each of the 4 calendar quarters preceding the calendar quarter in which the agent
institution was found not to have a composite condition of outstanding or good or was
determined to be not well capitalized.”
In no event, however, can an institution’s non-brokered reciprocal deposits exceed the
general cap.
Agent Institution ‒ An institution that is not well rated or not well capitalized may qualify as an
“agent institution” if:
(1) The amount of reciprocal deposits that the institution holds as of the first reporting period
of being subject to the special cap is below or equal to the special cap and, in any
reporting period that it remains subject to the special cap, it does not subsequently
receive reciprocal deposits that cause the total amount of reciprocal deposits to exceed
the special cap; OR
(2) The amount of reciprocal deposits that it holds as of the first quarter of being subject to
the special cap is above the special cap, if such deposits were received before the
institution became subject to the special cap and, in any reporting period that it remains
subject to the special cap, it does not subsequently receive reciprocal deposits that cause
the total amount of reciprocal deposits to exceed the special cap and the institution
satisfies all other qualifications necessary to be an agent institution.
If an institution, subject to the special cap, receives reciprocal deposits that cause its total
reciprocal deposits to be greater than the special cap, the institution will no longer meet the
definition of “agent institution” and all of its reciprocal deposits should be reported as
brokered deposits in Schedule RC-E, Memorandum item 1.b, and as brokered reciprocal
deposits in this item 9, and, if applicable, in item 9.a, below.
An institution shall consider the effective date of a CAMELS composite rating to be the date
of written notification to the institution by its primary federal regulator, or state authority, of its
supervisory rating.
An institution that is not well capitalized or that has a composite supervisory rating of other
than outstanding (CAMELS “1”) or good (CAMELS “2”) as of the quarter-end date of the Call
Report for which the institution is filing shall calculate the special cap by:
1
See generally, 12 CFR Part 324, Subpart H (FDIC); 12 CFR Part 208, Subpart D (Federal Reserve Board); 12 CFR
Part 6 (OCC). 12 U.S.C. 1831o. ‘‘Well capitalized’’ is defined in 12 CFR 337.6(a)(3)(i).
FFIEC 051
RC-O-8
(3-19)
RC-O - ASSESSMENTS
FFIEC 051
RC-O - ASSESSMENTS
Item No.
Caption and Instructions
9
(cont.)
(1) Determining the most recent calendar quarter in which the institution was both well
capitalized and had a composite CAMELS rating of “1” or “2” at quarter-end.
(2) Calculating the average of the total amount of reciprocal deposits held by the institution
on the last day of the calendar quarter determined above (in the preceding step) and on
each of the three preceding calendar quarters.
To illustrate how an institution should calculate the special cap, consider the examples after
the instructions to Schedule RC-E, Memorandum item 5.
NOTE: Item 9.a is to be completed on a fully consolidated basis by institutions that own another insured
depository institution.
9.a
Fully consolidated brokered reciprocal deposits. Report on a fully consolidated basis
the amount of brokered reciprocal deposits (as defined in Schedule RC-O, item 9, above)
included in the amount of brokered deposits reported in Schedule RC-E, Memorandum
item 1.b, “Total brokered deposits.”
10
Banker’s bank certification: Does the reporting institution meet both the statutory
definition of a banker’s bank and the business conduct test set forth in FDIC
regulations? If the reporting institution meets both of these criteria on an unconsolidated
single FDIC certificate number basis, it is a qualifying banker’s bank and should answer
“Yes” to item 10 and complete items 10.a and 10.b. If the reporting institution does not meet
both of these criteria, it should answer “No” to item 10 and it should not complete items 10.a
and 10.b.
The definition of “banker’s bank” is set forth in 12 U.S.C. 24, which states that a banker’s
bank is an FDIC-insured bank where the stock of the bank or its parent holding company “is
owned exclusively (except to the extent directors’ qualifying shares are required by law) by
depository institutions or depository institution holding companies (as defined in section 1813
of this title)” and the bank or its parent holding “company and all subsidiaries thereof are
engaged exclusively in providing services to or for other depository institutions, their holding
companies, and the officers, directors, and employees of such institutions and companies,
and in providing correspondent banking services at the request of other depository
institutions or their holding companies.”
A bank that would otherwise meet the definition of a banker’s bank, but has received funds
from federal capital infusion programs (such as the Troubled Assets Relief Program and the
Small Business Lending Fund), has stock owned by the FDIC as a result of bank failures, or
has non-bank-owned stock resulting from equity compensation programs, is not excluded
from the definition of a banker’s bank for purposes of Schedule RC-O, item 10, provided the
bank also meets the business conduct test.
To meet the business conduct test, which is set forth in Section 327.5(b)(3) of the FDIC’s
regulations, a bank must conduct 50 percent or more of its business with entities other than
its parent holding company or entities other than those controlled either directly or indirectly
by its parent holding company. Control has the same meaning as in Section 3(w)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(w)(5)).
10.a
FFIEC 051
Banker’s bank deduction. A qualifying banker’s bank is eligible to have the FDIC deduct
certain assets from its assessment base, subject to a limit. Report in this item on an
unconsolidated single FDIC certificate number basis the banker’s bank deduction, which
equals the sum of a qualifying banker’s bank’s average balances due from Federal Reserve
Banks plus its average federal funds sold. These averages should be calculated on a daily
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Item No.
Caption and Instructions
10.a
(cont.)
or weekly basis consistent with the qualifying banker’s bank’s calculation of its average
consolidated total assets in Schedule RC-O, item 4 (and as reported in Schedule RC-O,
item 4.a).
Balances due from Federal Reserve Banks include the total balances due from Federal
Reserve Banks, including the qualifying banker’s bank’s own reserves and other balances
as well as reserve balances actually passed through to a Federal Reserve Bank by the
banker’s bank on behalf of its respondent depository institutions (as described in the
instructions for Schedule RC-A, item 4, “Balances due from Federal Reserve Banks,” in
the instructions for the FFIEC 031 and FFIEC 041 Call Reports). For a qualifying banker’s
bank that is a respondent in a pass-through reserve relationship with a correspondent
bank, balances due from Federal Reserve Banks include the reserve balances the
correspondent bank has passed through to a Federal Reserve Bank for the respondent
banker’s bank. Balances due from Federal Reserve Banks also include the qualifying
banker’s bank’s excess balance accounts, which are limited-purpose accounts at Federal
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Item No.
Caption and Instructions
10.a
(cont.)
Reserve Banks for maintaining an institution’s excess balances that are eligible to earn
interest on their Federal Reserve balances. See the Glossary entry for “pass-through reserve
balances.”
Federal funds sold are defined in the instructions for Schedule RC, item 3.a, “Federal funds
sold.” See also the Glossary entry for “federal funds transactions.”
10.b
Banker’s bank deduction limit. A qualifying banker’s bank is eligible to have the FDIC
deduct certain assets from its assessment base, subject to a limit. Report in this item on an
unconsolidated single FDIC certificate number basis the banker’s bank deduction limit, which
equals the sum of a qualifying banker’s bank’s average deposits of commercial banks and
other depository institutions in the U.S. plus its average federal funds purchased. These
averages should be calculated on a daily or weekly basis consistent with the qualifying
banker’s bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4
(and as reported in Schedule RC-O, item 4.a).
Deposits of commercial banks and other depository institutions in the U.S. are defined in the
instructions for Schedule RC-E, item 4.
Federal funds purchased are defined in the instructions for Schedule RC, item 14.a, “Federal
funds purchased.” See also the Glossary entry for “federal funds transactions.”
11
Custodial bank certification: Does the reporting institution meet the definition of a
custodial bank set forth in FDIC regulations? If the reporting institution meets the
custodial bank definition on an unconsolidated single FDIC certificate number basis, it should
answer “Yes” to item 11 and complete Schedule RC-O, items 11.a and 11.b. However, if a
custodial bank’s deduction limit as reported in item 11.b is zero, the custodial bank may leave
item 11.a blank.
If the reporting institution does not meet the custodial bank definition, it should answer “No” to
item 11 and it should not complete Schedule RC-O, items 11.a and 11.b.
A custodial bank, as defined in Section 327.5(c)(1) of the FDIC’s regulations, is an insured
depository institution that had:
(1) “Fiduciary and custody and safekeeping assets” (the sum of item 10, columns A and B,
plus item 11, column B, in Schedule RC-T – Fiduciary and Related Services) of
$50 billion or more as of the end of the previous calendar year, or
(2) Income from fiduciary activities (Schedule RI, item 5.a) that was more than 50 percent of
its total revenue (interest income plus noninterest income, which is the sum of items 1.h
and 5.m of Schedule RI) during the previous calendar year.
11.a
Custodial bank deduction. An institution that meets the definition of a custodial bank is
eligible to have the FDIC deduct certain assets from its assessment base, subject to the limit
reported in Schedule RC-O, item 11.b. If a custodial bank’s deduction limit as reported in
Schedule RC O, item 11.b, is zero, the custodial bank may leave this item 11.a blank.
Report in this item on an unconsolidated single FDIC certificate number basis the custodial
bank deduction, which equals average qualifying low-risk liquid assets.1 Qualifying low-risk
1
An institution that has a community bank leverage ratio framework election in effect as of the quarter-end report
date, as reported in Schedule RC-R, Part I, item 31.a (and further described in the General Instructions for
Schedule RC-R, Part I) that meets the definition of a custodial bank is not required to separately report its riskweighted assets in Schedule RC-R, Part II, in order to use the deduction.
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Item No.
Caption and Instructions
11.a
(cont.)
liquid assets are determined without regard to the maturity of the assets. Average qualifying
low-risk liquid assets equals the sum of the following amounts, all on an unconsolidated
single FDIC certificate number basis:
(1) The average amount of cash and balances due from depository institutions with a
standardized approach risk weight for risk-based capital purposes of zero percent
(as defined for Schedule RC-R, Part II, item 1, column C) plus 50 percent of the average
amount of cash and balances due from depository institutions with a standardized
approach risk weight of 20 percent (as defined for Schedule RC-R, Part II, item 1,
column G);
(2) The average amount of held-to-maturity securities with a standardized approach risk
weight for risk-based capital purposes of zero percent (as defined for Schedule RC-R,
Part II, item 2.a, column C) plus 50 percent of the average amount of held-to-maturity
securities with a standardized approach risk weight of 20 percent (as defined for
Schedule RC-R, Part II, item 2.a, column G);
(3) The average amount of available-for-sale securities with a standardized approach risk
weight for risk-based capital purposes of zero percent (as defined for Schedule RC-R,
Part II, item 2.b, column C) plus 50 percent of the average amount of available-for-sale
securities with a standardized approach risk weight of 20 percent (as defined for
Schedule RC-R, Part II, item 2.b, column G);
(4) The average amount of federal funds sold with a standardized approach risk weight for
risk-based capital purposes of zero percent (as defined for Schedule RC-R, Part II,
item 3.a, column C) plus 50 percent of the average amount of federal funds sold with a
standardized approach risk weight of 20 percent (as defined for Schedule RC-R, Part II,
item 3.a, column G);
(5) The average amount of securities purchased under agreements to resell (as defined for
Schedule RC, item 3.b) that would qualify for a standardized approach risk weight for
risk-based capital purposes of zero percent plus 50 percent of the average amount of
securities purchased under agreements to resell (as defined for Schedule RC, item 3.b)
that would qualify for a standardized approach risk weight of 2 percent, 4 percent, or
20 percent; and
(6) Fifty percent of the average amount of balances due from depository institutions, held-tomaturity securities, available-for-sale securities, federal funds sold, and securities
purchased under agreements to resell (as defined for Schedule RC, items 1, 2.a, 2.b, 3.a,
and 3.b, respectively) that qualify as on-balance sheet securitization exposures (as
defined for Schedule RC-R, Part II, item 9, column A) and have a standardized approach
risk weight for risk-based capital purposes of exactly 20 percent.
These averages should be calculated on a daily or weekly basis consistent with the custodial
bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4 (and as
reported in Schedule RC-O, item 4.a).
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Item No.
Caption and Instructions
11.b
Custodial bank deduction limit. An institution that meets the definition of a custodial bank
is eligible to have the FDIC deduct certain assets from its assessment base, subject to a limit.
Report in this item on an unconsolidated single FDIC certificate number basis the custodial
bank deduction limit, which equals the average amount of the institution’s transaction account
deposit liabilities identified by the institution as being directly linked to a fiduciary, custodial, or
safekeeping account reported in Schedule RC-T – Fiduciary and Related Services. The
titling of a transaction account or specific references in the deposit account documents
should clearly demonstrate the link between the transaction account and a fiduciary,
custodial, or safekeeping account.
The term “transaction account” is defined in Federal Reserve Regulation D and in the
Glossary entry for “deposits” and such deposits are reported in Schedule RC-E, item 7,
column A. In general, a transaction account 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, a remote service
unit, or another electronic device, including by debit card.
Exclude from this item escrow accounts, Interest on Lawyers Trust Accounts, and other trust
and custody-related deposit accounts related to commercial bank services, or otherwise
offered outside a custodial bank’s fiduciary business unit or another distinct business unit
devoted to institutional custodial services. Also exclude all nontransaction account deposit
liabilities (i.e., savings and time deposits).
This average should be calculated on a daily or weekly basis consistent with the custodial
bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4 (and as
reported in Schedule RC-O, item 4.a).
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Memoranda
Item No.
1
Caption and Instruction
Total deposit liabilities of the bank, including related interest accrued and unpaid, less
allowable exclusions, including related interest accrued and unpaid. Memorandum
items 1.a.(1) through 1.d.(2) are to be completed each quarter. These Memorandum items
should be reported on an unconsolidated single FDIC certificate number basis.
The sum of Memorandum items 1.a.(1), 1.b.(1), 1.c.(1), and 1.d.(1) must equal
Schedule RC-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.”
Accordingly, all amounts included in the bank’s total deposit liabilities less allowable
exclusions, not just those included in its “Deposits in domestic offices” (reported in
Schedule RC, item 13.a), should be reported in the appropriate subitem of Memorandum
item 1. For example, the interest accrued and unpaid on a deposit account (that is not an
allowable exclusion) should be reported together with the deposit account in Memorandum
item 1.a.(1), 1.b.(1), 1.c.(1), or 1.d.(1), as appropriate.
The dollar amounts used as the basis for reporting the number and amount of deposit
accounts in Memorandum items 1.a.(1) through 1.d.(2) 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
Self-directed defined contribution plans, which are primarily 401(k) plan accounts.
The term ‘‘self-directed’’ means that the plan participants have the right to direct how
their funds are invested, including the ability to direct that the funds be deposited at an
FDIC-insured institution.
Retirement deposit accounts exclude Coverdell Education Savings Accounts, formerly known
as Education IRAs.
In some cases, brokered certificates of deposit are issued in $1,000 amounts under a master
certificate of deposit issued by a bank to a deposit broker in an amount that exceeds
$250,000. For these so-called “retail brokered deposits,” multiple purchases by individual
depositors from an individual bank normally do not exceed the applicable deposit insurance
limit ($250,000), but under current deposit insurance rules the deposit broker is not required
to provide information routinely on these purchasers and their account ownership capacity to
the bank issuing the deposits. If this information is not readily available to the issuing bank,
these brokered certificates of deposit in $1,000 amounts may be rebuttably presumed to be
fully insured and should be reported as “deposit accounts of $250,000 or less” in
Schedule RC-O, Memorandum items 1.a and 1.c, below. When determining the number of
deposit accounts of $250,000 or less to be reported in Schedule RC-O, Memorandum
items 1.a.(2) and 1.c.(2), the issuing institution should count each such master certificate of
deposit as one account, not as multiple accounts.
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Memoranda
Item No.
Caption and Instruction
1
(cont.)
Some brokered deposits are transaction accounts or money market deposit accounts
(MMDAs) that are denominated in amounts of $0.01 and established and maintained by the
deposit broker (or its agent) as agent, custodian, or other fiduciary for the broker’s customers.
An individual depositor’s deposits within the brokered transaction account or MMDA normally
do not exceed the applicable deposit insurance limit. As with retail brokered deposits, if
information on these depositors and their account ownership capacity is not readily available
to the bank establishing the transaction account or MMDA, the amounts in the transaction
account or MMDA may be rebuttably presumed to be fully insured and should be reported as
“deposit accounts of $250,000 or less” in Schedule RC-O, Memorandum items 1.a and 1.c,
below. When determining the number of deposit accounts of $250,000 or less to be reported
in Schedule RC-O, Memorandum items 1.a.(2) and 1.c.(2), the issuing institution should
count each such brokered transaction account or MMDA as one account, not as multiple
accounts.
Time deposits issued to deposit brokers in the form of large ($250,000 or more) certificates of
deposit that have been participated out by the broker in shares of less than $250,000 should
also be reported as “deposit accounts of $250,000 or less” in Schedule RC-O, Memorandum
items 1.a and 1.c, below. When determining the number of deposit accounts of $250,000 or
less to be reported in Schedule RC-O, Memorandum items 1.a.(2) and 1.c.(2), the issuing
institution should count each such brokered certificate of deposit as one account, not as
multiple accounts.
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 bank assigns a single account number to
each depositor so that one account number may represent multiple deposit contracts
between the bank 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.
1.a
Deposit accounts (excluding retirement accounts) of $250,000 or less. Report in the
appropriate subitem on an unconsolidated single FDIC certificate number basis the amount
outstanding and the number of deposit accounts, excluding retirement deposit accounts (as
defined in Schedule RC-O, Memorandum item 1), with a balance of $250,000 or less as of
the report date.
1.a.(1)
Amount of deposit accounts (excluding retirement accounts) of $250,000 or less.
Report on an unconsolidated single FDIC certificate number basis 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 RC-O, Memorandum item 1.a.(2) below.
1.a.(2)
Number of deposit accounts (excluding retirement accounts) of $250,000 or less.
Report on an unconsolidated single FDIC certificate number basis 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.
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Memoranda
Item No.
Caption and Instruction
1.b
Deposit accounts (excluding retirement accounts) of more than $250,000. Report in the
appropriate subitem on an unconsolidated single FDIC certificate number basis the amount
outstanding and the number of deposit accounts, excluding retirement deposit accounts (as
defined in Schedule RC-O, Memorandum item 1), with a balance of more than $250,000 as
of the report date.
1.b.(1)
Amount of deposit accounts (excluding retirement accounts) of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis 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 RC-O, Memorandum item 1.b.(2) below.
1.b.(2)
Number of deposit accounts (excluding retirement accounts) of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis 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.
1.c
Retirement deposit accounts of $250,000 or less. Report in the appropriate subitem on an
unconsolidated single FDIC certificate number basis the amount outstanding and the number
of retirement deposit accounts (as defined in Schedule RC-O, Memorandum item 1) with a
balance of $250,000 or less as of the report date.
1.c.(1)
Amount of retirement deposit accounts of $250,000 or less. Report on an
unconsolidated single FDIC certificate number basis 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 RC-O,
Memorandum item 1.c.(2) below.
1.c.(2)
Number of retirement deposit accounts of $250,000 or less. Report on an
unconsolidated single FDIC certificate number basis 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.
1.d
Retirement deposit accounts of more than $250,000. Report in the appropriate subitem
on an unconsolidated single FDIC certificate number basis the amount outstanding and the
number of retirement deposit accounts (as defined in Schedule RC-O, Memorandum item 1)
with a balance of more than $250,000 as of the report date.
1.d.(1)
Amount of retirement deposit accounts of more than $250,000. Report on an
unconsolidated single FDIC certificate number basis 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 RC-O.
Memorandum item 1.d.(2) below.
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Memoranda
Item No.
Caption and Instruction
1.d.(2)
Number of retirement deposit accounts of more than $250,000. Report on an
unconsolidated single FDIC certificate number basis 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.
NOTE: Schedule RC-O, Memorandum item 2, is to be completed on an unconsolidated single FDIC
certificate number basis by banks with $1 billion or more in total assets.1
2
Estimated amount of uninsured deposits, including related interest accrued and
unpaid. Report on an unconsolidated single FDIC certificate number basis the estimated
amount of the bank'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 RC-O, Memorandum item 1) and $250,000 for other deposit 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
bank’s deposits included in Schedule RC-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.” In addition to the uninsured portion of deposits reported in Schedule RC,
item 13.a, the estimate of uninsured deposits should take into account all other items
included in Schedule RC-O, item 1 less item 2, including, but not limited to:
•
•
•
Interest accrued and unpaid on deposits;
Deposits of consolidated subsidiaries (including interest accrued and unpaid on these
deposits); and
Deposit liabilities that have been reduced by assets netted against these liabilities in
accordance with generally accepted accounting principles.
The bank's estimate of its uninsured deposits should be reported in accordance with the
following criteria. In this regard, it is recognized that a bank may have multiple automated
information systems for different types of deposits and that the capabilities of a bank’s
information systems to provide an estimate of its uninsured deposits will differ from bank to
bank at any point in time and, within an individual institution, may improve over time.
(1) If the bank has brokered deposits, which must be reported in Schedule RC-E,
Memorandum item 1.b, "Total brokered deposits," it must use the information it has
developed for completing Schedule RC-E, Memorandum item 1.c, "Brokered deposits of
$250,000 or less (fully insured brokered deposits)," to determine its best estimate of the
uninsured portion of its brokered deposits.
(2) If the bank has deposit accounts whose ownership is based on a fiduciary relationship,
Part 330 of the FDIC's regulations generally states that the titling of the deposit account
(together with the underlying records) must indicate the existence of the fiduciary
relationship in order for insurance coverage to be available on a "pass-through" basis.
Fiduciary relationships include, but are not limited to, relationships involving a trustee,
agent, nominee, guardian, executor, or custodian.
1 In general, the determination as to whether an institution has $1 billion or more in total assets is measured as of
June 30 of the previous calendar year. See pages 7 and 8 of the General Instructions for guidance on shifts in
reporting status.
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Memoranda
Item No.
2
(cont.)
Caption and Instruction
A bank with fiduciary deposit accounts with balances of more than $250,000 must
diligently use the available data on these deposit accounts, including data indicating the
existence of different principal and income beneficiaries and data indicating that some or
all of the funds on deposit represent retirement deposit accounts eligible for $250,000 in
deposit insurance coverage, to determine its best estimate of the uninsured portion of
these accounts.
(3) If the bank has deposit accounts of employee benefit plans, Part 330 of the FDIC's
regulations states that these accounts are insured on a "pass-through" basis for the
non-contingent interest of each plan participant provided that certain prescribed
recordkeeping requirements are met. A bank 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.
(4) If the bank's deposit accounts include benefit-responsive "Depository Institution
Investment Contracts," which must be included in Schedule RC-O, item 2, these deposit
liabilities are not eligible for federal deposit insurance pursuant to Section 11(a)(8) of the
Federal Deposit Insurance Act. A bank with benefit-responsive "Depository Institution
Investment Contracts" must include the entire amount of these contracts in the estimated
amount of uninsured deposits it reports in this Memorandum item 2.
(5) If the bank has deposit accounts with balances in excess of the federal deposit
insurance limit that it has collateralized by pledging assets, such as deposits of the
U.S. Government and of states and political subdivisions in the U.S. (which must be
reported in Schedule RC-E, items 2 and 3), the bank should make a reasonable estimate
of the portion of these deposits that is uninsured using the data available from its
information systems.
(6) If the bank 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
bank 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.
(7) For all other deposit accounts, the bank 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 bank 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 bank has automated information
systems in place that enable it to classify accounts by deposit owner and/or ownership
capacity, the bank 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 bank 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 bank'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.
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Memoranda
Item No.
3
FFIEC 051
Caption and Instruction
Has the reporting institution been consolidated with a parent bank or savings
association in that parent bank's or parent savings association's Call Report? If the
reporting institution is owned by another bank or savings association and that parent bank or
parent savings association is consolidating the reporting institution as part of the parent
institution's Call Report for this report date, report the legal title and FDIC Certificate Number
of the parent institution in this item.
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RC-R – REGULATORY CAPITAL
SCHEDULE RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R
The instructions for Schedule RC-R should be read in conjunction with the regulatory capital rules issued
by the primary federal supervisory authority of the reporting bank or saving association (collectively,
banks): for national banks and federal savings associations, 12 CFR Part 3; for state member banks,
12 CFR Part 217; and for state nonmember banks and state savings associations, 12 CFR Part 324.
These instructions exclude updates pertaining to the regulatory capital-related interim final rules
(IFRs) issued by the banking agencies from March through June 2020. During the third quarter of
2020, the agencies finalized several of the capital-related IFRs with no changes or only limited
changes. See the separate standalone December 2020 COVID-19 Related Supplemental
Instructions (Call Report) for instructional changes related to these IFRs.
Part I. Regulatory Capital Components and Ratios
Contents – Part I. Regulatory Capital Components and Ratios
General Instructions for Schedule RC-R, Part I
Community Bank Leverage Ratio Framework
Item Instructions for Schedule RC-R, Part I
RC-R-1
RC-R-1
RC-R-3
Common Equity Tier 1 Capital
RC-R-3
Common Equity Tier 1 Capital: Adjustments and Deductions
RC-R-6
Additional Tier 1 Capital
RC-R-15
Tier 1 Capital
RC-R-20
Total Assets for the Leverage Ratio
RC-R-20
Leverage Ratio
RC-R-22
Qualifying Criteria and Other Information for CBLR Institutions
RC-R-22
Tier 2 Capital
RC-R-25
Total Capital
RC-R-30
Total Risk-Weighted Assets
RC-R-30
Risk-Based Capital Ratios
RC-R-30
Capital Buffer
RC-R-31
General Instructions for Schedule RC-R, Part I.
Community Bank Leverage Ratio Framework
Opting into the Community Bank Leverage Ratio (CBLR) Framework ‒ A qualifying institution may opt
into the CBLR framework. A qualifying institution opts into and out of the framework through its reporting
in Call Report Schedule RC-R. A qualifying institution that opts into the CBLR framework (CBLR electing
institution) must complete Schedule RC-R, Part I, items 1 through 37 and, if applicable, items 38.a
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General Instructions for Schedule RC-R, Part I. (cont.)
through 38.c, and makes that election in Schedule RC-R, Part I, item 31.a. A qualifying institution can opt
out of the CBLR framework by completing Schedule RC-R, Parts I and II, excluding Schedule RC-R,
Part I, items 32 through 38.c.
In general, an institution may qualify for the CBLR framework if it has a leverage ratio greater than
9 percent (as reported in Schedule RC-R, Part I, item 31); has less than $10 billion in total consolidated
assets (Schedule RC-R, Part I, item 32); is not an advanced approaches institution;1 has total trading
assets and trading liabilities of 5 percent or less of total consolidated assets (Schedule RC-R, Part I,
item 33); and has total off-balance sheet exposures (excluding derivatives other than sold credit
derivatives and unconditionally cancelable commitments) of 25 percent or less of total consolidated
assets (Schedule RC-R, Part I, item 34). However, an otherwise qualifying institution’s primary federal
supervisory authority may disallow the institution’s use of the CBLR framework based on the supervisory
authority’s evaluation of the risk profile of the institution.
A qualifying institution with a leverage ratio that exceeds 9 percent and opts into the CBLR framework
shall be considered to have met: (i) the generally applicable risk-based and leverage capital
requirements in the agencies’ capital rules; (ii) the capital ratio requirements to be considered well
capitalized under the agencies’ prompt corrective action (PCA) framework (in the case of insured
depository institutions); and (iii) any other applicable capital or leverage requirements.2
Ceasing to Have a CBLR Greater Than 9 Percent or Failing to Meet Any of the Qualifying Criteria ‒ A
qualifying institution that temporarily fails to meet any of the qualifying criteria, including the greater than
9 percent leverage ratio requirement, generally would still be deemed well-capitalized so long as the
institution maintains a leverage ratio greater than 8 percent. At the end of the grace period (see below),
the institution must meet all qualifying criteria to remain in the community bank leverage ratio framework
or otherwise must apply and report under the generally applicable capital rule. Similarly, an institution
with a leverage ratio of 8 percent or less is not eligible for the grace period and must comply with the
generally applicable capital rule, i.e., for the calendar quarter in which the institution reports a leverage
ratio of 8 percent or less, by completing all of Schedule RC-R, Parts I and II, excluding Schedule RC-R,
Part I, items 32 through 38.c.
Under the CBLR framework, the grace period will begin as of the end of the calendar quarter in which the
CBLR electing institution ceases to satisfy any of the qualifying criteria and will end after two consecutive
calendar quarters. For example, if the CBLR electing institution no longer meets one of the qualifying
criteria as of February 15, and still does not meet the criteria as of the end of that quarter, the grace
period for such an institution will begin as of the end of the quarter ending March 31. The institution may
continue to use the community bank leverage ratio framework as of June 30, but will need to comply fully
with the generally applicable rule (including the associated Schedule RC-R reporting requirements) as of
September 30, unless the institution once again meets all qualifying criteria of the CBLR framework,
including a leverage ratio of greater than 9 percent, before that time.
1
An institution that is subject to the advanced approaches capital rule (i.e., an advanced approaches institution as
defined in the federal banking agencies’ regulatory capital rules) is (i) a subsidiary of a global systemically important
bank holding company, as identified pursuant to 12 CFR 217.402; (ii) a Category II institution; (iii) a subsidiary of a
depository institution that uses the advanced approaches pursuant to subpart E of 12 CFR part 3 (OCC), 12 CFR
part 217 (Board), or 12 CFR part 324 (FDIC) to calculate its risk-based capital requirements; (iv) a subsidiary of a
bank holding company or savings and loan holding company that uses the advanced approaches pursuant to
subpart E of 12 CFR part 217 to calculate its risk-based capital requirements; or (v) an institution that elects to use
the advanced approaches to calculate its risk-based capital requirements.
Category II institutions include institutions with (1) at least $700 billion in total consolidated assets or (2) at least
$75 billion in cross-jurisdictional activity and at least $100 billion in total consolidated assets. In addition, depository
institution subsidiaries of Category II institutions are considered Category II institutions.
2
See 12 CFR 3 (OCC); 12 CFR 217 (Board); 12 CFR 324 (FDIC).
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Item Instructions for Schedule RC-R, Part I.
Item No.
Caption and Instructions
Common Equity Tier 1 Capital
1
Common stock plus related surplus, net of treasury stock and unearned employee
stock ownership plan (ESOP) shares. Report the sum of Schedule RC, items 24, 25,
and 26.c, as follows:
(1) Common stock: Report the amount of common stock reported in Schedule RC, item 24,
provided it meets the criteria for common equity tier 1 capital based on the regulatory
capital rules of the institution’s primary federal supervisor. Include capital instruments
issued by mutual banking organizations that meet the criteria for common equity tier 1
capital.
(2) Related surplus: Adjust the amount reported in Schedule RC, item 25 as follows: include
the net amount formally transferred to the surplus account, including capital contributions,
and any amount received for common stock in excess of its par or stated value on or
before the report date; exclude adjustments arising from treasury stock transactions.
(3) Treasury stock, unearned ESOP shares, and any other contra-equity components:
Report the amount of contra-equity components reported in Schedule RC, item 26.c.
Because contra-equity components reduce equity capital, the amount reported in
Schedule RC, item 26.c, is a negative amount.
2
Retained earnings. Report the amount of the institution’s retained earnings as reported in
Schedule RC, item 26.a.
An institution that has adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses and introduces the current
expected credit losses methodology (CECL), and has elected to apply the 3-year CECL
transition provision (3-year CECL electing institution) should also include in this item its
applicable CECL transitional amount, in accordance with section 301 of the regulatory capital
rules. Specifically, a 3-year CECL electing institution includes 75 percent of its CECL
transitional amount during the first year of the transition period, 50 percent of its CECL
transitional amount during the second year of the transition period, and 25 percent of its
CECL transitional amount during the third year of the transition period.
Example and a worksheet calculation for the 3-year CECL transition provision:
Assumptions:
•
•
•
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For example, consider an institution that elects to apply the 3-year CECL transition and
has a CECL effective date of January 1, 2020, and a 21 percent tax rate.
On the closing balance sheet date immediately prior to adopting CECL
(i.e., December 31, 2019), the 3-year CECL electing institution has $10 million in retained
earnings and $1 million in the allowance for loan and lease losses. On the opening
balance sheet date immediately after adopting CECL (i.e., January 1, 2020), the CECL
electing institution has $1.2 million in allowances for credit losses (ACL), which also
equals $1.2 million of adjusted allowances for credit losses (AACL), as defined in the
regulatory capital rules.
The 3-year CECL electing institution recognizes the effect of the adoption of CECL as of
January 1, 2020, by recording an increase in its ACL of $200,000 (credit), with an
offsetting increase in temporary difference deferred tax assets (DTAs) of $42,000 (debit)
and a reduction in beginning retained earnings of $158,000 (debit).
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Part I. (cont.)
Item No.
Caption and Instructions
2
(cont.)
•
For each of the quarterly reporting periods in year 1 of the transition period (i.e., 2020),
the 3-year CECL electing institution increases both retained earnings and average total
consolidated assets by $118,500 ($158,000 x 75 percent), decreases temporary
difference DTAs by $31,500 ($42,000 x 75 percent), and decreases AACL by $150,000
($200,000 x 75 percent) for purposes of calculating its regulatory capital ratios. The
remainder of the 3-year CECL transition provision of the 3-year CECL electing institution
is transitioned into regulatory capital according to the schedule provided in Table 1 below.
Table 1 – Example of a 3-Year CECL Transition Provision Schedule
Dollar Amounts in
Thousands
1. Increase retained
earnings and average total
consolidated assets by the
CECL transitional amount
2. Decrease temporary
difference DTAs by the
DTA transitional amount
3. Decrease AACL by the
AACL transitional amount
2.a
Transitional
Amounts
Column A
CECL transitional
amount = $158
Transitional Amounts Applicable During Each Year
of the 3-Year Transition Period
Year 1 at 75%
Year 2 at 50%
Year 3 at 25%
Column B
Column C
Column D
$118.50
$79
$39.50
DTA transitional
amount = $42
$31.50
$21
$10.50
AACL transitional
amount = $200
$150
$100
$50
To be completed only by institutions that have adopted ASU 2016-13: Does your
institution have a CECL transition election in effect as of the quarter-end report date?
An institution may make a one-time election to use the CECL transition provision, as
described in section 301 of the regulatory capital rules. Such an institution is required to
begin applying the CECL transition provision as of the institution’s CECL adoption date. An
institution must indicate its election to use the CECL transition provision beginning in the
quarter that it first reports its credit loss allowances in the Call Report as measured under
CECL. An institution that does not elect to use the CECL transition provision in the quarter
that it first reports its credit loss allowances in the Call Report as measured under CECL
would not be permitted to make an election in subsequent reporting periods. For example,
an institution that adopts CECL as of January 1, 2020, and does not elect to use the CECL
transition provision in its Call Report for the March 31, 2020, report date would not be
permitted to use the CECL transition provision in any subsequent reporting period.
An institution that has adopted CECL and has elected to apply the CECL transition provision
must enter “1” for “Yes” in item 2.a for each quarter in which the institution uses the transition
provisions. An institution that has adopted CECL and has elected not to use the CECL
transition provision must enter a “0” for “No” in item 2.a. An institution that has not adopted
CECL should leave item 2.a blank.
Each institution should complete item 2.a beginning in the quarter that it first reports its
credit loss allowances in the Call Report as measured under CECL and in each subsequent
Call Report thereafter until item 2.a is removed from the report. Effective December 31,
2026, item 2.a, will be removed from Schedule RC-R, Part I, because the optional three-year
phase-in period will have ended for all CECL electing institutions. If an individual CECL
electing institution’s three-year phase-in period ends before item 2.a is removed (e.g., its
phase-in period ends December 31, 2022), the institution would report “0” in item 2.a to
indicate that it no longer has a CECL transition election in effect.
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Part I. (cont.)
Item No.
Caption and Instructions
3
Accumulated other comprehensive income (AOCI). Report the amount of AOCI as
reported under U.S. generally accepted accounting principles (GAAP) that is included in
Schedule RC, item 26.b.
3.a
AOCI opt-out election.
An institution that is not an advanced approaches institution as defined in the regulatory
capital rules may make a one-time election to become subject to the AOCI-related
adjustments in Schedule RC-R, Part I, items 9.a through 9.e. That is, such an institution may
opt out of the requirement to include most components of AOCI in common equity tier 1
capital (with the exception of accumulated net gains and losses on cash flow hedges related
to items that are not recognized at fair value on the balance sheet). An institution that makes
an AOCI opt-out election must enter “1” for “Yes” in this item 3.a.
Each institution (except an advanced approaches institution) in existence as of March 31,
2015, made its AOCI opt-out election on the institution’s March 31, 2015, Call Report. For an
institution that comes into existence after March 31, 2015, or becomes a non-advanced
approaches institution, the institution must make its AOCI opt-out election in the first
Call Report the institution files after the occurrence of this event. After an institution initially
makes its AOCI opt-out election, the institution must report its election in each quarterly Call
Report thereafter. Each of the institution’s depository institution subsidiaries, if any, must
elect the same option as the institution. With prior notice to its primary federal supervisor, an
institution resulting from a merger, acquisition, or purchase transaction may make a new
AOCI opt-out election, as described in section 22(b)(2) of the regulatory capital rules.
An institution that does not make an AOCI opt-out election and enters “0” for “No” in this
item 3.a is subject to the AOCI-related adjustment in Schedule RC-R, Part I, item 9.f.
4
Common equity tier 1 minority interest includable in common equity tier 1 capital.
Report the aggregate amount of common equity tier 1 minority interest, calculated as
described below and in section 21 of the regulatory capital rules. Common equity tier 1
minority interest is the portion of common equity tier 1 capital in a reporting institution’s
subsidiary not attributable, directly or indirectly, to the parent institution. Note that a bank
may only include common equity tier 1 minority interest if: (a) the subsidiary is a depository
institution; and (b) the capital instruments issued by the subsidiary meet all of the criteria for
common equity tier 1 capital (qualifying common equity tier 1 capital instruments).
In order to complete this item 4, institutions need to complete items 6 to 10 of
Schedule RC-R, Part I. Non-advanced approaches institutions are able to include common
equity tier 1 minority interest up to 10 percent of the parent banking organization’s common
equity tier 1 capital. The 10 percent limitation is measured before the inclusion of any
minority interest and after the deductions from and adjustments to the regulatory capital of
the parent banking organization described in sections 22(a) and (b) of the regulatory capital
rules.
Example and a worksheet calculation: Calculate common equity tier 1 minority interest
includable at the reporting institution’s level as follows:
Assumptions:
•
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The parent banking organization’s common equity tier 1 capital is $100, it has two
subsidiaries (subsidiary A and subsidiary B), and it has $10 of common equity tier 1
capital adjustments and deductions;
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Part I. (cont.)
Item No.
4
Caption and Instructions
•
•
(1)
(2)
(3)
(4)
(5)
5
Subsidiary A has $7 of common equity tier 1 minority interest (that is, owned by minority
shareholders).
Subsidiary B has $5 of common equity tier 1 minority interest (that is, owned by minority
shareholders).
Common Equity Tier 1 Capital Elements Before Minority Interest and
Adjustments and Deductions = Schedule RC-R, Part I, sum of items 1, 2,
and 3
Common Equity Tier 1 Capital: Adjustments and Deductions =
Schedule RC-R, Part I, sum of items 6, 7, 8, 9.a through 9.f, 10.a, and 10.b
Subtract the amount in step (2) from the amount in step (1). This is the
base to calculate the 10 percent limitation.
Multiply step (3) by 10 percent. This is the maximum includable common
equity tier 1 minority interest from all subsidiaries.
Determine the lower of (4) and the total common equity tier 1 minority
interest from all subsidiaries. This is the “common equity tier 1 minority
interest includable at the reporting institution’s level” to be included in
Schedule RC-R, Part I, item 4.
$100
$10
$100-$10 =
$90
$90 x 10% =
$9
Minimum of
($9 from Step
4 or $12
($7+$5) from
the
assumptions)
= $9
Common equity tier 1 capital before adjustments and deductions. Report the sum of
Schedule RC-R, Part I, items 1, 2, 3, and 4.
Common Equity Tier 1 Capital: Adjustments and Deductions
General Instructions for Common Equity Tier 1 Capital: Adjustments and Deductions
Note 1: As described in section 22(b) of the regulatory capital rules, regulatory adjustments to common
equity tier 1 capital must be made net of associated deferred tax effects.
Note 2: As described in section 22(e) of the regulatory capital rules, netting of deferred tax liabilities
(DTLs) against assets that are subject to deduction is permitted if the following conditions are met:
(i) The DTL is associated with the asset;
(ii) The DTL would be extinguished if the associated asset becomes impaired or is derecognized under
GAAP; and
(iii) A DTL can only be netted against a single asset.
The amount of deferred tax assets (DTAs) that arise from net operating loss and tax credit carryforwards,
net of any related valuation allowances, and of DTAs arising from temporary differences that the
institution could not realize through net operating loss carrybacks, net of any related valuation
allowances, may be offset by DTLs (that have not been netted against assets subject to deduction)
subject to the following conditions:
(i) Only the DTAs and DTLs that relate to taxes levied by the same taxation authority and that are
eligible for offsetting by that authority may be offset for purposes of this deduction.
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Part I. (cont.)
General Instructions for Common Equity Tier 1 Capital: Adjustments and Deductions (cont.)
(ii) The amount of DTLs that the institution nets against DTAs that arise from net operating loss and tax
credit carryforwards, net of any related valuation allowances, and against DTAs arising from
temporary differences that the institution could not realize through net operating loss carrybacks, net
of any related valuation allowances, must be allocated in proportion to the amount of DTAs that arise
from net operating loss and tax credit carryforwards (net of any related valuation allowances, but
before any offsetting of DTLs) and of DTAs arising from temporary differences that the institution
could not realize through net operating loss carrybacks (net of any related valuation allowances, but
before any offsetting of DTLs), respectively.
An institution may offset DTLs embedded in the carrying value of a leveraged lease portfolio acquired in a
business combination (whether accounted for under ASC Topic 840, Leases, or grandfathered and
accounted for under ASC Topic 842, Leases, as applicable) that are not recognized under GAAP against
DTAs that are subject to section 22(d) of the regulatory capital rules in accordance with section 22(e).
An institution must net DTLs against assets subject to deduction in a consistent manner from reporting
period to reporting period. An institution may change its DTL netting preference only after obtaining the
prior written approval of the primary federal supervisor.
In addition, note that even though certain deductions may be net of associated DTLs, the risk-weighted
portion of those items may not be reduced by the associated DTLs.
Item Instructions for Common Equity Tier 1 Capital: Adjustments and Deductions
Item No.
6
Caption and Instructions
LESS: Goodwill net of associated deferred tax liabilities (DTLs). Report the amount of
goodwill included in Schedule RC-M, item 2.b.
However, if the institution has a DTL that is specifically related to goodwill that it chooses to
net against the goodwill, the amount of disallowed goodwill to be reported in this item should
be reduced by the amount of the associated DTL.
7
LESS: Intangible assets (other than goodwill and mortgage servicing assets (MSAs)),
net of associated DTLs. Report all intangible assets (other than goodwill and MSAs)
included in Schedule RC-M, item 2.c, that do not qualify for inclusion in common equity tier 1
capital based on the regulatory capital rules of the institution’s primary federal supervisor.
Generally, all purchased credit card relationships (PCCRs), nonmortgage servicing assets,
and all other intangibles reported in Schedule RC-M, item 2.c, do not qualify for inclusion in
common equity tier 1 capital and should be included in this item.
However, if the institution has a DTL that is specifically related to an intangible asset (other
than goodwill and MSAs) that it chooses to net against the intangible asset for regulatory
capital purposes, the amount of disallowed intangibles to be reported in this item should be
reduced by the amount of the associated DTL. Furthermore, a DTL that the institution
chooses to net against the related intangible reported in this item may not also be netted
against DTAs that arise from net operating loss and tax credit carryforwards, net of any
related valuation allowances, and DTAs that arise from temporary differences, net of any
related valuation allowances, for regulatory capital purposes.
For state member banks, if the amount reported for other intangible assets in
Schedule RC-M, item 2.c, includes intangible assets that were recorded on the reporting
bank's balance sheet on or before February 19, 1992, the remaining book value as of the
report date of these intangible assets may be excluded from this item.
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Part I. (cont.)
Item No.
Caption and Instructions
8
LESS: Deferred tax assets (DTAs) that arise from net operating loss and tax credit
carryforwards, net of any related valuation allowances and net of DTLs. Report the
amount of DTAs that arise from net operating loss and tax credit carryforwards, net of
associated valuation allowances and net of associated DTLs.
9
AOCI-related adjustments. Institutions that entered “1” for Yes in Schedule RC-R, Part I,
item 3.a, must complete Schedule RC-R, Part I, items 9.a and 9.c through 9.e, only.
Institutions that entered “0” for No in Schedule RC-R, Part I, item 3.a, must complete
Schedule RC-R, Part I, item 9.f, only.
9.a
LESS: Net unrealized gains (losses) on available-for-sale debt securities. For
institutions that entered “1” for Yes in Schedule RC-R, Part I, item 3.a, report the amount of
net unrealized gains (losses) on available-for-sale debt securities, net of applicable income
taxes, that is included in Schedule RC, item 26.b, “Accumulated other comprehensive
income.” If the amount is a net gain, report it as a positive value in this item. If the amount is
a net loss, report it as a negative value in this item.
For such institutions, include in this item net unrealized gains (losses) on available-for-sale
debt securities reported in Schedule RC-B, items 1 through 6.b, columns C and D, and on
those assets not reported in Schedule RC-B, that the bank accounts for like available-for-sale
debt securities in accordance with applicable accounting standards (e.g., negotiable
certificates of deposit and nonrated industrial development obligations).
9.b
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Not applicable.
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Part I. (cont.)
Item No.
Caption and Instructions
9.c
LESS: Accumulated net gains (losses) on cash flow hedges. Report the amount of
accumulated net gains (losses) on cash flow hedges, net of applicable income taxes, that is
included in Schedule RC, item 26.b, “Accumulated other comprehensive income.” The
amount reported in Schedule RC-R, Part I, item 9.c, should include gains (losses) on cash
flow hedges that are no longer effective but included in AOCI. If the amount is a net gain,
report it as a positive value in this item. If the amount is a net loss, report it as a negative
value in this item.
9.d
LESS: Amounts recorded in AOCI attributed to defined benefit postretirement plans
resulting from the initial and subsequent application of the relevant GAAP standards
that pertain to such plans. Report the amounts recorded in AOCI, net of applicable income
taxes, and included in Schedule RC, item 26.b, “Accumulated other comprehensive income,”
resulting from the initial and subsequent application of ASC Topic 715, Compensation‒
Retirement Benefits, to defined benefit postretirement plans (an institution may exclude the
portion relating to pension assets deducted in Schedule RC-R, Part I, item 10.b). If the
amount is a net gain, report it as a positive value in this item. If the amount is a net loss,
report it as a negative value in this item.
9.e
LESS: Net unrealized gains (losses) on held-to-maturity securities that are included in
AOCI. Report the amount of net unrealized gains (losses) on held-to-maturity securities that
is not credit-related, net of applicable taxes, and is included in AOCI as reported in
Schedule RC, item 26.b, “Accumulated other comprehensive income.” If the amount is a net
gain, report it as a positive value. If the amount is a net loss, report it as a negative value.
Include (i) the unamortized balance of the unrealized gain (loss) that existed at the date of
transfer of a debt security transferred into the held-to-maturity category from the
available-for-sale category, net of applicable income taxes, and (ii) the unaccreted portion of
other-than-temporary impairment losses on available-for-sale and held-to-maturity debt
securities that was not recognized in earnings in accordance with ASC Topic 320,
Investments-Debt Securities, net of applicable income taxes.
9.f
To be completed only by institutions that entered “0” for No in Schedule RC-R,
Part I, item 3.a:
LESS: Accumulated net gain (loss) on cash flow hedges included in AOCI, net of
applicable income taxes, that relates to the hedging of items that are not recognized at
fair value on the balance sheet. Report the amount of accumulated net gain (loss) on cash
flow hedges included in AOCI, net of applicable income taxes, that relates to the hedging of
items that are not recognized at fair value on the balance sheet. If the amount is a net gain,
report it as a positive value. If the amount is a net loss, report it as a negative value.
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Part I. (cont.)
Item No.
Caption and Instructions
10
Other deductions from (additions to) common equity tier 1 capital before thresholdbased deductions:
10.a
LESS: Unrealized net gain (loss) related to changes in the fair value of liabilities that
are due to changes in own credit risk. Report the amount of unrealized net gain (loss)
related to changes in the fair value of liabilities that are due to changes in the institution’s own
credit risk. If the amount is a net gain, report it as a positive value in this item. If the amount
is a net loss, report it as a negative value in this item.
10.b
LESS: All other deductions from (additions to) common equity tier 1 capital before
threshold-based deductions. Report the amount of all other deductions from (additions
to) common equity tier 1 capital that are not included in Schedule RC-R, Part I, items 1
through 9, as described below.
(1) After-tax gain-on-sale in connection with a securitization exposure. Include any
after-tax gain-on-sale in connection with a securitization exposure. Gain-on-sale means
an increase in the equity capital of an institution resulting from a securitization (other than
an increase in equity capital resulting from the institution’s receipt of cash in connection
with the securitization or reporting of a mortgage servicing asset on Schedule RC).
(2) Defined benefit pension fund net asset, net of associated DTLs. An institution that is
not an insured depository institution should include any defined benefit pension fund net
asset. This amount may be net of any associated DTLs in accordance with section 22(e)
of the capital rules.
(3) Investments in the institution’s own shares to the extent not excluded as part of
treasury stock. Include the institution’s investments in (including any contractual
obligation to purchase) its own common stock instruments, including direct, indirect, and
synthetic exposures to such capital instruments (as defined in the regulatory capital
rules), to the extent such capital instruments are not excluded as part of treasury stock,
reported in Schedule RC-R, Part I, item 1.
If an institution already deducts its investment in its own shares (for example, treasury
stock) from its common equity tier 1 capital elements, it does not need to make such
deduction twice.
An institution may deduct gross long positions net of short positions in the same
underlying instrument only if the short positions involve no counterparty credit risk and all
other criteria in section 22(h) of the regulatory capital rules are met.
The institution must look through any holdings of index securities to deduct investments
in its own capital instruments. In addition:
(i) Gross long positions in investments in an institution’s own regulatory capital
instruments resulting from holdings of index securities may be netted against short
positions in the same underlying index;
(ii) Short positions in index securities to hedge long cash or synthetic positions may be
decomposed to recognize the hedge; and
(iii) The portion of the index composed of the same underlying exposure that is being
hedged may be used to offset the long position only if both the exposure being
hedged and the short position in the index are covered positions under the market
risk rule, and the hedge is deemed effective by the institution’s internal control
processes.
FFIEC 051
RC-R-10
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
10.b
(cont.)
(4) Reciprocal cross-holdings in the capital of financial institutions in the form of
common stock. Include investments in the capital of other financial institutions (in the
form of common stock) that the institution holds reciprocally (this is the corresponding
deduction approach). Such reciprocal crossholdings may result from a formal or informal
arrangement to swap, exchange, or otherwise intend to hold each other’s capital
instruments.
(5) Equity investments in financial subsidiaries. Include the aggregate amount of the
institutions’ outstanding equity investments, including retained earnings, in its financial
subsidiaries (as defined in 12 CFR 5.39 (OCC); 12 CFR 208.77 (Board); and
12 CFR 362.17 (FDIC)). The assets and liabilities of financial subsidiaries may not be
consolidated with those of the parent institution for regulatory capital purposes. No other
deduction is required for these investments in the capital instruments of financial
subsidiaries.
(6) Deductions for non-includable subsidiaries. A savings association that has a nonincludable subsidiary must deduct its outstanding investments (both equity and debt) in,
and extensions of credit to, the subsidiary in this item 10.b.
11
Not applicable.
12
Subtotal. Report the amount in Schedule RC-R, Part I, item 5, less the amounts in
Schedule RC-R, Part I, items 6 through 10.b.
This subtotal will be used in Schedule RC-R, Part I, items 13 through 15, to calculate the
amounts of items subject to the 25 percent common equity tier 1 capital threshold deductions
(threshold items):
(i) Investments in the capital of unconsolidated financial institutions, net of associated DTLs;
(ii) MSAs, net of associated DTLs; and
(iii) DTAs arising from temporary differences that could not be realized through net operating
loss carrybacks, net of related valuation allowances and net of DTLs.
13
LESS: Investments in the capital of unconsolidated financial institutions, net of
associated DTLs, that exceed 25 percent of item 12. Items that are not deducted from the
appropriate capital tier are risk-weighted based on the exposure in Schedule RC-R, Part II,
except for institutions under the community bank leverage ratio (CBLR) framework.
Institutions have the flexibility when deciding which investments in the capital of
unconsolidated financial institutions to risk weight and which to deduct.
Report the amount of investments in the capital of unconsolidated financial institutions, net of
associated DTLs, that exceed the 25 percent common equity tier 1 capital deduction
threshold, calculated as follows:
(1) Determine the amount of investments in the capital of unconsolidated financial
institutions, net of associated DTLs.
(2) If the amount in (1) is greater than 25 percent of Schedule RC-R, Part I, item 12, report
the difference across items 13, 24, or 45, depending on the tier of capital for which the
investments in the capital of unconsolidated financial institutions qualify. As mentioned
above, the institution can elect which investments it must deduct and which it must risk
weight. The institution’s election and the component of capital for which the underlying
instrument would qualify will determine if the instrument will be deducted and reported in
item 13 or be deducted and reported in item 24 or 45.
FFIEC 051
RC-R-11
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
13
(cont.)
(3) If the amount in (2) is less than or equal to 25 percent of Schedule RC-R, Part I, item 12,
report zero in this item 13.
If the institution included embedded goodwill in Schedule RC-R, Part I, item 6, to avoid
double counting, the institution may net such embedded goodwill already deducted against
the exposure amount of the investment. For example, if an institution has deducted $10 of
goodwill embedded in a $100 investment in the capital of an unconsolidated financial
institution, the institution would be allowed to net such embedded goodwill against the
exposure amount of such investment (that is, the value of the investment would be $90 for
purposes of the calculation of the amount that would be subject to deduction).
Example and a worksheet calculation:
Assumptions:
For example, assume that an institution:
• Has $20 of total investments in the capital of unconsolidated financial institutions;
• Of that $20, $9 are investments in common equity tier 1 capital instruments,
$7 are investments in additional tier 1 capital instruments, and $4 are
investments in tier 2 capital instruments;
• Has total common equity tier 1 capital subtotal (reported in Schedule RC-R,
Part I, item 12) of $60;
• Has total additional tier 1 capital of $20; and
• Has total tier 2 capital of $3.
(1)
(2)
(3)
(4)
Total investments in the capital of unconsolidated financial
institutions
Multiply the total common equity tier 1 capital subtotal by
25 percent.
Determine if (1) is greater than (2), and, if so, the difference
between (1) and (2) must be deducted from regulatory capital.
The amount of investments deducted from regulatory capital
can be deducted from the corresponding total amounts of
regulatory capital held by the institution that meet each type of
capital, as an institution chooses.
$20
$60 x 25% = $15
$20 > $15, so the amount
deducted is $20-$15 = $5
Total of $5 must be
deducted from regulatory
capital. Of that, $3 will be
deducted from the
institution’s $3 of tier 2
capital, and $2 will be
deducted from the
institution’s $20 of
additional tier 1 capital. No
deduction from common
equity tier 1 will be
reported in this item 13.
Since the CBLR framework does not have a total capital requirement, a CBLR electing
institution is neither required to calculate tier 2 capital nor make any deductions that would
have been taken from tier 2 capital under the generally applicable capital rule. Therefore, if a
CBLR electing institution has investments in the capital instruments of an unconsolidated
financial institution that would qualify as tier 2 capital of the electing institution under the
generally applicable capital rule (tier 2 qualifying investments), and the institution’s total
investments in the capital of unconsolidated financial institutions exceed the threshold for
deduction, the institution is not required to deduct the tier 2 qualifying investments.
FFIEC 051
RC-R-12
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
13
(cont.)
Example for a CBLR electing institution and a worksheet calculation:
Assumptions:
For example, assume that a CBLR electing institution:
• Has $20 of total investments in the capital of unconsolidated financial institutions;
• Of that $20, $15 are investments in tier 1 capital instruments, and $5 are investments
in tier 2 capital instruments; and
• Has total common equity tier 1 capital subtotal (reported in Schedule RC-R, Part I,
item 12) of $60.
(1)
(2)
(3)
(4)
14
Total investments in the capital of unconsolidated financial
institutions
Multiply the total common equity tier 1 capital subtotal by
25 percent.
Determine if (1) is greater than (2), and, if so, the difference
between (1) and (2) must be deducted from regulatory capital.
The amount of investments deducted from regulatory capital
can be deducted from the corresponding total amounts of
regulatory capital held by the institution that meet each type of
capital, as an institution chooses.
$20
$60 x 25% = $15
$20 > $15, so the amount
deducted is $20-$15 = $5
Total of $5 must be
deducted from regulatory
capital. Since institutions
have the flexibility to
choose which items are
deducted, they can elect to
allocate the tier 1
investments first. As a
result, the remaining
investment that exceeds
the threshold would be tier
2 instruments. Therefore,
since CBLR electing
institutions are not required
to make tier 2 deductions,
no deduction is necessary.
LESS: MSAs, net of associated DTLs, that exceed 25 percent of item 12. Report the
amount of MSAs included in Schedule RC-M, item 2.a, net of associated DTLs, that exceed
the 25 percent common equity tier 1 capital deduction threshold as follows:
(1) Take the amount of MSAs as reported in Schedule RC-M, item 2.a, net of associated
DTLs.
(2) If the amount in (1) is greater than 25 percent of Schedule RC-R, Part I, item 12, report
the difference in this item 14.
(3) If the amount in (1) is less than or equal to 25 percent of Schedule RC-R, Part I, item 12,
enter zero in this item 14.
All institutions must apply a 250 percent risk-weight to MSAs that are not deducted from
common equity tier 1 capital, without regard to any associated DTLs, except for institutions
that are subject to the community bank leverage ratio (CBLR) framework.
FFIEC 051
RC-R-13
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
14
(cont.)
Example and a worksheet calculation:
Assumptions:
For example, assume that an institution:
• Has $20 of MSAs, net of associated DTLs; and
• Has total common equity tier 1 capital subtotal (reported in Schedule RC-R, Part I,
item 12) of $60.
(1)
Total amount of MSAs, net of associated DTLs.
$20
(2)
Multiply the total common equity tier 1 capital subtotal by
25 percent.
Determine if (1) is greater than (2), and, if so, the difference
between (1) and (2) must be deducted from regulatory capital.
$60 x 25% = $15
(3)
15
$20 > $15, so the amount
deducted is $20-$15 = $5
LESS: DTAs arising from temporary differences that could not be realized through
net operating loss carrybacks, net of related valuation allowances and net of DTLs,
that exceed 25 percent of item 12.
(1) Determine the amount of DTAs arising from temporary differences that could not be
realized through net operating loss carrybacks net of any related valuation allowances
and net of associated DTLs (for example, DTAs resulting from the institution’s allowance
for loan and lease losses (ALLL) or allowances for credit losses (ACL), as applicable).
(2) If the amount in (1) is greater than 25 percent of Schedule RC-R, Part I, item 12, report
the difference in this item 15.
(3) If the amount in (1) is less than or equal to 25 percent of Schedule RC-R, Part I, item 12,
enter zero in this item 15.
DTAs arising from temporary differences that could be realized through net operating loss
carrybacks are not subject to deduction, and instead must be assigned to a 100 percent riskweight category. For an institution that is a member of a consolidated group for tax purposes,
the amount of DTAs that could be realized through net operating loss carrybacks may not
exceed the amount that the institution could reasonably expect to have refunded by its parent
holding company.
Apply a 250 percent risk-weight to DTAs arising from temporary differences that could not be
realized through net operating loss carrybacks that are not deducted from common equity
tier 1 capital, without regard to any associated DTLs, except for institutions subject to the
CBLR framework.
Example and a worksheet calculation:
Assumptions:
For example, assume that an institution:
• Has $20 of DTAs arising from temporary differences that could not be realized
through net operating loss carrybacks, net of any related valuation allowances and
net of associated DTLs; and
• Has total common equity tier 1 capital subtotal (reported in RC-R, Part I, item 12)
of $60.
FFIEC 051
RC-R-14
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
15
(cont.)
(1)
(2)
(3)
Total amount of DTAs arising from temporary differences that
could not be realized through net operating loss carrybacks,
net of any related valuation allowances and net of associated
DTLs.
Multiply the total common equity tier 1 capital subtotal by
25 percent.
Determine if (1) is greater than (2), and, if so, the difference
between (1) and (2) must be deducted from regulatory capital.
$20
$60 x 25% = $15
$20 > $15, so the amount
deducted is $20-$15 = $5
16
Not applicable.
17
LESS: Deductions applied to common equity tier 1 capital due to insufficient amounts
of additional tier 1 capital and tier 2 capital to cover deductions. Report the total amount
of deductions related to investments in own additional tier 1 and tier 2 capital instruments,
reciprocal cross-holdings, and investments in the capital of unconsolidated financial
institutions if the reporting institution does not have a sufficient amount of additional tier 1
capital before deductions (reported in Schedule RC-R, Part I, item 23) and tier 2 capital
before deductions (reported in Schedule RC-R, Part I, item 42.a) to absorb these deductions
in Schedule RC-R, Part I, items 24 or 45, as appropriate.
Since the community bank leverage ratio (CBLR) framework does not have a total capital
requirement, a CBLR electing institution is neither required to calculate tier 2 capital nor make
any deductions that would have been taken from tier 2 capital under the generally applicable
capital rule. Therefore, if a CBLR electing institution has investments in the capital
instruments of an unconsolidated financial institution that would qualify as tier 2 capital of the
CBLR electing institution under the generally applicable capital rule (tier 2 qualifying
investments), and the institution’s total investments in the capital of unconsolidated financial
institutions exceed the threshold for deduction, the institution is not required to deduct the
tier 2 qualifying investments.
18
Total adjustments and deductions for common equity tier 1 capital. Report the sum of
Schedule RC-R, Part I, items 13 through 17.
19
Common equity tier 1 capital. Report Schedule RC-R, Part I, item 12 less item 18. Except
for a CBLR electing institution under the CBLR framework, the amount reported in this item is
the numerator of the institution’s common equity tier 1 risk-based capital ratio.
Additional Tier 1 Capital
20
Additional tier 1 capital instruments plus related surplus. Report the portion of
noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, and any other capital instrument and related surplus that satisfy all the eligibility
criteria for additional tier 1 capital instruments in section 20(c) of the regulatory capital rules
of the institution’s primary federal supervisor.
Include instruments that (i) were issued under the Small Business Jobs Act of 2010, or, prior
to October 4, 2010, under the Emergency Economic Stabilization Act of 2008 and (ii) were
included in the tier 1 capital under the primary federal supervisor’s general risk-based capital
FFIEC 051
RC-R-15
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
20
(cont.)
permanently). Also include additional tier 1 capital instruments issued as part of an ESOP,
provided that the repurchase of such instruments is required solely by virtue of ERISA for an
institution that is not publicly-traded.
21
Non-qualifying capital instruments subject to phase out from additional tier 1 capital.
Report the amount of non-qualifying capital instruments that may not be included in additional
tier 1 capital, as described in Schedule RC-R, Part I, item 20, and that is subject to phase out
from additional tier 1 capital.
Depository institutions may include in regulatory capital debt or equity instruments issued
prior to September 12, 2010, that do not meet the criteria for additional tier 1 or tier 2 capital
instruments in section 20 of the regulatory capital rules but that were included in tier 1 or
tier 2 capital, respectively, as of September 12, 2010 (non-qualifying capital instruments
issued prior to September 12, 2010) up to the percentage of the outstanding principal amount
of such non-qualifying capital instruments as of January 1, 2014, in accordance with Table 2
below.
The amount of non-qualifying capital instruments that is excluded from additional tier 1 capital
in accordance with Table 2 may be included in tier 2 capital (in Schedule RC-R, Part I,
item 40) without limitation, provided the instruments meet the criteria for tier 2 capital set forth
in section 20(d) of the regulatory capital rules.
Transition provisions for non-qualifying capital instruments includable in additional
tier 1 or tier 2 capital:
Table 2 applies separately to additional tier 1 and tier 2 non-qualifying capital instruments.
For example, an institution that has $100 in non-qualifying tier 1 instruments may include up
to $20 in additional tier 1 capital in 2020, and $10 in 2021. If that same institution has $100 in
non-qualifying tier 2 instruments, it may include up to $20 in tier 2 capital in 2020 and $10 in
2021.
If the institution is involved in a merger or acquisition, it should treat its non-qualifying capital
instruments following the requirements in section 300 of the regulatory capital rules.
Table 2 – Percentage of non-qualifying capital instruments includable in additional
tier 1 or tier 2 capital during the transition period
FFIEC 051
Transition period
Percentage of non-qualifying capital instruments
includable in additional tier 1 or tier 2 capital
Calendar year 2017
Calendar year 2018
Calendar year 2019
Calendar year 2020
Calendar year 2021
Calendar year 2022
and thereafter
50
40
30
20
10
0
RC-R-16
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
22
Caption and Instructions
Tier 1 minority interest not included in common equity tier 1 capital. Report the amount
of tier 1 minority interest not included in common equity tier 1 capital that is includable at the
consolidated level, calculated as described below and in section 21 of the regulatory capital
rules.
Non-advanced approaches institutions are able to include tier 1 minority interest up to 10
percent of the parent banking organization’s tier 1 capital. The 10 percent limitation is
measured before the inclusion of any minority interest and after the deductions from and
adjustments to the regulatory capital of the parent banking organization described in sections
22(a) and (b) of the regulatory capital rules. Tier 1 minority interest is the portion of tier 1
capital in a reporting institution’s subsidiary not attributable, directly or indirectly, to the parent
institution. Note that an institution may only include tier 1 minority interest if the capital
instruments issued by the subsidiary meet all of the criteria for tier 1 capital (qualifying tier 1
capital instruments).
Example and a worksheet calculation: Calculate tier 1 minority interest not included in
common equity tier 1 minority interest includable at the reporting institution’s level as follows:
Assumptions:
•
•
•
•
•
•
•
(1)
(2)
(3)
(4)
FFIEC 051
This is a continuation of the example used in the instructions for Schedule RC-R, Part I,
item 4.
Assumptions and calculation from Schedule RC-R, Part I, item 4:
o The parent banking organization’s common equity tier 1 before minority interest and
common equity tier 1 capital adjustments and deductions is $100.
o Common equity tier 1 capital adjustments and deductions is $10.
The parent banking organization’s additional tier 1 capital instruments before minority
interest and additional tier 1 deductions equal $15.
Additional tier 1 capital deductions equal $4.
Subsidiary A has $6 of additional tier 1 minority interest (that is, owned by minority
shareholders).
Subsidiary B has $6 of additional tier 1 minority interest (that is, owned by minority
shareholders).
The subsidiary’s tier 1 minority interest (that is, owned by minority shareholders) is $24
($12 of common equity tier 1 minority interest and $12 of minority interest in the form of
additional tier 1 instruments).
Common equity tier 1 capital before CET1 minority interest + Additional tier
1 capital instruments before minority interest - additional tier 1 capital
deductions = Schedule RC-R, Part I, sum of items 19, 20, and 21, minus
item 4 minus item 24.
Multiply step (1) by 10 percent. This is the maximum includable tier 1
minority interest from all subsidiaries.
Determine the lower of (2) or the tier 1 minority interest from all
subsidiaries.
From (3), subtract out the common equity tier 1 minority interest reported in
Schedule RC-R, Part I, item 4. This is the “tier 1 minority interest not
included in common equity tier 1 minority interest includable at the reporting
institution’s level” to be included in Schedule RC-R, Part I, item 22.
RC-R-17
(6-20)
$90+$15$4=$101
$101 x 10%
= $10.1
Minimum of
($10.1 from
Step 2 or $24
from the
assumptions)
= $10.1
$10.1 - $9 =
$1.1
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
23
Additional tier 1 capital before deductions. Report the sum of Schedule RC-R, Part I,
items 20, 21, and 22.
24
LESS: Additional tier 1 capital deductions. Report additional tier 1 capital deductions as
the sum of the following elements.
Note that an institution should report additional tier 1 capital deductions in this item 24
irrespective of the amount of additional tier 1 capital before deductions reported in
Schedule RC-R, Part I, item 23. If an institution does not have a sufficient amount of
additional tier 1 capital before deductions in item 23 to absorb these deductions, then the
institution must deduct the shortfall from common equity tier 1 capital in Schedule RC-R,
Part I, item 17. For example, if an institution reports $0 of “Additional tier 1 capital before
deductions” in Schedule RC-R, Part I, item 23, and has $100 of additional tier 1 capital
deductions, the institution would report $100 in this item 24, add $100 to the amount to be
reported in Schedule RC-R, Part I, item 17, and report $0 in Schedule RC-R, Part I, item 25,
“Additional tier 1 capital.”
(1) Investments in own additional tier 1 capital instruments. Report the institution’s
investments in (including any contractual obligation to purchase) its own additional tier 1
capital instruments, whether held directly or indirectly.
An institution may deduct gross long positions net of short positions in the same
underlying instrument only if the short positions involve no counterparty risk.
The institution must look through any holdings of index securities to deduct investments
in its own capital instruments. In addition:
(i) Gross long positions in investments in an institution’s own regulatory capital
instruments resulting from holdings of index securities may be netted against short
positions in the same index;
(ii) Short positions in index securities that are hedging long cash or synthetic positions
can be decomposed to recognize the hedge; and
(iii) The portion of the index that is composed of the same underlying exposure that is
being hedged may be used to offset the long position if both the exposure being
hedged and the short position in the index are covered positions under the market
risk capital rule, and the hedge is deemed effective by the institution’s internal control
processes.
(2) Reciprocal cross-holdings in the capital of financial institutions. Include investments
in the additional tier 1 capital instruments of other financial institutions that the institution
holds reciprocally, where such reciprocal cross-holdings result from a formal or informal
arrangement to swap, exchange, or otherwise intend to hold each other’s capital
instruments. If the institution does not have a sufficient amount of a specific component
of capital to effect the required deduction, the shortfall must be deducted from the next
higher (that is, more subordinated) component of regulatory capital.
For example, if an institution is required to deduct a certain amount from additional tier 1
capital and it does not have additional tier 1 capital, then the deduction should be from
common equity tier 1 capital in Schedule RC-R, Part I, item 17.
FFIEC 051
RC-R-18
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
24
(cont.)
(3) Investments in the capital of unconsolidated financial institutions that exceed the
25 percent threshold to be deducted from additional tier 1 capital. Report the total
amount of investments in the capital of unconsolidated financial institutions in the form of
additional tier 1 capital that exceeds the 25 percent threshold. Calculate this amount as
follows:
(1) Determine the amount of investments in the capital of unconsolidated financial
institutions, net of associated DTLs.
(2) If the amount in (1) is greater than 25 percent of Schedule RC-R, Part I, item 12,
report the difference across items 13, 24, or 45, depending on the tier of capital for
which the investments in the capital of unconsolidated financial institutions qualify.
The institution can elect which investments it must deduct and which it must risk
weight. Depending on the institution’s election and the component of capital for
which the underlying instrument would qualify will determine if it will be deducted and
reported in Schedule RC-R, Part I, item 13, or be deducted and reported in
Schedule RC-R, Part I, item 24 or 45.
(3) If the amount in (1) is less than 25 percent of Schedule RC-R, Part I, item 12, no
deduction is needed.
See Schedule RC-R, Part I, item 13, for an example of how to deduct amounts of
investments in the capital of unconsolidated financial institutions that exceed the
25 percent threshold.
Since the community bank leverage ratio framework does not have a total capital
requirement, a CBLR electing institution is neither required to calculate tier 2 capital nor
make any deductions that would have been taken from tier 2 capital under the generally
applicable rule. Therefore, if a CBLR electing institution has investments in the capital
instruments of an unconsolidated financial institution that would qualify as tier 2 capital of
the CBLR electing institution under the generally applicable rule (tier 2 qualifying
investments), and the institution’s total investments in the capital of unconsolidated
financial institutions exceed the threshold for deduction, the institution is not required to
deduct the tier 2 qualifying investments.
(4) Other adjustments and deductions. Include adjustments and deductions applied to
additional tier 1 capital due to insufficient tier 2 capital to cover deductions (related to
reciprocal cross-holdings and investments in the tier 2 capital of unconsolidated financial
institutions).
CBLR eligible institutions that opt into the community bank leverage ratio framework are
not required to calculate tier 2 capital and would not be required to make any deductions
that would be taken from tier 2 capital.
In addition, insured state banks with real estate subsidiaries whose continued operations
have been approved by the FDIC pursuant to Section 362.4 of the FDIC's Rules and
Regulations generally should include as a deduction from additional tier 1 capital their equity
investment in the subsidiary. (Insured state banks with FDIC-approved phase-out plans for
real estate subsidiaries need not make these deductions.) Insured state banks with other
subsidiaries (that are not financial subsidiaries) whose continued operations have been
approved by the FDIC pursuant to Section 362.4 should include as a deduction from
additional Tier 1 capital the amount required by the approval order.
FFIEC 051
RC-R-19
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
25
Caption and Instructions
Additional tier 1 capital. Report the greater of Schedule RC-R, Part I, item 23 minus
item 24, or zero.
Tier 1 Capital
26
Tier 1 capital. Report the sum of Schedule RC-R, Part I, items 19 and 25.
Total Assets for the Leverage Ratio
27
Average total consolidated assets. All institutions must report the amount of average total
consolidated assets as reported in Schedule RC-K, item 9.
An institution that has adopted FASB Accounting Standards Update No. 2016-13, which
governs the accounting for credit losses and introduces the current expected credit losses
methodology (CECL), and has elected to apply the 3-year CECL transition provision (3-year
CECL electing institution) should increase its average total consolidated assets by its
applicable CECL transitional amount, in accordance with section 301(c)(1)(iv) of the
regulatory capital rules. For example, a 3-year CECL electing institution should increase its
average total consolidated assets as reported on the Call Report for purposes of the leverage
ratio by 75 percent of its CECL transitional amount during the first year of the transition
period, 50 percent of its CECL transitional amount during the second year of the transition
period, and 25 percent of its CECL transitional amount during the third year of the transition
period (see Table 1 in the instructions for Schedule RC-R, Part I, item 2).
28
LESS: Deductions from common equity tier 1 capital and additional tier 1 capital.
Report the sum of the amounts deducted from common equity tier 1 capital and additional
tier 1 capital in Schedule RC-R, Part I, items 6, 7, 8, 10.b, 13 through 15, 17, and 24. Also
exclude the amount reported in Schedule RC-R, Part I, item 17, that is due to insufficient
amounts of additional tier 1 capital, and which is included in the amount reported in
Schedule RC-R, Part I, item 24. (This is to avoid double counting.)
29
LESS: Other deductions from (additions to) assets for leverage ratio purposes. Based
on the regulatory capital rules of the bank’s primary federal supervisor, report the amount of
any deductions from (additions to) total assets for leverage ratio purposes that are not
included in Schedule RC-R, Part I, item 28, as well as the items below, if applicable. If the
amount is a net deduction, report it as a positive value in this item. If the amount is a net
addition, report it as a negative value in this item.
Institutions that make the AOCI opt-out election in Schedule RC-R, Part I, item 3.a –
Defined benefit postretirement plans:
If the reporting institution sponsors a single-employer defined benefit postretirement plan,
such as a pension plan or health care plan, accounted for in accordance with ASC Topic 715,
Compensation-Retirement Benefits (formerly FASB Statement No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans”), the institution
should adjust total assets for leverage ratio purposes for any amounts included in
Schedule RC, item 26.b, “Accumulated other comprehensive income” (AOCI), affecting
assets as a result of the initial and subsequent application of ASC Topic 715. The
adjustment also should take into account subsequent amortization of these amounts from
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Part I. (cont.)
Item No.
Caption and Instructions
29
(cont.)
AOCI into earnings. The intent of the adjustment reported in this item (together with the
amount reported in Schedule RC-R, Part I, item 9.d) is to reverse the effects on AOCI of
applying ASC Topic 715 for regulatory capital purposes. Specifically, assets recognized or
derecognized as an adjustment to AOCI as part of the incremental effect of applying
ASC Topic 715 should be reported as an adjustment to total assets for leverage ratio
purposes. For example, the derecognition of an asset recorded as an offset to AOCI as part
of the initial incremental effect of applying ASC Topic 715 should be added back to total
assets for leverage ratio purposes by reporting the amount as a negative number in this item.
As another example, the portion of a benefit plan surplus asset that is included in
Schedule RC, item 26.b, as an increase to AOCI and in total assets should be deducted from
total assets for leverage ratio purposes by reporting the amount as a positive number in this
item.
Institutions that do not make the AOCI opt-out election – Available-for-sale debt
securities:
Available-for-sale debt securities are reflected at amortized cost when calculating average
total consolidated assets for Schedule RC-K, item 9. Therefore, include in this item as a
deduction from (addition to) assets for leverage ratio purposes the amount needed to adjust
the quarterly average for available-for-sale debt securities included in Schedule RC-K, item 9,
from an average based on amortized cost to an average based on fair value. If the deferred
tax effects of any net unrealized gains (losses) on available-for-sale debt securities were
excluded from the determination of average total consolidated assets for Schedule RC-K,
item 9, also include in this item as a deduction from (addition to) assets for leverage ratio
purposes the quarterly average amount necessary to reverse the effect of this exclusion on
the quarterly average amount of net deferred tax assets included in Schedule RC-K, item 9.
Financial Subsidiaries:
If a financial subsidiary is not consolidated into the bank for purposes of the bank’s balance
sheet, include in this item 29 as a deduction from the bank’s average total assets (as
reported in Schedule RC-R, Part I, item 27) the quarterly average for the bank's ownership
interest in the financial subsidiary accounted for under the equity method of accounting that is
included in the bank’s average total assets reported in Schedule RC-K, item 9.
If a financial subsidiary is consolidated into the bank for purposes of the bank’s balance
sheet, include in this item 29 as a deduction from the bank’s average total assets (as
reported in Schedule RC-R, Part I, item 27) the quarterly average of the assets of the
subsidiary that have been included in the bank’s consolidated average total assets reported
in Schedule RC-K, item 9; minus any deductions from common equity tier 1 capital and
additional tier 1 capital attributable to the financial subsidiary that have been included in
Schedule RC-R, Part I, item 28; and plus the quarterly average of bank assets representing
claims on the financial subsidiary, other than the bank’s ownership interest in the subsidiary,
that were eliminated in consolidation. Because the bank’s claims on the subsidiary were
eliminated in consolidation, these bank assets were not included in the bank’s consolidated
average total assets reported in Schedule RC-K, item 9.
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Part I. (cont.)
Item No.
Caption and Instructions
29
(cont.)
Non-Includable Subsidiaries:
A savings association with a non-includable subsidiary should include in this item 29
a deduction from average total assets (as reported in Schedule RC-R, Part I, item 27)
determined in the same manner as described above for financial subsidiaries, except that
for a non-includable subsidiary accounted for under the equity method of accounting, the
deduction should be the quarterly average for the savings association’s outstanding
investments (both equity and debt) in, and extensions of credit to, the subsidiary.
30
Total assets for the leverage ratio. Report Schedule RC-R, Part I, item 27, less items 28
and 29.
Leverage Ratio
31
Leverage ratio. Report the institution’s leverage ratio as a percentage, rounded to four
decimal places. Divide Schedule RC-R, Part I, item 26 by item 30.
31.a
Does your institution have a community bank leverage ratio (CBLR) framework
election in effect as of the quarter-end report date?
Enter “1” for Yes or enter “0” for No. Refer to the qualifying criteria for using the CBLR
framework, which are explained in the instructions for Schedule RC-R, Part I, items 32
through 34, below.
Qualifying Criteria and Other Information for CBLR Institutions
Schedule RC-R, Part I, items 32 through 37 and, if applicable, items 38.a through 38.c, are to be
completed only by qualifying institutions that have elected to adopt the community bank leverage ratio
(CBLR) framework or are within the grace period as of the quarter-end report date. (For further
information on the grace period, see the General Instructions for Part I.)
If your institution entered “1” in item 31.a, then items 32 through 37 and, if applicable, items 38.a through
38.c, must be completed. Institutions that do not qualify for or have not adopted the community bank
leverage ratio framework as of the quarter-end report date should leave items 32 through 38.c blank and
go to Schedule RC-R, Part I, item 39. A qualifying institution can opt out of the community bank leverage
ratio framework by completing Schedule RC-R, Parts I and II, excluding Schedule RC-R, Part I, items 32
through 38.c.
32
Total assets. Report total assets from Schedule RC, item 12. A bank’s total assets must be
less than $10 billion as part of the qualifying criteria for the CBLR framework.
33
Trading assets and trading liabilities. Report in column A the sum of trading assets from
Schedule RC, item 5, and trading liabilities from Schedule RC, item 15 (i.e., added, not
netted).
Report in column B the sum of trading assets and trading liabilities as a percentage of total
assets by dividing the amount of trading assets and trading liabilities reported in column A of
this item by total assets reported in Schedule RC-R, Part I, item 32, above, rounded to four
decimal places. The percentage reported in this item must be 5 percent or less of total
assets as part of the qualifying criteria for the CBLR framework.
34
FFIEC 051
Off-balance sheet exposures. Report in the appropriate subitem the specified off-balance
sheet exposure amounts.
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Part I. (cont.)
Item No.
34.a
Caption and Instructions
Unused portion of conditionally cancellable commitments. Report the amount of unused
commitments, excluding unconditionally cancellable commitments that are reported in
Schedule RC-R, Part I, item 35, below. Include in this item legally binding arrangements
(other than letters of credit, which are reported in Schedule RC-R, Part I, item 34.c) that
obligate a bank to extend credit or to purchase assets. Where a bank provides a
commitment structured as a syndication or participation, include the amount for the bank’s
pro rata share of the commitment.
In general, this item would include the unused portion of commitments reported in
Schedule RC-L, item 1, that are not unconditionally cancelable.
34.b
Securities lent and borrowed. Report the sum of securities lent from Schedule RC-L,
item 6.a, and securities borrowed from Schedule RC-L, item 6.b.
34.c
Other off-balance sheet exposures. Report the sum of:
FFIEC 051
•
Financial standby letters of credit: Include the amount outstanding and unused of
financial standby letters of credit reported in Schedule RC-L, item 2.
•
Transaction-related contingent items, including performance bonds, bid bonds,
warranties, and performance standby letters of credit: Report transaction-related
contingent items, which include the amount outstanding and unused of performance
standby letters of credit reported in Schedule RC-L, item 3, and any other transactionrelated contingent items.
•
Self-liquidating, trade-related contingent items that arise from the movement of
goods: Include the amount outstanding and unused of self-liquidating, trade-related
contingent items that arise from the movement of goods reported in Schedule RC-L,
item 4, “Commercial and similar letters of credit.”
•
Sold credit protection in the form of guarantees and credit derivatives: Include the
notional amount of sold credit protection in the form of guarantees or credit derivatives
(such as written credit option contracts). Do not include any non-credit derivatives, such
as foreign exchange swaps and interest rate swaps.
•
Credit-enhancing representations and warranties: Include the off-balance sheet
amount of exposures transferred with credit-enhancing representations and warranties as
defined in §.2 of the regulatory capital rule. Credit-enhancing representations and
warranties obligate an institution “to protect another party from losses arising from the
credit risk of the underlying exposures” and “include provisions to protect a party from
losses resulting from the default or nonperformance of the counterparties of the
underlying exposures or from an insufficiency in the value of the collateral backing the
underlying exposures.” Thus, when loans or other assets are sold “with recourse” and
the recourse arrangement provides protection from losses as described in the preceding
definition, the recourse arrangement constitutes a credit-enhancing representation and
warranty.
•
Forward agreements that are not derivative contracts: Include the notional amount of
all forward agreements, which are defined in §.2 of the regulatory capital rule as legally
binding contractual obligations to purchase assets with certain drawdown at a specified
future date, not including commitments to make residential mortgage loans or forward
foreign exchange contracts.
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Part I. (cont.)
Item No.
Caption and Instructions
34.c
(cont.)
•
34.d
Off-balance sheet securitizations: Report the notional amount of off-balance sheet
items that qualify as securitization exposures. Refer to the definitions of securitization
exposure, synthetic securitization, traditional securitization, and tranche in §.2 of the
regulatory capital rules and to §.42 of the regulatory capital rules to calculate the relevant
exposure amount.
Total off-balance sheet exposures. Report in column A the sum of Schedule RC-R, Part I,
items 34.a through 34.c.
Report in column B total off-balance sheet exposures as a percentage of total assets by
dividing the total amount of off-balance sheet exposures reported in column A of this item by
total assets reported in Schedule RC-R, Part I, item 32, above, rounded to four decimal
places. The percentage reported in this item must be 25 percent or less as part of the
qualifying criteria for the CBLR framework.
35
Unconditionally cancellable commitments. Report the unused portion of commitments
(facilities) that are unconditionally cancellable (without cause) at any time by the bank (to the
extent permitted by applicable law). In general, this item would include the amounts reported
in Schedule RC-L, items 1.a, 1.b, and 1.e.
In the case of consumer home equity or mortgage lines of credit secured by liens on 1-4
family residential properties, a bank is deemed able to unconditionally cancel the commitment
if, at its option, it can prohibit additional extensions of credit, reduce the credit line, and
terminate the commitment to the full extent permitted by relevant federal law.
Retail credit cards and related plans, including overdraft checking plans and overdraft
protection programs, are included in this item if the bank has the unconditional right to cancel
the line of credit at any time in accordance with applicable law.
36
Investments in the tier 2 capital of unconsolidated financial institutions. Report the
amount of investments in the tier 2 capital of unconsolidated financial institutions, net of
associated deferred tax liabilities.
37
Allocated transfer risk reserve. Report the entire amount of any allocated transfer risk
reserve (ATRR) the reporting bank is required to establish and maintain as specified in
Section 905(a) of the International Lending Supervision Act of 1983, in the agency
regulations implementing the Act (Subpart D of Federal Reserve Regulation K, Part 347 of
the FDIC's Rules and Regulations, and 12 CFR Part 28, Subpart C (OCC)), and in any
guidelines, letters, or instructions issued by the agencies. The entire amount of the ATRR
equals the ATRR related to loans and leases held for investment (which is included in
Schedule RC, item 4,c, “Allowance for loan and lease losses”) plus the ATRR for assets other
than loans and leases held for investment.
NOTE: Schedule RC-R, Part I, items 38.a through 38.c, should be completed only by institutions that
have adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the
accounting for credit losses. Institutions that have not adopted ASU 2016-13 should leave items 38.a
through 38.c blank.
38
FFIEC 051
Amount of allowances for credit losses on purchased credit-deteriorated assets.
ASU 2016-13 introduces the concept of purchased credit-deteriorated (PCD) assets as a
replacement for purchased credit-impaired (PCI) assets. The PCD asset definition covers a
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FFIEC 051
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Part I. (cont.)
Item No.
Caption and Instructions
38
(cont.)
broader range of assets than the PCI asset definition. As defined in ASU 2016-13,
“purchased credit-deteriorated assets” are acquired individual financial assets (or acquired
groups of financial assets with similar risk characteristics) accounted for in accordance with
ASC Topic 326, Financial Instruments‒Credit Losses, that, as of the date of acquisition, have
experienced a more-than-insignificant deterioration in credit quality since origination, as
determined by the acquiring institution’s assessment.
ASU 2016-13 requires institutions to estimate and record a credit loss allowance for a PCD
asset at the time of purchase. The credit loss allowance is then added to the purchase price
to determine the amortized cost basis of the asset for financial reporting purposes.
Post-acquisition increases in credit loss allowances on PCD assets will be established
through a charge to earnings. This accounting treatment for PCD assets is different from the
current treatment of PCI assets, for which institutions are not permitted to estimate and
recognize credit loss allowances at the time of purchase. Rather, in general, credit loss
allowances for PCI assets are estimated subsequent to the purchase only if there is
deterioration in the expected cash flows from the assets.
38.a
Loans and leases held for investment. Report all allowances for credit losses on PCD
loans and leases held for investment.
38.b
Held-to-maturity debt securities. Report all allowances for credit losses on PCD held-tomaturity debt securities.
38.c
Other financial assets measured at amortized cost. Report all allowances for credit
losses on all other PCD financial assets, excluding PCD loans and leases held for
investment, held-to-maturity debt securities, and available-for-sale debt securities.
NOTE: A qualifying institution that has a community bank leverage ratio (CBLR) framework election in
effect as of the quarter-end report date (i.e., entered “1” for Yes in Schedule RC-R, Part I, item 31.a)
should not complete Schedule RC-R, Part I, items 39 through 54, and should not complete
Schedule RC-R, Part II.
Tier 2 Capital
39
Tier 2 capital instruments plus related surplus. Report the portion of cumulative perpetual
preferred stock and related surplus included in Schedule RC, item 23; the portion of
subordinated debt and limited-life preferred stock and related surplus included in
Schedule RC, item 19; and any other capital instrument and related surplus that satisfy all the
eligibility criteria for tier 2 capital instruments in section 20(d) of the regulatory capital rules of
the institution’s primary federal supervisor.
Include instruments that (i) were issued under the Small Business Jobs Act of 2010, or, prior
to October 4, 2010, under the Emergency Economic Stabilization Act of 2008 and (ii) were
included in the tier 2 capital non-qualifying capital instruments (e.g., trust preferred stock and
cumulative perpetual preferred stock) under the primary federal supervisor’s general riskbased capital rules.
40
Non-qualifying capital instruments subject to phase-out from tier 2 capital. Report
the total amount of non-qualifying capital instruments that were included in tier 2 capital and
outstanding as of January 1, 2014, and that are subject to phase-out.
Depository institutions may include in regulatory capital debt or equity instruments issued
prior to September 12, 2010, that do not meet the criteria for additional tier 1 or tier 2 capital
FFIEC 051
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(6-20)
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Part I. (cont.)
Item No.
Caption and Instructions
40
(cont.)
instruments in section 20 of the regulatory capital rules but that were included in tier 1 or
tier 2 capital respectively as of September 12, 2010 (non-qualifying capital instruments issued
prior to September 12, 2010) up to the percentage of the outstanding principal amount of
such non-qualifying capital instruments as of January 1, 2014, in accordance with Table 2 in
the instructions for Schedule RC-R, item 21.
41
Total capital minority interest that is not included in tier 1 capital. Report the aggregate
amount of total capital minority interest, calculated as described below and in section 21 of
the regulatory capital rules. Non-advanced approaches institutions are able to include total
capital minority interest up to 10 percent of the parent banking organization’s total capital.
The 10 percent limitation is measured before the inclusion of any minority interest and after
the deductions from and adjustments to the regulatory capital of the parent banking
organization described in sections 22(a) and (b) of the capital rule. Total capital minority
interest is the portion of total capital in a reporting institution’s subsidiary not attributable,
directly or indirectly, to the parent institution. Note that a reporting institution may only
include total capital minority interest if the capital instruments issued by the subsidiary meet
all of the criteria for capital (qualifying capital instruments).
Example and a worksheet calculation: Calculate total capital minority interest includable at
the reporting institution’s level as follows:
Assumptions:
• This is a continuation of the example used in the instructions for Schedule RC-R, Part I,
items 4 and 22.
• Assumptions and calculation from Schedule RC-R, Part I, item 4:
o Includable common equity tier 1 minority interest (see Schedule RC-R, Part I, item 4)
is $9.
o The parent banking organization’s common equity tier 1 capital before minority
interest and after deductions and adjustments is $90.
• Assumptions and calculation from Schedule RC-R, Part I, item 22:
o Includable tier 1 minority interest that is not included in common equity tier 1 minority
interest (see Schedule RC-R, Part I, item 22) is $1.1.
o The parent banking organization’s additional tier 1 capital before minority interest and
after deductions is $11 ($15 - $4).
• The parent banking organization’s tier 2 capital instruments before minority interest and
allowance for loan and lease losses includable in tier 2 capital (or adjusted allowances for
credit losses (AACL), as applicable) is $20. Additional tier 2 capital deductions equal $2.
• The subsidiary’s total capital minority interest (that is, owned by minority shareholders)
is $14.
• Subsidiary A has $8 of minority interest in the form of tier 2 instruments (that is, owned by
minority shareholders).
• Subsidiary B has $6 of minority interest in the form of tier 2 instruments (that is, owned by
minority shareholders).
FFIEC 051
RC-R-26
(6-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
41
(cont.)
(1)
(2)
(3)
(4)
42
Tier 1 capital after deductions and before minority interest + tier 2 capital
instruments before minority interest + allowance for loan and lease losses
(ALLL) or adjusted allowances for credit losses (AACL), as applicable, for
regulatory capital purposes that is includable in tier 2 capital - tier 2 capital
deductions = Schedule RC-R, Part I, sum of items 26, 39, 40, and 42.a,
minus item 45.
Multiply step (1) by 10 percent. This is the maximum includable total capital
minority interest from all subsidiaries.
Determine the lower of (2) or the total capital minority interest from all
subsidiaries.
From (3), subtract out the includable common equity tier 1 minority interest
reported in Schedule RC-R, Part I, item 4, and includable tier 1 minority
interest that is not included in common equity tier 1 minority interest
reported in Schedule RC-R, Part I, item 22. This is the “total capital
minority interest not included in tier 1 minority interest includable at the
reporting institution’s level” to be included in Schedule RC-R, Part I,
item 41.
$101 + $20 $2 = $119
$119 x 10%
= $11.9
Minimum of
($11.9 from
Step 2 or $38
from the
assumptions)
= $11.9
$11.9 - $9 $1.1 = $1.8
Allowance for loan and lease losses includable in tier 2 capital. Report the portion of
the institution’s allowance for loan and lease losses (ALLL) or adjusted allowances for credit
losses (AACL), as applicable, for regulatory capital purposes that is includable in tier 2
capital. None of the institution’s allocated transfer risk reserve, if any, is includable in tier 2
capital.
For an institution that has not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses and introduces the current
expected credit losses methodology (CECL), the institution’s ALLL for regulatory capital
purposes equals Schedule RC, item 4.c, “Allowance for loan and lease losses”; less any
allocated transfer risk reserve included in Schedule RC, item 4.c; plus Schedule RC-G,
item 3, “Allowance for credit losses on off-balance sheet credit exposures.”
For an institution that has adopted ASU 2016-13, the institution’s AACL for regulatory capital
purposes equals Schedule RI-B, Part II, item 7, columns A and B, “Balance end of current
period” for loans and leases held for investment and held-to-maturity debt securities,
respectively; plus Schedule RI-B, Part II, Memorandum item 6, “Allowance for credit losses
on other financial assets measured at amortized cost (not included in item 7, above)”;
less Schedule RC-R, Part II, sum of Memorandum items 4.a, 4.b, and 4.c, “Amount of
allowances for credit losses on purchased credit-deteriorated assets” for loans and leases
held for investment, held-to-maturity debt securities, and other financial assets measured
at amortized cost, respectively; less any allocated transfer risk reserve included in
Schedule RI-B, Part II, item 7, columns A and B, and Memorandum item 6; plus
Schedule RC-G, item 3, ‘‘Allowance for credit losses on off-balance sheet credit exposures.’’
An institution that has adopted ASU 2016-13 and has elected to apply the 3-year CECL
transition provision (3-year CECL electing institution) should decrease its applicable AACL
transitional amount
FFIEC 051
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Part I. (cont.)
Item No.
Caption and Instructions
42
(cont.)
in accordance with section 301 of the regulatory capital rules. Specifically, a 3-year CECL
electing institution should reduce the amount of its AACL includable in tier 2 capital by
75 percent of its AACL transitional amount during the first year of the transition period,
50 percent of its AACL transitional amount during the second year of the transition period,
and 25 percent of its AACL transitional amount during the third year of the transition period
(see Table 1 in the instructions for Schedule RC-R, Part I, item 2).
The amount to be reported in this item is the lesser of (1) the institution’s ALLL or AACL,
as applicable, for regulatory capital purposes, as defined above, or (2) 1.25 percent of the
institution’s risk-weighted assets base for the ALLL or AACL calculation, as applicable, as
reported in Schedule RC-R, Part II, item 26. In calculating the risk-weighted assets base
for this purpose, an institution would not include items that are deducted from capital under
section 22(a). However, an institution would include risk-weighted asset amounts of items
deducted from capital under sections 22(c) through (f) of the regulatory capital rule. While
amounts deducted from capital under sections 22(c) through (f) are included in the
risk-weighted assets base for the ALLL or AACL calculation, as applicable, such amounts
are excluded from standardized total risk-weighted assets used in the denominator of the
risk-based capital ratios.
The amount, if any, by which an institution’s ALLL or AACL, as applicable, for regulatory
capital purposes exceeds 1.25 percent of the institution’s risk-weighted assets base for the
ALLL or AACL calculation (as reported in Schedule RC-R, Part II, item 26), as applicable,
should be reported in Schedule RC-R, Part II, item 29, “LESS: Excess allowance for loan
and lease losses.” For an institution that has not adopted ASU 2016-13, the sum of the
amount of ALLL includable in tier 2 capital reported in Schedule RC-R, Part I, item 42, plus
the amount of excess ALLL reported in Schedule RC-R, Part II, item 29, must equal
Schedule RC, item 4.c, less any allocated transfer risk reserve included in Schedule RC,
item 4.c, plus Schedule RC-G, item 3.
43
FFIEC 051
Not applicable.
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Part I. (cont.)
Item No.
Caption and Instructions
44
Tier 2 capital before deductions. Report the sum of Schedule RC-R, Part I, items 39
through 42.
45
LESS: Tier 2 capital deductions. Report total tier 2 capital deductions as the sum of the
following elements.
Note that an institution should report tier 2 capital deductions in this item 45 irrespective of
the amount of tier 2 capital before deductions reported in Schedule RC-R, Part I, item 44.
If an institution does not have a sufficient amount of tier 2 capital before deductions in item 44
to absorb these deductions, then the institution must deduct the shortfall from additional tier 1
capital before deductions in Schedule RC-R, Part I, item 24, or, if there is not enough
additional tier 1 capital before deductions, from common equity tier 1 capital in
Schedule RC-R, Part I, item 17.
For example, if an institution reports $98 of “Tier 2 capital before deductions” in
Schedule RC-R, Part I, item 44, and must make $110 in tier 2 capital deductions, the
institution would report $110 in this item 45, include the additional $12 in deductions in
Schedule RC-R, Part I, item 24 (and in Schedule RC-R, Part I, item 17, in the case of
insufficient “Additional tier 1 capital before deductions” in Schedule RC-R, Part I, item 23,
from which to make the deduction in Schedule RC-R, Part I, item 24), and report $0 in
item 46, “Tier 2 capital.”
(1) Investments in own tier 2 capital instruments. Report the institution’s investments in
(including any contractual obligation to purchase) its own tier 2 instruments, whether held
directly or indirectly.
An institution may deduct gross long positions net of short positions in the same
underlying instrument only if the short positions involve no counterparty risk.
The institution must look through any holdings of index securities to deduct investments
in its own capital instruments. In addition:
(i) Gross long positions in investments in an institution’s own regulatory capital
instruments resulting from holdings of index securities may be netted against short
positions in the same index;
(ii) Short positions in index securities that are hedging long cash or synthetic positions
can be decomposed to recognize the hedge; and
(iii) The portion of the index that is composed of the same underlying exposure that is
being hedged may be used to offset the long position if both the exposure being
hedged and the short position in the index are covered positions under the market
risk capital rule, and the hedge is deemed effective by the institution’s internal control
processes.
(2) Reciprocal cross-holdings in the capital of financial institutions. Include
investments in the tier 2 capital instruments of other financial institutions that the
institution holds reciprocally, where such reciprocal crossholdings result from a formal or
informal arrangement to swap, exchange, or otherwise intend to hold each other’s capital
instruments.
(3) Investments in the capital of unconsolidated financial institutions that exceed the
25 percent threshold to be deducted from tier 2 capital. Report the total amount of
investments in the capital of unconsolidated financial institutions in the form of tier 2
capital that exceeds the 25 percent threshold.
FFIEC 051
RC-R-29
(12-20)
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FFIEC 051
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Part I. (cont.)
Item No.
Caption and Instructions
45
(cont.)
Calculate this amount as follows:
(1) Determine the amount of investments in the capital of unconsolidated financial
institutions, net of associated DTLs.
(2) If the amount in (1) is greater than 25 percent of Schedule RC-R, Part I, item 12,
report the difference across Schedule RC-R, Part I, item 13, item 24, or item 45,
depending on the tier of capital for which the investments in the capital of
unconsolidated financial institutions qualify. The institution can elect which
investments it must deduct and which it must risk weight. The institution’s election
and the component of capital for which the underlying instrument would qualify will
determine if it will be deducted and reported in Schedule RC-R, Part I, item 13, or be
deducted and reported in Schedule RC-R, Part I, item 24 or item 45.
(3) If the amount in (1) is less than 25 percent of Schedule RC-R, Part I, item 12, no
deduction is needed.
See Schedule RC-R, Part I, item 13, for an example of how to deduct amounts of
investments in the capital of unconsolidated financial institutions that exceed the
25 percent threshold.
(4) Other adjustments and deductions. Include any other applicable adjustments and
deductions applied to tier 2 capital in accordance with the regulatory capital rules of the
primary federal supervisor.
46
Tier 2 capital. Report the greater of Schedule RC-R, Part I, item 44 less item 45, or zero.
Total Capital
47
Total capital. Report the sum of Schedule RC-R, Part I, items 26 and 46.
Total Risk-Weighted Assets
48
Total risk-weighted assets. Report the amount of total risk-weighted assets using the
standardized approach (as reported in Schedule RC-R, Part II, item 31).
Risk-Based Capital Ratios
49
Common equity tier 1 capital ratio. Report the institution’s common equity tier 1 risk-based
capital ratio as a percentage, rounded to four decimal places. Divide Schedule RC-R, Part I,
item 19 by item 48.
50
Tier 1 capital ratio. Report the institution’s tier 1 risk-based capital ratio as a percentage,
rounded to four decimal places. Divide Schedule RC-R, Part I, item 26 by item 48.
51
Total capital ratio. Report the institution’s total risk-based capital ratio as a percentage,
rounded to four decimal places. Divide Schedule RC-R, Part I, item 47 by item 48.
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Part I. (cont.)
Capital Buffer
Item No.
52
Caption and Instructions
Institution-specific capital conservation buffer necessary to avoid limitations on
distributions and discretionary bonus payments. In order to avoid limitations on
distributions, including dividend payments, and certain discretionary bonus payments to
executive officers, an institution must hold a capital conservation buffer above its minimum
risk-based capital requirements.
Report the institution’s capital conservation buffer as a percentage, rounded to four decimal
places. Except as described below, the capital conservation buffer is equal to the lowest of
ratios (1), (2), and (3) below.
For example, the capital conservation buffer to be reported in this item 52 for the June 30,
2020, report date would be based on the capital ratios reported in Schedule RC-R, Part I, of
the Call Report for June 30, 2020.
(1) Schedule RC-R, Part I, item 49, less 4.5000 percent, which is the minimum common
equity tier 1 capital ratio requirement under section 10 of the regulatory capital rules;
(2) Schedule RC-R, Part I, item 50, less 6.0000 percent, which is the minimum tier 1 capital
ratio requirement under section 10 of the regulatory capital rules; and
(3) Schedule RC-R, Part I, item 51, less 8.0000 percent, which is the minimum total capital
ratio requirement under section 10 of the regulatory capital rules.
However, if any of the three ratios calculated above is less than zero (i.e., is negative), the
institution’s capital conservation buffer is zero.
NOTE: Institutions must complete Schedule RC-R, Part I, item 53, only if the amount reported in
Schedule RC-R, Part I, item 52, above, is less than or equal to 2.5000 percent.
Item No.
53
Caption and Instructions
Eligible retained income. Report the amount of eligible retained income as the net income
attributable to the institution for the four calendar quarters preceding the current calendar
quarter, net of any distributions and associated tax effects not already reflected in net
income. (See the instructions for Schedule RC-R, Part I, item 54, for the definition of
“distributions” from section 2 of the regulatory capital rules.)
For example, the amount of eligible retained income to be reported in this item 53 for the
December 31, 2019, report date would be based on the net income attributable to the
institution for the four calendar quarters ending on December 31, 2019. This net income
amount would equal the net income attributable to the institution most recently reported in
Schedule RI, item 14, for December 31, 2019 (i.e., after adjustments for amended
Consolidated Reports of Income).
This net income amount would next be reduced by any distributions and associated tax
effects not already reflected in net income; the resulting amount would be the eligible retained
income to be reported in this item 53. Thus, if the institution had declared dividends on its
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Part I. (cont.)
Item No.
Caption and Instructions
53
(cont.)
common stock during each calendar quarter in 2019 and had no other distributions during
2019, the institution would reduce its net income amount by the total amount of the dividends
declared in 2019 and report the resulting amount as its eligible net income in this item 53.
As an additional example, the amount of eligible retained income to be reported in this
item 53 for the March 31, 2020, report date would be based on the net income attributable to
the institution for the four calendar quarters ending on March 31, 2020. This net income
amount would be calculated by:
(1) Subtracting the net income attributable to the institution most recently reported in
Schedule RI, item 14, for March 31, 2019 (i.e., after adjustments for amended
Consolidated Reports of Income), from the net income attributable to the institution most
recently reported in Schedule RI, item 14, for December 31, 2019 (i.e., after adjustments
for amended Consolidated Reports of Income), and
(2) Adding the result from (1) above to the net income attributable to the institution most
recently reported in Schedule RI, item 14, for March 31, 2020 (i.e., after adjustments for
amended Consolidated Reports of Income).
This net income amount would next be reduced by any distributions and associated tax
effects not already reflected in net income (e.g., dividends declared on the institution’s
common stock between April 1, 2019, and March 31, 2020); the resulting amount would be
the eligible retained income to be reported in this item 53.
NOTE: Institutions must complete Schedule RC-R, Part I, item 54, only if the amount reported in
Schedule RC-R, Part I, item 52, in the Call Report for the previous calendar quarter-end report date
was less than or equal to 2.5000 percent.
Item No.
54
Caption and Instructions
Distributions and discretionary bonus payments during the quarter. An institution must
complete this item only if the amount of its capital conservation buffer, as reported as of the
previous calendar quarter-end report date, was less than its applicable required buffer
percentage on that previous calendar quarter-end report date. For an institution that must
complete this item 54, report the amount of distributions and discretionary bonus payments
during the calendar quarter ending on the report date.
For example, an institution must report the amount of distributions and discretionary bonus
payments made during the calendar quarter ending June 30, 2020, in this item 54 in its June
30, 2020, Call Report only if the amount of its capital conservation buffer as reported in
Schedule RC-R, Part I, item 52, in its March 31, 2020, Call Report was less than or equal to
2.5000 percent.
As defined in section 2 of the regulatory capital rules, “distribution” means:
(1) A reduction of tier 1 capital through the repurchase of a tier 1 capital instrument or by
other means, except when an institution, within the same quarter when the repurchase is
announced, fully replaces a tier 1 capital instrument it has repurchased by issuing
another capital instrument that meets the eligibility criteria for:
(i) A common equity tier 1 capital instrument if the instrument being repurchased was
part of the institution's common equity tier 1 capital, or
(ii) A common equity tier 1 or additional tier 1 capital instrument if the instrument being
repurchased was part of the institution's tier 1 capital;
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Item No.
Caption and Instructions
54
(cont.)
(2) A reduction of tier 2 capital through the repurchase, or redemption prior to maturity, of a
tier 2 capital instrument or by other means, except when an institution, within the same
quarter when the repurchase or redemption is announced, fully replaces a tier 2 capital
instrument it has repurchased by issuing another capital instrument that meets the
eligibility criteria for a tier 1 or tier 2 capital instrument;
(3) A dividend declaration or payment on any tier 1 capital instrument;
(4) A dividend declaration or interest payment on any tier 2 capital instrument if the institution
has full discretion to permanently or temporarily suspend such payments without
triggering an event of default; or
(5) Any similar transaction that the institution’s primary federal regulator determines to be in
substance a distribution of capital.
As defined in section 2 of the regulatory capital rules, “discretionary bonus payment” means a
payment made to an executive officer of an institution, where:
(1) The institution retains discretion as to whether to make, and the amount of, the payment
until the payment is awarded to the executive officer;
(2) The amount paid is determined by the institution without prior promise to, or agreement
with, the executive officer; and
(3) The executive officer has no contractual right, whether express or implied, to the bonus
payment.
As defined in section 2 of the regulatory capital rules, “executive officer” means a person who
holds the title or, without regard to title, salary, or compensation, performs the function of one
or more of the following positions: president, chief executive officer, executive chairman,
chief operating officer, chief financial officer, chief investment officer, chief legal officer, chief
lending officer, chief risk officer, or head of a major business line, and other staff that the
board of directors of the institution deems to have equivalent responsibility.
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Part II. Risk-Weighted Assets
These instructions exclude updates pertaining to the regulatory capital-related interim final rules
(IFRs) issued by the banking agencies from March through June 2020. During the third quarter of
2020, the agencies finalized several of the capital-related IFRs with no changes or only limited
changes. See the separate standalone December 2020 COVID-19 Related Supplemental
Instructions (Call Report) for instructional changes related to these IFRs.
Contents – Part II. Risk-Weighted Assets
Community Bank Leverage Ratio Framework
RC-R-36
General Instructions for Schedule RC-R, Part II
RC-R-36
Exposure Amount Subject to Risk Weighting
RC-R-37
Amounts to Report in Column B
RC-R-38
Treatment of Collateral and Guarantees
RC-R-38a
a. Collateralized Transactions
RC-R-38a
b. Guarantees and Credit Derivatives
RC-R-39
Treatment of Equity Exposures
RC-R-40
Treatment of Sales of 1-4 Family Residential First Mortgage Loans
with Credit-Enhancing Representations and Warranties
RC-R-42
Treatment of Exposures to Sovereign Entities and Foreign Banks
RC-R-42
Summary of Risk Weights for Exposures to Government and
Public Sector Entities
RC-R-43
Risk-Weighted Assets for Securitization Exposures
RC-R-44
a. Exposure Amount Calculation
RC-R-44
b. Simplified Supervisory Formula Approach
RC-R-45
c. Gross-Up Approach
RC-R-47
d. 1,250 Percent Risk Weight Approach
RC-R-49
Banks That Are Subject to the Market Risk Capital Rule
RC-R-50
Adjustments for Financial Subsidiaries
RC-R-51
Treatment of Embedded Derivatives
RC-R-51
Reporting Exposures Hedged with Cleared Eligible Credit Derivatives
RC-R-51
Treatment of Certain Centrally Cleared Derivative Contracts
RC-R-52
Treatment of FDIC Loss-Sharing Agreements
RC-R-52
Allocated Transfer Risk Reserve (ATRR)
RC-R-52
Item Instructions for Schedule RC-R, Part II
RC-R-53
Balance Sheet Asset Categories
RC-R-53
Securitization Exposures: On- and Off-Balance Sheet
RC-R-83
Total Assets
RC-R-89
Derivatives, Off-Balance Sheet Items, and Other Items Subject
To Risk Weighting (Excluding Securitization Exposures)
RC-R-90
Totals
RC-R-109
Memoranda
RC-R-111
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Part II. (cont.)
Community Bank Leverage Ratio Framework
A qualifying community banking organization that decides to opt into the community bank leverage ratio
(CBLR) framework (i.e., has a CBLR framework election in effect as of the quarter-end report date, as
reported in Schedule RC-R, Part I, item 31.a) should not complete Schedule RC-R, Part II. All other
institutions should complete Schedule RC-R, Part II. A qualifying institution can opt out of the community
bank leverage ratio framework by completing Schedule RC-R, Parts I and II, excluding Schedule RC-R,
Part I, items 32 through 38.c. Please refer to the General Instructions for Schedule RC-R, Part I, for
information on the reporting requirements that apply when an institution ceases to have a leverage ratio
greater than 9 percent or fails to meet any of the qualifying criteria and is no longer in the grace period.
General Instructions for Schedule RC-R, Part II.
NOTE: Schedule RC-R, Part II, items 1 through 25, columns A through U, as applicable, are to be completed
semiannually in the June and December reports only. Items 26 through 31 are to be completed quarterly.
The instructions for Schedule RC-R, Part II, items 1 through 22, provide general directions for the
allocation of bank balance sheet assets, credit equivalent amounts of derivatives and off-balance sheet
items, and unsettled transactions to the risk-weight categories in columns C through Q (and, for items 1
through 10 only, to the adjustments to the totals in Schedule RC-R, Part II, column A, to be reported in
column B). In general, the aggregate amount allocated to each risk-weight category is then multiplied by
the risk weight associated with that category. The resulting risk-weighted values from each of the risk
categories are added together, and generally this sum is the bank's total risk-weighted assets, which
comprises the denominator of the risk-based capital ratios.
These instructions should provide sufficient guidance for most banks for risk-weighting their balance sheet
assets and credit equivalent amounts. However, these instructions do not address every type of exposure.
Banks should review the regulatory capital rules of their primary federal supervisory authority for the complete
description of capital requirements.
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
Exposure Amount Subject to Risk Weighting
In general, banks need to risk weight the exposure amount. The exposure amount is defined in §.2 of the
regulatory capital rules as follows:
(1) For the on-balance sheet component of an exposure,1 the bank’s carrying value2 of the exposure.
(2) For a security3 classified as AFS or HTM where the bank has made the AOCI opt-out election in
Schedule RC-R, Part I, item 3.a, the carrying value of the exposure (including net accrued but
uncollected interest and fees)4 less any net unrealized gains on the exposure plus any net unrealized
losses on the exposure included in AOCI.
(3) For the off-balance sheet component of an exposure,5 the notional amount of the off-balance sheet
component multiplied by the appropriate credit conversion factor in §.33 of the regulatory capital
rules.
(4) For an exposure that is an OTC derivative contract, the exposure amount determined under §.34 or
§.132 of the regulatory capital rules.
(5) For an exposure that is a derivative contract that is a cleared transaction, the exposure amount
determined under §.35 or §.133 of the regulatory capital rules.
For derivatives that have matured, but have associated unsettled receivables or payables that are
reported as assets or liabilities, respectively, on the balance sheet as of the quarter-end report date, a
banking organization does not need to report such notional amounts for derivatives that have matured
for purposes of Schedule RC-R, Part II.
1
Not including: (1) an available-for-sale (AFS) or held-to-maturity (HTM) security where the bank has made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R, Part I, item 3.a, (2) an overthe-counter (OTC) derivative contract, (3) a repo-style transaction or an eligible margin loan for which the bank
determines the exposure amount under §.37 of the regulatory capital rules, (4) a cleared transaction, (5) a default
fund contribution, or (6) a securitization exposure.
2
As indicated in the definition in §.2 of the regulatory capital rules, carrying value means, with respect to an asset,
the value of the asset on the balance sheet of the bank determined in accordance with U.S. generally accepted
accounting principles (GAAP). For all assets other than available-for-sale debt securities or purchased creditdeteriorated assets, the carrying value is not reduced by any associated credit loss allowance that is determined in
accordance with U.S. GAAP.
3 Not including: (1) a securitization exposure, (2) an equity exposure, or (3) preferred stock classified as an equity
security under U.S. GAAP.
4
Where the bank has made the AOCI opt-out election, accrued but uncollected interest and fees reported in
Schedule RC, item 11, “Other assets,” associated with AFS or HTM debt securities that are not securitization
exposures should be reported in Schedule RC-R, Part II, item 8, “All other assets.”
5
Not including: (1) an available-for-sale (AFS) or held-to-maturity (HTM) security where the bank has made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R, Part I, item 3.a, (2) an
over-the-counter (OTC) derivative contract, (3) a repo-style transaction or an eligible margin loan for which the bank
determines the exposure amount under §.37 of the regulatory capital rules, (4) a cleared transaction, (5) a default
fund contribution, or (6) a securitization exposure.
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
(6) For an exposure that is an eligible margin loan or repo-style transaction (including a cleared
transaction) for which the bank calculates the exposure amount as provided in §.37, the exposure
amount determined under §.37 of the regulatory capital rules.
(7) For an exposure that is a securitization exposure, the exposure amount determined under §.42 of the
regulatory capital rules.
Amounts to Report in Column B
The amount to report in column B will vary depending upon the nature of the particular item.
For items 1 through 8 and 11 of Schedule RC-R, Part II, column B should include the amount of the
reporting bank's on-balance sheet assets that are deducted or excluded (not risk weighted) in the
determination of risk-weighted assets. Column B should include assets that are deducted from capital
such as goodwill; other intangible assets; gain on sale of securitization exposures; threshold deductions
above the 25 percent individual limits for (1) deferred tax assets (DTAs) arising from temporary
differences that could not be realized through net operating loss carrybacks, (2) mortgage servicing
assets (MSAs), net of associated deferred tax liabilities (DTLs), and (3) investments in the capital of
unconsolidated financial institutions; and any other assets that must be deducted in accordance with the
requirements of a bank's primary federal supervisory authority.
Column B should also include items that are excluded from the calculation of risk-weighted assets, such
as the allowance for loan and lease losses or allowances for credit losses, as applicable; allocated
transfer risk reserves; and certain on-balance sheet asset amounts associated with derivative contracts
that are included in the calculation of the credit equivalent amounts of the derivative contracts. In
addition, for items 1 through 8 and 11 of Schedule RC-R, Part II, column B should include any difference
between the balance sheet amount of an on-balance sheet asset and its exposure amount as described
above under “Exposure Amount Subject to Risk Weighting.” Note: For items 1 through 8 and 11 of
Schedule RC-R, Part II, the sum of columns B through R must equal the balance sheet asset amount
reported in column A.
For items 9.a through 9.d of Schedule RC-R, Part II, the amount a reporting bank should report in
column B will depend upon the risk-weighting approach it uses to risk weight its securitization exposures
and whether the bank has made the AOCI opt-out election in Schedule RC-R, Part I, item 3.a. For each
of items 9.a through 9.d, a mathematical relationship similar to the one described above will hold true,
such that the sum of columns B through Q must equal the balance sheet asset amount reported in
column A.
•
If a bank uses the 1,250 percent risk weight approach to risk weight an on-balance sheet
securitization exposure, the bank will report in column B the difference between the carrying value of
the exposure and the exposure amount that is to be risk weighted. For example, if a bank has a
securitization exposure that is an AFS debt security with a $105 carrying value (i.e., fair value)
including a $5 unrealized gain (in other words, a $100 amortized cost), the bank would report the
following:
o
o
If the bank has not made (or cannot make) the AOCI opt-out election, the bank would report zero
in item 9.b, column B. The bank would report the $105 exposure amount to be risk weighted in
item 9.b, column Q–1250% risk weight.
If the bank has made the AOCI opt-out election, the bank would report any unrealized gain as a
positive number in item 9.b, column B, and any unrealized loss as a negative number in item 9.b,
column B. Therefore, in this example, the bank would report $5 in item 9.b, column B. Because
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
the bank reverses out the unrealized gain for regulatory capital purposes because it has made
the AOCI opt-out election, it does not have to risk weight the gain. (Note: The bank also would
report the $100 exposure amount to be risk weighted in item 9.b, column Q–1250% risk weight.)
•
If the bank uses the Simplified Supervisory Formula Approach (SSFA) or the Gross-Up Approach to
risk weight an on-balance sheet securitization exposure, the bank will report in column B the same
amount that it reported in column A.
For item 10 of Schedule RC-R, Part II, the amount a reporting bank should report in column B also will
depend upon the risk-weighting approach it uses to risk weight its securitization exposures. If a bank
uses the 1,250 percent risk weight approach to risk weight an off-balance sheet securitization exposure,
the bank will report in column B any difference between the notional amount of the off-balance sheet
securitization exposure that is reported in column A and its exposure amount. If the bank uses the SSFA
or the Gross-Up Approach to risk weight an off-balance sheet securitization exposure, the bank will report
in column B the same amount that it reported in column A. An example is presented in the instructions
for Schedule RC-R, Part II, item 10. For item 10 of Schedule RC-R, Part II, the sum of columns B through
Q must equal the amount of the off-balance sheet securitization exposures reported in column A.
For items 12 through 21 of Schedule RC-R, Part II, column B should include the credit equivalent
amounts of the reporting bank's derivative contracts and off-balance sheet items that are covered by the
regulatory capital rules. For the off-balance sheet items in items 12 through 19, the credit equivalent
amount to be reported in column B is calculated by multiplying the face, notional, or other amount
reported in column A by the appropriate credit conversion factor. The credit equivalent amounts in
column B are to be allocated to the appropriate risk-weight categories in columns C through J (or to the
securitization exposure collateral category in column R, if applicable). For items 12 through 21 of
Schedule RC-R, Part II, the sum of columns C through J (plus column R, if applicable) must equal the
credit equivalent amount reported in column B.
Treatment of Collateral and Guarantees
a. Collateralized Transactions
The rules for recognition of collateral are in §.37 and pertinent definitions in §.2 of the regulatory capital
rules. The regulatory capital rules define qualifying financial collateral as cash on deposit, gold bullion,
investment grade long- and short-term debt exposures (that are not resecuritization exposures), publicly
traded equity securities and convertible bonds, and money market fund or other mutual fund shares with
prices that are publicly quoted on a daily basis.
Banks may apply one of two approaches, as outlined in §.37, to recognize the risk-mitigating effects of
qualifying financial collateral:
(1) Simple Approach: Can be used for any type of exposure. Under this approach, banks may apply a
risk weight to the portion of an exposure that is secured by the fair value of the financial collateral
based on the risk weight assigned to the collateral under §.32. However, under this approach, the
risk weight assigned to the collateralized portion of the exposure may not be less than 20 percent,
unless one of the following exceptions applies:
•
Zero percent risk weight: May be assigned to an exposure to an over-the-counter (OTC)
derivative contract that is marked-to-market on a daily basis and subject to a daily margin
requirement, to the extent that the contract is collateralized to cash on deposit; to the portion of
an exposure collateralized by cash on deposit; to the portion of an exposure collateralized by an
exposure to a sovereign that qualifies for the zero percent risk weight under §.32 and the bank
has discounted the fair value of the collateral by 20 percent.
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General Instructions for Schedule RC-R, Part II. (cont.)
•
10 percent risk weight: May be assigned to an exposure to an OTC derivative contract that is
marked-to-market on a daily basis and subject to a daily margin requirement, to the extent that
the contract is collateralized by an exposure to a sovereign that qualified for a zero percent risk
weight under §.32.
(2) Collateral Haircut Approach: can be used only for repo-style transactions, eligible margin loans,
collateralized derivative transactions, and single-product netting sets of such transactions. Under this
approach, banks would apply either standard supervisory haircuts or own internal estimates for
haircuts to the value of the collateral. See §.37(c) of the regulatory capital rules for a description of
the calculation of the exposure amount, standard supervisory market price volatility haircuts, and
requirements for using own internal estimates for haircuts.
Banks may use any approach described in §.37 that is valid for a particular type of exposure or
transaction; however, they must use the same approach for similar transactions or exposures.
If an exposure is partially secured, that is, the market value (or in cases of using the Collateral Haircut
Approach, the adjusted market value) of the financial collateral is less than the face amount of an asset or
off-balance sheet exposure, only the portion that is covered by the market value of the collateral is to be
reported in the risk-weight category item appropriate to the type of collateral. The uncovered portion of
the exposure continues to be assigned to the initial risk-weight category item appropriate to the exposure.
The face amount of an exposure secured by multiple types of qualifying collateral is to be reported in the
risk-weight category items appropriate to the collateral types, apportioned according to the market value
of the types of collateral.
Exposures collateralized by deposits at the reporting institution
The portion of any exposure collateralized by deposits at the reporting institution would be eligible for a
zero percent risk weight. The remaining portion of the exposure that is not collateralized by deposits
should be risk-weighted according to the regulatory capital rules.
b. Guarantees and Credit Derivatives
The rules for recognition of guarantees and credit derivatives are in §.36 and pertinent definitions are in
§.2 of the regulatory capital rules. A bank may recognize the credit risk mitigation benefits of an eligible
guarantee or eligible credit derivative by substituting the risk weight associated with the protection
provider for the risk weight assigned to the exposure. Please refer to the definitions of eligible guarantee,
eligible guarantor, and eligible credit derivative in §.2 of the regulatory capital rules. Note that in the
definition of eligible guarantee, where the definition discusses contingent guarantees, only contingent
guarantees of the U.S. government or its agencies are recognized.
The coverage amount provided by an eligible guarantee or eligible credit derivative will need to be
adjusted downward if:
•
The residual maturity of the credit risk mitigant is less than that of the hedged exposure (maturity
mismatch adjustment), see §.36(c);
•
The credit risk mitigant does not include as a credit event a restructuring of the hedged exposure
involving forgiveness or postponement of principal, interest, or fees that results in a credit loss
event (that is, a charge-off, specific provision, or other similar debit to the profit and loss account),
see §.36(d); or
•
The credit risk mitigant is denominated in a currency different from that in which the hedged
exposure is denominated (currency mismatch adjustment, see §.36(e).
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
For further information on credit derivatives, refer to the instructions for Schedule RC-L, item 7, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Exposures covered by Federal Deposit Insurance Corporation (FDIC) loss-sharing agreements
The portion of any exposure covered by an FDIC loss-sharing agreement would be eligible for a
20 percent risk weight. The remaining uncovered portion of the exposure should be risk weighted
according to the regulatory capital rules.
Treatment of Equity Exposures
The treatment of equity exposures is outlined in §.51 through §.53 of the regulatory capital rules. Banks
must use different methodologies to determine risk-weighted assets for their equity exposures:
•
•
The Simple Risk Weight Approach, which must be used for all types of equity exposures that are
not equity exposures to a mutual fund or other investment fund, and
Full look-through, simple modified look-through, and alternative modified look-through
approaches for equity exposures to mutual funds and other investment funds.
Treatment of stable value protection
The regulatory capital rules define stable value protection (SVP) in §.51(a)(3).
A bank that purchases SVP on an investment in a separate account must treat the portion of the carrying
value of the investment attributable to the SVP as an exposure to the provider of the protection. The
remaining portion of the carrying value of the investment must be treated as an equity exposure to an
investment fund.
A bank that provides SVP must treat the exposure as an equity derivative with an adjusted carrying value
equal to the sum of the on-balance and off-balance sheet adjusted carrying value.
Adjusted carrying value
The adjusted carrying value of an equity exposure is equal to:
•
•
On-balance sheet equity exposure: The carrying value of the exposure.
Off-balance sheet portion of an equity exposure (that is not an equity commitment):
The effective notional principal amount1 of the exposure minus the adjusted carrying value of the
on-balance sheet component of the exposure.
For an equity commitment (a commitment to purchase an equity exposure), the effective notional principal
amount must be multiplied by the following credit conversion factors: 20 percent for conditional equity
commitments with an original maturity of one year or less, 50 percent for conditional equity commitments
with an original maturity of more than one year, and 100 percent for unconditional equity commitments.
Equity exposure risk weighting methodologies
(1) Simple Risk Weight Approach: Must be used for all types of equity exposures that are not equity
exposures to a mutual fund or other investment fund. Under this approach, banks must determine
the risk weighted asset amount of an individual equity exposure by multiplying (1) the adjusted
1
The regulatory capital rules define the “effective notional principal amount” as an exposure of equivalent size to a
hypothetical on-balance sheet position in the underlying equity instrument that would evidence the same change in
fair value (measured in dollars) given a small change in the price of the underlying equity instrument.
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
carrying value of the exposure or (2) the effective portion and ineffective portion of a hedge pair by
the lowest possible risk weight below:
•
Zero percent risk weight: An equity exposure to a sovereign, Bank for International
Settlements, the European Central Bank, the European Commission, the International
Monetary Fund, the European Stability Mechanism, the European Financial Stability Facility,
a multilateral development bank (MDB), and any other entity whose credit exposures receive
a zero percent risk weight under §.32 of the regulatory capital rules.
•
20 percent risk weight: An equity exposure to a public sector entity, Federal Home Loan
Bank, and the Federal Agricultural Mortgage Corporation (Farmer Mac).
•
100 percent risk weight: Equity exposures to:
o Certain qualified community development investments,
o The effective portion of hedge pairs, and
o Equity exposures, to the extent that the aggregate carrying value of the exposures does
not exceed 10 percent of total capital. To utilize this risk weight, the bank must
aggregate the following equity exposures: unconsolidated small business investment
companies or held through consolidated small business investment companies; publicly
traded (including those held indirectly through mutual funds or other investment funds);
and non-publicly traded (including those held indirectly through mutual funds or other
investment funds).
•
300 percent risk weight: Publicly traded equity exposures.
•
400 percent risk weight: Equity exposures that are not publicly traded.
•
600 percent risk weight: An equity exposure to an investment firm, provided that the
investment firm would (1) meet the definition of traditional securitization in §.2 of the
regulatory capital rules were it not for the application of paragraph (8) of the definition and
(2) has greater than immaterial leverage.
(2) Full look-through approach: Used only for equity exposures to a mutual fund or other investment
fund. Requires a minimum risk weight of 20 percent. Under this approach, banks calculate the
aggregate risk-weighted asset amounts of the carrying value of the exposures held by the fund as if
they were held directly by the bank multiplied by the bank’s proportional ownership share of the fund.
(3) Simple modified look-through approach: Used only for equity exposures to a mutual fund or other
investment fund. Requires a minimum risk weight of 20 percent. Under this approach, risk-weighted
assets for an equity exposure is equal to the exposure’s adjusted carrying value multiplied by the
highest risk weight that applies to any exposure the fund is permitted to hold under the prospectus,
partnership agreement, or similar agreement that defines the funds permissible investments.
(4) Alternative modified look-through approach: Used only for equity exposures to a mutual fund or other
investment fund. Requires a minimum risk weight of 20 percent. Under this approach, banks may
assign the adjusted carrying value on a pro rata basis to different risk-weight categories based on the
limits in the fund’s prospectus, partnership agreement, or similar contract that defines the fund’s
permissible investments.
FFIEC 051
RC-R-41
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
Treatment of Sales of 1-4 Family Residential First Mortgage Loans with Credit-Enhancing
Representations and Warranties
When a bank transfers mortgage loans with credit-enhancing representations and warranties in a
transaction that qualifies for sale accounting under GAAP, the bank will need to report and risk weight
those exposures. The definition of credit-enhancing representations and warranties (CERWs) is found in
§.2 of the regulatory capital rules. Many CERWs should be treated as securitization exposures for
purposes of risk weighting. However, those CERWs that do not qualify as securitization exposures
receive a 100 percent credit conversion factor as indicated in §.33 of the regulatory capital rules. For
example, if the bank has agreed to repurchase the loans that it has sold, it will generally need to risk
weight those loans in Schedule RC-R, Part II, item 17, until the warranties expire. Note that CERWs do
not include certain early default clauses and similar warranties that permit the return of, or premium
refund clauses covering, 1-4 family residential mortgage loans that qualify for a 50 percent risk weight
provided the warranty period does not exceed 120 days from the date of transfer.
Example: A bank sells $100 in qualifying 1-4 family residential first mortgage loans and agrees to
repurchase them in case of early default for up to 180 days. This warranty exceeds the 120-day
limit, and therefore the full $100 should be reported in Schedule RC-R, Part II, item 17, until the
warranty expires.
If the bank has made a CERW that is limited or capped (e.g., a warranty to cover first losses on loans up
to a set amount that is less than the full loan amount), such warranties are regarded as securitization
exposures under the regulatory capital rules as they represent a transaction that has been separated into
at least two tranches reflecting different levels of seniority for credit risk. (Refer to the definitions of
securitization exposure, synthetic securitization, traditional securitization, and tranche in §.2 of the
regulatory capital rules). The bank will need to report and risk weight these warranties in Schedule RC-R,
Part II, item 10, as off-balance sheet securitization exposures.
Example: A bank sells $100 in qualifying 1-4 family residential first mortgage loans and agrees to
compensate the buyer for losses up to $2 if the loans default during the first 12 months. Twelve
months exceeds the 120-day limit and therefore the agreement is a CERW. The CERW is also a
securitization exposure because the $2 is effectively a first loss tranche on a $100 transaction.
For purposes of reporting this transaction in Schedule RC-R, Part II, item 10, the bank should
report $100 in column A, an adjustment of $98 in column B, and then $2 in column Q as an
exposure amount that is risk weighted by applying a 1,250 percent risk weight (if the bank does
not use the Simplified Supervisory Formula Approach (SSFA) or the Gross-Up Approach for
purposes of risk weighting its securitization exposures). The bank will not need to report any
amount in columns T or U of Schedule RC-R, Part II, item 10, unless it uses the SSFA or GrossUp approach for calculating the risk-weighted asset amount for this transaction.
If the bank uses either the SSFA or Gross-Up Approach to risk weight the $2 exposure, the bank
should report $100 in both column A and column B. In column T or U, it would report the riskweighted asset amount calculated by using the SSFA or Gross-Up Approach, respectively.
Treatment of Exposures to Sovereign Entities and Foreign Banks
These instructions contain several references to Country Risk Classifications (CRC) used by the
Organization for Economic Cooperation and Development (OECD). The CRC methodology classifies
countries into one of eight risk categories (0-7), with countries assigned to the zero category having the
lowest possible risk assessment and countries assigned to the 7 category having the highest possible risk
assessment. The OECD regularly updates CRCs for more than 150 countries and makes the
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General Instructions for Schedule RC-R, Part II. (cont.)
assessments publicly available on its website.1 The OECD does not assign a CRC to every country;
for example, it does not assign a CRC to a number of major economies; it also does not assign a CRC to
many smaller countries. As such, the table below also provides risk weights for countries with no CRC
based on whether or not those particular countries are members of the OECD. In addition, there is a
higher risk weight of 150 percent for any country that has defaulted on its sovereign debt within the past
5 years, regardless of the CRC rating.
For information on the risk weights to be assigned to reported balance sheet items (items 1 through 8)
and off-balance sheet items and other exposures (items 12 through 22) that are exposures to foreign
central governments (including foreign central banks), foreign banks, and foreign public sector entities,
see the discussion on the Treatment of Exposures to Sovereign Entities and Foreign Banks in the
General Instructions for Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
Summary of Risk Weights for Exposures to Government and Public Sector Entities
The following are some of the most common exposures to government and public sector entities and the
risk weights that apply to them:
Column C – 0% risk weight:
• All exposures (defined broadly to include securities, loans, and leases) that are direct exposures
to, or the portion of exposures that are directly and unconditionally guaranteed by, the U.S.
Government or U.S. Government agencies. This includes the portions of deposits insured by the
FDIC or the National Credit Union Administration (NCUA).
• Exposures that are collateralized by cash on deposit in the reporting bank.
• Exposures that are collateralized by securities issued or guaranteed by the U.S. Government, or
other sovereign governments that qualify for the zero percent risk weight. Collateral value must be
adjusted under §.37 of the regulatory capital rules.
• Exposures to, and the portions of exposures guaranteed by, the Bank for International
Settlements, the European Central Bank, the European Commission, the International Monetary
Fund, the European Stability Mechanism, the European Financial Stability Facility, or a
multilateral development bank (as specifically defined in §.2 of the regulatory capital rules).
Column G – 20% risk weight:
• The portion of exposures that are conditionally guaranteed by the U.S. Government or U.S.
Government agencies. This includes exposures, or the portions of exposures, conditionally
guaranteed by the FDIC or the NCUA.
• The portion of exposures that are collateralized by cash on deposit in the bank or by securities
issued or guaranteed by the U.S. Government or U.S. Government agencies that are not included
in zero percent column.
• General obligation exposures to states, municipalities, and other political subdivisions of the
United States.
• Exposures to U.S. government-sponsored entities (GSEs) other than equity exposures or
preferred stock, and risk-sharing securities.
Column H – 50% risk weight:
• Revenue obligation exposures to states, municipalities, and other political subdivisions of the
United States.
Column I – 100% risk weight:
• Preferred stock of U.S. GSEs.
1
See http://www.oecd.org/trade/xcred/crc.htm.
FFIEC 051
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
Risk-Weighted Assets for Securitization Exposures
Under the agencies’ regulatory capital rules, three separate approaches are available for setting the
regulatory capital requirements for securitization exposures, as defined in §.2 of the regulatory capital
rules. Securitization exposures include asset-backed and mortgage-backed securities, other positions in
securitization transactions, re-securitizations, and structured finance programs1 (except credit-enhancing
interest-only (CEIO) strips). Include as a securitization exposure for risk-weighted asset purposes any
amount reported in Schedule RC, item 11, “Other assets,” for accrued interest receivable on an onbalance sheet securitization exposure. In general, under each of the three approaches, the risk-based
capital requirement for a position in a securitization or structured finance program (hereafter referred to
collectively as a securitization) is computed by multiplying the calculated amount of the position (including
any accrued interest receivable on the position) by the appropriate risk weight. The three approaches to
determining the proper risk weight for a securitization exposure are the Simplified Supervisory Formula
Approach (SSFA), the Gross-Up Approach, or the 1,250 Percent Risk Weight Approach.
If a securitization exposure is not an after-tax gain-on-sale resulting from a securitization that requires
deduction, or the portion of a CEIO strip that does not constitute an after-tax gain-on-sale,2 a bank may
assign a risk weight to the securitization exposure using the SSFA if certain requirements are met. If a
bank is not subject to Subpart F (the market risk capital rule) of the regulatory capital rules, it may instead
choose to assign a risk weight to the securitization exposure using the Gross-Up Approach if certain
requirements are met. However, the bank must apply either the SSFA or the Gross-Up Approach
consistently across all of its securitization exposures. However, if the bank cannot, or chooses not to,
apply the SSFA or the Gross-Up Approach to an individual securitization exposure, the bank must assign
a 1,250 percent risk weight to that exposure.
Both traditional and synthetic securitizations must meet certain operational requirements before applying
either the SSFA or the Gross-Up Approach. Furthermore, banks must complete certain due diligence
requirements and satisfactorily demonstrate a comprehensive understanding of the features of the
securitization exposure that would materially affect the performance of the exposure. If these due
diligence requirements are not met, the bank must assign the securitization exposure a risk weight of
1,250 percent. The bank’s analysis must be commensurate with the complexity of the securitization
exposure and the materiality of the exposure in relation to its capital. Banks should refer to §.41 of the
regulatory capital rules to review the details of these operational and due diligence requirements.
For example, a bank not subject to the market risk capital rule has 12 securitization exposures. The
operational and due diligence requirements have been met for 10 of the exposures, to which the bank
applies the Gross-Up Approach. The bank then assigns a 1,250 percent risk weight to the other two
exposures. Alternatively, the bank could assign a 1,250 percent risk weight to all 12 securitization
exposures.
a. Exposure Amount Calculation
The exposure amount of an on-balance sheet securitization exposure that is not an available-for-sale or
held-to-maturity security where the bank has made the AOCI opt-out election in Schedule RC-R, Part I,
item 3.a, a repo-style transaction, an eligible margin loan, an over-the-counter (OTC) derivative contract,
or a cleared transaction is equal to the carrying value of the exposure (including any accrued interest
receivable on the exposure reported in Schedule RC, item 11, “Other assets”).
1
Structured finance programs include, but are not limited to, collateralized debt obligations.
2
Consistent with the regulatory capital rules, a bank must deduct from common equity tier 1 capital any after-tax
gain-on-sale resulting from a securitization and must apply a 1,250 percent risk weight to the portion of a CEIO strip
that does not constitute an after-tax gain-on-sale.
FFIEC 051
RC-R-44
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
The exposure amount of an on-balance sheet securitization exposure that is an available-for-sale or heldto-maturity security where the bank has made the AOCI opt-out election in Schedule RC-R, Part I,
item 3.a, is equal to the carrying value of the exposure (including any accrued interest receivable on the
exposure reported in Schedule RC, item 11), less any net unrealized gains on the exposure and plus any
net unrealized losses on the exposure.
The exposure amount of an off-balance sheet securitization exposure that is not a repo-style transaction,
an eligible margin loan, a cleared transaction (other than a credit derivative), an OTC derivative contract
(other than a credit derivative), or an exposure to an asset-backed commercial paper (ABCP) program is
the notional amount of the exposure.
For an off-balance sheet securitization exposure to an ABCP program, such as an eligible ABCP liquidity
facility, the notional amount may be reduced to the maximum potential amount that the bank could be
required to fund given the ABCP program’s current underlying assets (calculated without regard to the
current credit quality of those assets). An exposure amount of an eligible ABCP liquidity facility for which
the SSFA does not apply is calculated by multiplying the notional amount of the exposure by a credit
conversion factor (CCF) of 50 percent. An exposure amount of an eligible ABCP liquidity facility for which
the SSFA does apply is calculated by multiplying the notional amount of the exposure by a CCF of
100 percent.
The exposure amount of a securitization exposure that is a repo-style transaction, eligible margin loan, or
derivative contract (other than a credit derivative) is the exposure amount of the transaction as calculated
using the instructions for calculating the exposure amount of OTC derivatives or collateralized
transactions outlined in §.34, §.132, or §.37 of the regulatory capital rules.
If a bank has multiple securitization exposures that provide duplicative coverage to the underlying
exposures of a securitization, the bank is not required to hold duplicative risk-based capital against the
overlapping position. Instead, the bank may apply to the overlapping position the applicable risk-based
capital treatment that results in the highest risk-based capital requirement.
If a bank provides support to a securitization in excess of the bank’s contractual obligation to provide
credit support to the securitization (implicit support) it must include in risk-weighted assets all of the
underlying exposures associated with the securitization as if the exposures had not been securitized and
must deduct from common equity tier 1 capital any after-tax gain-on-sale resulting from the securitization.
b. Simplified Supervisory Formula Approach
To use the SSFA to determine the risk weight for a securitization exposure, a bank must have data that
enables it to accurately assign the parameters. The data used to assign the parameters must be the
most currently available data and no more than 91 calendar days old. A bank that does not have the
appropriate data to assign the parameters must assign a risk weight of 1,250 percent to the exposure.
See the operational requirements outlined in §.43 of the regulatory capital rules for further instructions.
To calculate the risk weight for a securitization exposure using the SSFA, a bank must have accurate
information on the following five inputs to the SSFA calculation:
•
Parameter KG is the weighted-average total capital requirement for all underlying exposures
calculated using the standardized approach (with unpaid principal used as the weight for each
exposure). Parameter KG is expressed as a decimal value between zero and one (e.g., an
average risk weight of 100 percent represents a value of KG equal to .08). “Underlying
exposures” is defined in the regulatory capital rules to mean one or more exposures that have
been securitized in a securitization transaction. In this regard, underlying exposures means all
exposures, including performing and nonperforming exposures. Thus, for example, for a pool of
FFIEC 051
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
underlying corporate exposures that have been securitized, where 95 percent of the pool is
performing (and qualify for a risk weight of 100 percent) and 5 percent of the pool is past due
exposures that are not guaranteed and are unsecured (and thus are assigned a risk weight of
150 percent), the weighted risk weight for the pool would be 102.5 percent [102.5% = (95% *
100%) + (5% * 150%)] and the total capital requirement KG would be equal to 0.082 (102.5%
divided by 1,250%). This treatment is consistent with the regulatory capital rules.
•
Parameter W is the ratio of the sum of the dollar amounts of any underlying exposures within the
securitized pool to the ending balance, measured in dollars, of underlying exposures, that meet
any of the following criteria: (1) 90 days or more past due; (2) subject to a bankruptcy or
insolvency proceeding; (3) in the process of foreclosure; (4) held as real estate owned; (5) has
contractually deferred interest payments for 90 days or more (other than in the case of
deferments on federally guaranteed student loans and certain consumer loans deferred according
to provisions in the contract); or (6) is in default. Parameter W is expressed as a decimal value
between zero and one.
As a result, past due exposures that also meet one or more of the criteria in parameter W are to
be factored into the measure of both parameters KG and W for purposes of calculating the
regulatory capital requirement for securitization exposures using the SSFA.
•
Parameter A is the attachment point for the exposure, which represents the threshold at which
credit losses will first be allocated to the exposure. Parameter A equals the ratio of the current
dollar amount of underlying exposures that are subordinated to the exposure of the bank to the
current dollar amount of underlying exposures. Any reserve account funded by the accumulated
cash flows from the underlying exposures that is subordinated to the bank’s securitization
exposure may be included in the calculation of parameter A to the extent that cash is present in
the account. Parameter A is expressed as a decimal value between zero and one.
•
Parameter D is the detachment point for the exposure, which represents the threshold at which
credit losses of principal allocated to the exposure would result in a total loss of principal.
Parameter D equals parameter A plus the ratio of the current dollar amount of the securitization
exposures that are pari passu with the exposure (that is, have equal seniority with respect to
credit risk) to the current dollar amount of the underlying exposures. Parameter D is expressed
as a decimal value between zero and one.
•
A supervisory calibration parameter, p, is equal to 0.5 for securitization exposures that are not
resecuritization exposures and equal to 1.5 for resecuritization exposures.
There are three steps to calculating the risk weight for a securitization using the SSFA. First, a bank must
complete the following equations using the previously described parameters:
𝐾𝐾𝐴𝐴 = (1 − 𝑊𝑊 ) ∙ 𝐾𝐾𝐺𝐺 + ( 0.5 ∙ 𝑊𝑊)
1
𝑎𝑎 = −
𝑝𝑝 ∙ 𝐾𝐾𝐴𝐴
𝑢𝑢 = 𝐷𝐷 − 𝐾𝐾𝐴𝐴
𝑙𝑙 = max(𝐴𝐴 − 𝐾𝐾𝐴𝐴 , 0)
𝑒𝑒 = 2.71828, the base of the natural logarithms
Second, using the variables calculated in first step, find the value of KSSFA using the formula below:
𝐾𝐾𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 =
𝑒𝑒 𝑎𝑎∙𝑢𝑢 − 𝑒𝑒 𝑎𝑎∙𝑙𝑙
𝑎𝑎(𝑢𝑢 − 𝑙𝑙)
FFIEC 051
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
Third, the risk weight of any particular securitization exposure (expressed as a percent) will depend on
the tranche’s attachment point and detachment point relative to KA.
Case 1: If the detachment point, parameter D, is less than or equal to KA, the exposure is
assigned a risk weight of 1,250 percent.
Case 2: If the attachment point, parameter A, is less than KA and the detachment point,
parameter D, is greater than KA, the risk weight is a weighted average of 1,250 percent and
1,250 percent times KSSFA, calculated as shown below:
𝑹𝑹𝑹𝑹 = ��
𝑲𝑲𝑨𝑨 − 𝑨𝑨
𝑫𝑫 − 𝑲𝑲𝑨𝑨
� × 𝟏𝟏, 𝟐𝟐𝟐𝟐𝟐𝟐 𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑� + ��
� × 𝟏𝟏, 𝟐𝟐𝟐𝟐𝟐𝟐 𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑 × 𝑲𝑲𝑺𝑺𝑺𝑺𝑺𝑺𝑺𝑺 �
𝑫𝑫 − 𝑨𝑨
𝑫𝑫 − 𝑨𝑨
Case 3: If the attachment point, parameter A, is greater than or equal to KA, the risk weight is the
product of KSSFA and 1,250 percent, as shown in the following equation:
𝑹𝑹𝑹𝑹 = 𝟏𝟏, 𝟐𝟐𝟐𝟐𝟐𝟐 𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑 × 𝑲𝑲𝑺𝑺𝑺𝑺𝑺𝑺𝑺𝑺
To determine the risk-based capital requirement under the SSFA, multiply the exposure amount
(including any accrued interest receivable on the exposure) by the higher of either (1) the calculated risk
weight or (2) a 20 percent risk weight.
For purposes of reporting in Schedule RC-R, Part II, items 9 and 10, a bank would report in column T the
risk-weighted asset amount calculated under the SSFA for its securitization exposures.
c. Gross-Up Approach
A bank that is not subject to the market risk capital rule (Subpart F) in the regulatory capital rules may
apply the Gross-Up Approach instead of the SSFA to determine the risk weight of its securitization
exposures, provided that it applies the Gross-Up Approach consistently to all of its securitization
exposures.
To calculate the risk weight for a securitization exposure using the Gross-Up Approach, a bank must
calculate the following four inputs:
(1) Pro rata share, which is the par value of the bank’s securitization exposure as a percent of the par
value of the tranche in which the securitization exposure resides.
(2) Enhanced amount, which is the par value of the tranches that are more senior to the tranche in which
the bank’s securitization resides.
(3) Exposure amount of the bank’s securitization exposure (including any accrued interest receivable on
the exposure).
(4) Risk weight, which is the weighted-average risk weight of underlying exposures in the securitization
pool.
The bank would calculate the credit equivalent amount which is equal to the sum of the exposure
amount of the bank’s securitization exposure (3) and the pro rata share (1) multiplied by the enhanced
amount (2).
A bank must assign the higher of the weighted-average risk weight (4) or a 20 percent risk weight to the
securitization exposure using the Gross-Up Approach.
FFIEC 051
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FFIEC 051
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
To determine the risk-based capital requirement under the gross-up approach, multiply the higher of the
two risk weights by the credit equivalent amount. These steps are outlined in the worksheet below:
Gross-Up Approach Worksheet to Calculate the Capital Charge for a Securitization
Exposure that is Not a Senior Exposure1
(a) Currently outstanding par value of the bank’s non-senior
securitization exposure divided by the currently outstanding
par value of the entire tranche (e.g., 60%2)
(b) Currently outstanding par value of the more senior positions in
the securitization that are supported by the tranche in which the
bank owns a non-senior securitization exposure
(c) Pro rata share of the more senior positions currently outstanding
in the securitization that are supported by the bank’s
non-senior securitization exposure: enter (b) multiplied by (a)
(d) Exposure amount of the bank’s non-senior securitization exposure
(e) Enter the sum of (c) and (d)
(f) Enter the weighted-average risk weight applicable to
the assets underlying the securitization
(g) Risk-weighted asset amount of the bank’s non-senior
securitization exposure: enter the higher of:
• (d) multiplied by 20%, or
• (e) multiplied by (f)
(h) Capital charge for the risk-weighted asset amount of the bank’s
non-senior securitization exposure: enter (g) multiplied by 8%
For purposes of reporting its non-senior securitization exposures in Schedule RC-R, Part II, items 9
and 10, a bank would report in column U the risk-weighted asset amount calculated in line (g) on the
Gross-Up Approach worksheet. For a senior securitization exposure, a bank would report in column U
the exposure amount of its exposure multiplied by the weighted-average risk weight of the securitization’s
underlying exposures, subject to a 20 percent risk-weight floor.
Reporting in Schedule RC-R, Part II, When Using the Gross-Up Approach:
If the bank’s non-senior security is an HTM securitization exposure, the amortized cost of this security is
included on the Report of Condition balance sheet in Schedule RC, item 2.a, “Held-to-maturity securities,”
and on the regulatory capital schedule in columns A and B of Schedule RC-R, Part II, item 9.a,
“On-balance sheet securitization exposures – Held-to-maturity securities.” The risk-weighted asset
amount from line (g) in the Gross-Up Approach Worksheet above is reported in column U of
Schedule RC-R, Part II, item 9.a.
If the bank’s security is an AFS securitization exposure, the fair value of this security is included on the
Report of Condition balance sheet in Schedule RC, item 2.b, “Available-for-sale securities,” and on the
regulatory capital schedule in column A of Schedule RC-R, Part II, item 9.b, “On-balance sheet
securitization exposures – Available-for-sale securities.” For further information on the reporting of
1
A senior securitization exposure means a securitization exposure that has a first priority claim on the cash flows
from the underlying exposures, without considering amounts due under interest rate or currency contracts, fees or
other similar payments due. Time tranching (that is, maturity differences) also is not considered when determining
whether a securitization exposure is a senior securitization exposure.
2
For example, if the currently outstanding par value of the entire tranche is $100 and the currently outstanding par
value of the bank’s subordinated security is $60, then the bank would enter 60% in (a).
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General Instructions for Schedule RC-R, Part II. (cont.)
AFS securitization exposures in column B, refer to the instructions for Schedule RC-R, Part II, item 9.b,
because the amount reported in column B depends on whether the bank has made the AOCI opt-out
election in Schedule RC-R, Part I, item 3.a. For non-senior AFS securitization exposures, the riskweighted asset amount from line (g) in the Gross-Up Approach Worksheet above is reported in column U
of Schedule RC-R, Part II, item 9.b.
If the bank’s non-senior security is a trading securitization exposure, the fair value of this security is
included on the Report of Condition balance sheet in Schedule RC, item 5, “Trading assets,” and on the
regulatory capital schedule in column A of Schedule RC-R, Part II, item 9.c, “On-balance sheet
securitization exposures – Trading assets.” A trading security is risk-weighted using its fair value if the
bank is not subject to the market risk capital rule. The risk-weighted asset amount from line (g) in the
Gross-Up Approach Worksheet above is reported in column U of Schedule RC-R, Part II, item 9.c.
d. 1,250 Percent Risk Weight Approach
If the bank cannot, or chooses not to, apply the SSFA or the Gross-Up Approach to the securitization
exposure, the bank must assign a 1,250 percent risk weight to the exposure (including any accrued
interest receivable on the exposure).
Securitization exposure reporting in Schedule RC-R, Part II
Securitization exposure reporting depends on the methodology the bank will use to risk weight the
exposure.
For example, if a bank plans to apply the 1,250 percent risk weight to its securitization exposures, the
amount reported in column Q should match the amount reported in column A (plus or minus any
adjustments reported in column B, such as that for an allocated transfer risk reserve (ATRR)). For any
securitization exposure risk weighted using the 1,250 percent risk weight, the sum of columns B and Q
should equal column A.
(Column A)
Totals
On-balance sheet
9.
securitization exposures
a. Held-to-maturity
securities
$100
(Column B)
Adjustments to
Totals Reported
in Column A
(Column Q)
Exposure
Amount
$0
1250%
$100
(Column T)
(Column U)
Total Risk-Weighted Asset
Amount by Calculation
Methodology
SSFA
Gross-Up
$0
$0
9.a.
In addition, when a bank applies the 1,250 percent risk weight to an on-balance sheet securitization
exposure, the bank should include in column A of Schedule RC-R, Part II, item 9.d, any amount reported
in Schedule RC, item 11, “Other assets,” for accrued interest receivable on the securitization exposures,
regardless of where the securitization exposure is reported on the balance sheet in Schedule RC. The
amount reported in column Q should match the amount reported in column A
If a bank – regardless of whether it makes the AOCI opt-out election – is applying the SSFA or Gross-Up
Approach, the reporting is significantly different due to the fact that the bank reports the risk-weighted
asset amount in columns T or U.
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General Instructions for Schedule RC-R, Part II. (cont.)
In the case where a bank has a securitization exposure with a balance sheet value of $100, it would report
$100 in both columns A and B. If the bank applies the SSFA and calculates a risk-weighted asset exposure of
$20 for that securitization, the bank would report $20 in column T. Since it is using the SSFA for all its
securitization exposures, the bank must report $0 in column U.
(Column A)
Totals
On-balance sheet
9.
securitization exposures
a. Held-to-maturity
securities
$100
(Column B)
Adjustments to
Totals Reported
in Column A
(Column Q)
Exposure
Amount
1250%
$100
$0
(Column T)
(Column U)
Total Risk-Weighted Asset
Amount by Calculation
Methodology
SSFA
Gross-Up
$20
$0
9.a.
A bank, at its discretion, could also use both the 1,250 percent risk weight for some securitization exposures
and either the SSFA or Gross-Up Approach for other securitization exposures. For example, Bank Z has three
securitization exposures, each valued at $100 on the balance sheet. Bank Z chooses to apply the 1,250
percent risk weight to one exposure and use the Gross-Up Approach to calculate risk-weighted assets for the
other two exposures. Assume that the risk-weighted asset amount under the Gross-Up Approach is $20 for
each exposure.
The bank would report the following:
(Column A)
Totals
On-balance sheet
9.
securitization exposures
a. Held-to-maturity
securities
$300
(Column B)
Adjustments to
Totals Reported
in Column A
(Column Q)
Exposure
Amount
$200
1250%
$100
(Column T)
(Column U)
Total Risk-Weighted Asset
Amount by Calculation
Methodology
SSFA
Gross-Up
$0
$40
9.a.
The $200 reported under column B reflects the balance sheet amounts of the two securitization exposures risk
weighted using the Gross-Up Approach. This ensures that the sum of columns B and Q continues to equal the
amount reported in column A. The $40 under column U reflects the risk-weighted asset amount of the sum of
the two securitization exposures that were risk weighted using the Gross-Up Approach. This $40 is included in
risk-weighted assets before deductions in item 28 of Schedule RC-R, Part II.
Banks That Are Subject to the Market Risk Capital Rule
The banking agencies' regulatory capital rules require all banks with significant market risk to measure
their market risk exposure and hold sufficient capital to mitigate this exposure. In general, a bank is
subject to the market risk capital rule if its consolidated trading activity, defined as the sum of trading
assets and liabilities as reported in its Call Report for the previous quarter, equals: (1) 10 percent or more
of the bank's total assets as reported in its Call Report for the previous quarter, or (2) $1 billion or more.
However, a bank’s primary federal supervisory authority may exempt or include the bank if necessary or
appropriate for safe and sound banking practices.
For further information, a bank that is subject to the market risk capital rule should refer to the discussion
of “Banks That Are Subject to the Market Risk Capital Rule” in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
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Part II. (cont.)
General Instructions for Schedule RC-R, Part II. (cont.)
Adjustments for Financial Subsidiaries
Section 121 of the Gramm-Leach-Bliley Act allows national banks and insured state banks to establish
entities known as financial subsidiaries. (Savings associations are not authorized under the GrammLeach-Bliley Act to have financial subsidiaries.) One of the statutory requirements for establishing a
financial subsidiary is that a national bank or insured state bank must deduct any investment in a financial
subsidiary from the bank’s assets and tangible equity. Therefore, under the regulatory capital rules, a
bank must deduct the aggregate amount of its outstanding equity investment in a financial subsidiary,
including the retained earnings of the subsidiary, from its common equity tier 1 capital elements in
Schedule RC-R, Part I, item 10.b. In addition, the assets and liabilities of the subsidiary may not be
consolidated with those of the parent bank for regulatory capital purposes.
For further information, a bank with one or more financial subsidiaries should refer to the discussion of
“Adjustments for Financial Subsidiaries” in the General Instructions for Schedule RC-R, Part II, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Treatment of Embedded Derivatives
If a bank has a hybrid contract containing an embedded derivative that must be separated from the host
contract and accounted for as a derivative instrument under ASC Topic 815, Derivatives and Hedging
(formerly FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as
amended), then the host contract and embedded derivative should be treated separately for risk-based
capital purposes. When the fair value of the embedded derivative has been reported as part of the bank's
assets on Schedule RC – Balance Sheet, that fair value (whether positive or negative) should be reported
(as a positive or negative number) in column B of the corresponding asset category item in Schedule RC-R,
Part II (items 1 to 8). The host contract, if an asset, should be risk weighted according to the obligor or, if
relevant, the guarantor or the nature of the collateral. All derivative exposures should be risk weighted in the
derivative items of Schedule RC-R, Part II, as appropriate (items 20 or 21).
Reporting Exposures Hedged with Cleared Eligible Credit Derivatives
Institutions are able to obtain full or partial protection for (i.e., “hedge”) on-balance sheet assets or offbalance sheet items using credit derivatives that are cleared through a qualified central counterparty
(QCCP) or a central counterparty (CCP) that is not a QCCP. In some cases, a cleared credit derivative
used for this purpose meets the definition of an eligible credit derivative in §.2 of the regulatory capital
rules. In these cases, under §.36 of the regulatory capital rules, an institution that is a clearing member or
a clearing member client may recognize the credit risk mitigation benefits of the eligible credit derivative.
More specifically, the risk weight of the underlying exposure (e.g., 20 percent, 50 percent, or 100 percent)
may be replaced with the risk weight of the CCP or QCCP as the protection provider if the credit
derivative is an eligible credit derivative, is cleared through a CCP or a QCCP, and meets the applicable
requirements under §.35 and §.36 of the regulatory capital rules. The risk weight for an eligible credit
derivative cleared through a QCCP is 2 percent or 4 percent, based on conditions set forth in the rules.
The risk weight for an eligible credit derivative cleared through a CCP is determined according to §.32 of
the regulatory capital rules. In addition, the coverage amount provided by an eligible credit derivative
must be adjusted downward under certain conditions as described in §.36 of the regulatory capital rules.
If a clearing member bank or clearing member client bank has obtained full or partial protection for an
on-balance sheet asset or off-balance sheet item using a cleared eligible credit derivative cleared through
a QCCP, the institution may, but is not required to, recognize the benefits of this eligible credit derivative
in determining the risk-weighted asset amount for the hedged exposure in Schedule RC-R, Part II, by
reporting the protected exposure amounts and credit equivalent amounts in the 2 percent or 4 percent
risk-weight category, as appropriate under the regulatory capital rules. Any amount of the exposure that
is not covered by the eligible credit derivative should be reported in the risk-weight category
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General Instructions for Schedule RC-R, Part II. (cont.)
corresponding to the risk weight of the underlying exposure. For example, for an asset with a $200
exposure amount fully covered by an eligible credit derivative cleared through a QCCP that qualifies for a
2 percent risk weight, the institution would report the $200 exposure amount in Column D–2% risk weight
for the appropriate asset category.
Treatment of Certain Centrally Cleared Derivative Contracts
In August 2017, the banking agencies issued supervisory guidance on the regulatory capital treatment of
certain centrally cleared derivative contracts, which are reported in Schedule RC-R, Part II, item 21, in
light of revisions to the rulebooks of certain central counterparties. Under the previous requirements of
these central counterparties’ rulebooks, variation margin transferred to cover the exposure that arises
from marking cleared derivative contracts, and netting sets of such contracts, to fair value was considered
collateral pledged by one party to the other, with title to the collateral remaining with the posting party.
These derivative contracts are referred to as collateralized-to-market contracts. Under the revised
rulebooks of certain central counterparties, variation margin for certain centrally cleared derivative
contracts, and certain netting sets of such contracts, is considered a settlement payment for the exposure
that arises from marking these derivative contracts and netting sets to fair value, with title to the payment
transferring to the receiving party. In these circumstances, the derivative contracts and netting sets are
referred to as settled-to-market contracts.
For further information, an institution with settled-to-market contracts should refer to the discussion of
“Treatment of Certain Centrally Cleared Derivative Contracts” in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports. In addition,
institutions should refer to the August 2017 supervisory guidance in its entirety for purposes of
determining the appropriate regulatory capital treatment of settled-to-market contracts under the
regulatory capital rules.
Treatment of FDIC Loss-Sharing Agreements
Loss-sharing agreements entered into by the FDIC with acquirers of assets from failed institutions are
considered conditional guarantees for risk-based capital purposes due to contractual conditions that
acquirers must meet. The guaranteed portion of assets subject to a loss-sharing agreement may be
assigned a 20 percent risk weight. Because the structural arrangements for these agreements vary
depending on the specific terms of each agreement, institutions should consult with their primary federal
regulator to determine the appropriate risk-based capital treatment for specific loss-sharing agreements.
Allocated Transfer Risk Reserve (ATRR)
If the reporting bank is required to establish and maintain an ATRR as specified in Section 905(a) of the
International Lending Supervision Act of 1983, the ATRR should be reported in Schedule RC-R, Part II,
item 30. The ATRR is not eligible for inclusion in either tier 1 or tier 2 capital.
Any ATRR related to loans and leases held for investment is included on the balance sheet in
Schedule RC, item 4.c, "Allowance for loan and lease losses." However, if the bank must maintain an
ATRR for any asset other than a loan or lease held for investment, the balance sheet category for that
asset should be reported net of the ATRR on Schedule RC. In this situation, the ATRR should be
reported as a negative number (i.e., with a minus (-) sign) in column B, "Adjustments to totals reported in
Column A," of the corresponding asset category in Schedule RC-R, Part II, items 1 through 4 and 7
through 9. The amount to be risk weighted for this asset in columns C through Q, as appropriate, would
be its net carrying value plus the ATRR. For example, a bank has an HTM security issued by a foreign
commercial company against which it has established an ATRR of $20. The security, net of the ATRR, is
included in Schedule RC, item 2.a, "Held-to-maturity securities," at $80. The security should be included
in Schedule RC-R, Part II, item 2.a, column A, at $80. The bank should include $-20 in Schedule RC-R,
item 2.a, column B, and $100 in item 2.a, column I.
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Part II. (cont.)
Item Instructions for Schedule RC-R, Part II.
Balance Sheet Asset Categories
Item No.
Caption and Instructions
NOTE: Schedule RC-R, Part II, items 1 through 8.b, columns A through S, as applicable, are to be
completed semiannually in the June and December reports only.
1
Cash and balances due from depository institutions. Report in column A the amount of
cash and balances due from depository institutions reported in Schedule RC, sum of
items 1.a and 1.b, excluding those balances due from depository institutions that qualify as
securitization exposures as defined in §.2 of the regulatory capital rules.
The amount of those balances due from depository institutions reported in Schedule RC,
items 1.a and 1.b, that qualify as securitization exposures must be reported in
Schedule RC-R, Part II, item 9.d, column A.
•
In column C–0% risk weight, include:
o The amount of currency and coin reported in Schedule RC, item 1.a;
o Any balances due from Federal Reserve Banks reported in Schedule RC, item 1.b;
and
o The insured portions of deposits in FDIC-insured depository institutions and NCUAinsured credit unions reported in Schedule RC, items 1.a and 1.b.
•
In column G–20% risk weight, include:
o Any balances due from depository institutions and credit unions that are organized
under the laws of the United States or a U.S. state reported in Schedule RC,
items 1.a and 1.b, in excess of any applicable FDIC or NCUA deposit insurance limits
for deposit exposures or where the depository institutions are not insured by either
the FDIC or the NCUA;
o Any balances due from Federal Home Loan Banks reported in Schedule RC,
items 1.a and 1.b; and
o The amount of cash items in the process of collection reported in Schedule RC,
item 1.a.
•
In column I–100% risk weight, include all other amounts that are not reported in
columns C through H and J.
•
For balances due from foreign banks and foreign central banks that must be risk
weighted according to the Country Risk Classification (CRC) methodology, assign these
exposures to risk-weight categories based on the CRC methodology described in the
General Instructions for Schedule RC-R, Part II, in the instructions for the FFIEC 031 and
FFIEC 041 Call Reports.
If the reporting bank is the correspondent bank in a pass-through reserve balance
relationship, report in column C the amount of its own reserves as well as those reserve
balances actually passed through to a Federal Reserve Bank on behalf of its respondent
depository institutions.
If the reporting bank is the respondent bank in a pass-through reserve balance relationship,
report in column C the amount of the bank's reserve balances due from its correspondent
bank that its correspondent has actually passed through to a Federal Reserve Bank on the
reporting bank's behalf, i.e., for purposes of this item, treat these balances as balances due
from a Federal Reserve Bank. This risk-based capital treatment differs from the required
reporting described in the Glossary entry for “pass-through reserve balances," which, for
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Part II. (cont.)
Item No.
Caption and Instructions
1
(cont.)
legal and supervisory purposes, treats pass-through reserve balances held by a bank's
correspondent as balances due from a depository institution as opposed to balances due
from the Federal Reserve.
If the reporting bank is a participant in an excess balance account at a Federal Reserve
Bank, report in column C the bank’s balance in this account.
If the reporting bank accounts for any holdings of certificates of deposit (CDs) like availablefor-sale debt securities that do not qualify as securitization exposures, report in column A the
fair value of such CDs. If the bank has made the Accumulated Other Comprehensive Income
opt-out election in Schedule RC-R, Part I, item 3.a, include in column B the difference
between the fair value and amortized cost of these CDs. When fair value exceeds amortized
cost, report the difference as a positive number in column B. When amortized cost exceeds
fair value, report the difference as a negative number (i.e., with a minus (-) sign) in column B.
Risk weight the amortized cost of these CDs in columns C through J, as appropriate.
2
Securities. Do not include securities that qualify as securitization exposures in items 2.a
and 2.b below; instead, report these securities in Schedule RC-R, Part II, items 9.a and 9.b.
In general, under the regulatory capital rules, securitizations are exposures that are
“tranched” for credit risk. Refer to the definitions of securitization, traditional securitization,
synthetic securitization and tranche in §.2 of the regulatory capital rules.
2.a
Held-to-maturity securities. Report in column A the amount of held-to-maturity (HTM)
securities reported in Schedule RC, item 2.a, excluding those HTM securities that qualify as
securitization exposures as defined in §.2 of the regulatory capital rules.
The amount of those HTM securities reported in Schedule RC, item 2.a, that qualify as
securitization exposures are to be reported in Schedule RC-R, Part II, item 9.a, column A.
The sum of Schedule RC-R, Part II, items 2.a and 9.a, column A, must equal Schedule RC,
item 2.a.
Exposure amount to be used for purposes of risk weighting – bank has not made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R,
Part I, item 3.a:
For a security classified as HTM where the bank has not made the AOCI opt-out election
(i.e., most AOCI is included in regulatory capital), the exposure amount to be risk weighted
by the bank is the carrying value of the security, which is the value of the asset reported
(a) on the balance sheet of the bank determined in accordance with GAAP and (b) in
Schedule RC-R, Part II, item 2.a, column A.
Exposure amount to be used for purposes of risk weighting – bank has made the AOCI
opt-out election in Schedule RC-R, Part I, item 3.a:
For a security classified as HTM where the bank has made the AOCI opt-out election
(i.e., most AOCI is not included in regulatory capital), the exposure amount to be risk
weighted by the bank is the carrying value of the security reported (a) on the balance sheet
of the bank and (b) in Schedule RC-R, Part II, item 2.a, column A, less any unrealized gain
on the exposure or plus any unrealized loss on the exposure included in AOCI. For purposes
of determining the exposure amount of an HTM security, an unrealized gain (loss), if any,
on such a security that is included in AOCI is (i) the unamortized balance of the unrealized
gain (loss) that existed at the date of transfer of a debt security transferred into the
held-to-maturity category from the available-for-sale category, or (ii) the unaccreted portion of
other-than-temporary impairment losses on an HTM debt security that was not recognized in
earnings in accordance with ASC Topic 320, Investments-Debt Securities (formerly FASB
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Part II. (cont.)
Item No.
Caption and Instructions
2.a
(cont.)
Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities”).
Thus, for an HTM security with such an unrealized gain (loss), report in column B any
difference between the carrying value of the security reported in column A of this item and its
exposure amount reported under the appropriate risk weighting column C through J.
•
In column B, include the amount of:
o Investments in tier 2 capital of unconsolidated financial institutions that are reported
in Schedule RC, item 2.a, and have been deducted from capital in Schedule RC-R,
Part I, item 45.
For an institution that has adopted the current expected credit losses methodology
(CECL), include as a negative number in column B:
o The portion of Schedule RI-B, Part II, item 7, column B, “Balance end of current
period” for HTM debt securities that relates to HTM securities reported in column A of
this item, less
o The portion of Schedule RC-R, Part II, Memorandum item 4.b, “Amount of
allowances for credit losses on purchased credit-deteriorated assets” for HTM debt
securities that relates to purchased credit-deteriorated HTM securities reported in
column A of this item.
For example, if an institution reports $100 in Schedule RI-B, Part II, item 7, column B,
and $10 in Schedule RC-R, Part II, Memorandum item 4.b, the institution would report
($90) in this column B.
FFIEC 051
•
In column C–0% risk weight. The zero percent risk weight applies to exposures to the
U.S. government, a U.S. government agency, or a Federal Reserve Bank, and those
exposures otherwise unconditionally guaranteed by the U.S. government. Include
exposures to or unconditionally guaranteed by the FDIC or the NCUA. Certain foreign
government exposures and certain entities listed in §.32 of the regulatory capital rules
may also qualify for the zero percent risk weight. Include the exposure amounts of
securities reported in Schedule RC-B, column A, that do not qualify as securitization
exposures that qualify for the zero percent risk weight. Such securities may include
portions of, but may not be limited to:
o Item 1, "U.S. Treasury securities,"
o Item 2, those obligations issued by U.S. Government agencies,
o Item 4.a.(1), those residential mortgage pass-through securities guaranteed by
GNMA,
o Item 4.b.(1), those other residential mortgage-backed securities issued or guaranteed
by U.S. Government agencies, such as GNMA exposures,
o Item 4.c.(1)(a), those commercial mortgage-backed securities (MBS) “Issued or
guaranteed by FNMA, FHLMC, or GNMA” that represent GNMA securities, and
o Item 4.c.(2)(a), those commercial MBS “Issued or guaranteed by U.S. Government
agencies or sponsored agencies” that represent GNMA securities.
o The portion of any exposure reported in Schedule RC, item 2.a, that is secured by
collateral or has a guarantee that qualifies for the zero percent risk weight.
•
In column G–20% risk weight. The 20 percent risk weight applies to general obligations
of U.S. states, municipalities, and U.S. public sector entities. It also applies to exposures
to U.S. depository institutions and credit unions, exposures conditionally guaranteed by
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Part II. (cont.)
Item No.
Caption and Instructions
2.a
(cont.)
the U.S. government, as well as exposures to U.S. government-sponsored enterprises.
Certain foreign government and foreign bank exposures may qualify as indicated in §.32
of the regulatory capital rules. Include the exposure amounts of securities reported in
Schedule RC-B, column A, that do not qualify as securitization exposures that qualify for
the 20 percent risk weight. Such securities may include portions of, but may not be
limited to:
o Item 2, those obligations issued by U.S. Government-sponsored agencies,
Item 3, "Securities issued by states and political subdivisions in the U.S." that
represent general obligation securities,
o Item 4.a.(1), those residential mortgage pass-through securities issued by FNMA
and FHLMC,
o Item 4.b.(1), Other residential mortgage-backed securities "Issued or guaranteed by
U.S. Government agencies or sponsored agencies,"
o Item 4.c.(1)(a), those commercial MBS “Issued or guaranteed by FNMA, FHLMC, or
GNMA” that represent FHLMC and FNMA securities,
o Item 4.c.(2)(a), those commercial MBS “Issued or guaranteed by U.S. Government
agencies or sponsored agencies” that represent FHLMC and FNMA securities,
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies," and
o Any securities categorized as “structured financial products” on Schedule RC-B that
are not securitization exposures and qualify for the 20 percent risk weight. Note:
Many of the structured financial products would be considered securitization
exposures and must be reported in Schedule RC-R, Part II, item 9.a, for purposes of
calculating risk-weighted assets.
o The portion of any exposure reported in Schedule RC, item 2.a, that is secured by
collateral or has a guarantee that qualifies for the 20 percent risk weight.
•
FFIEC 051
In column H–50% risk weight, include the exposure amounts of securities reported in
Schedule RC-B, column A, that do not qualify as securitization exposures that qualify for
the 50 percent risk weight. Such securities may include portions of, but may not be
limited to:
o Item 3, "Securities issued by states and political subdivisions in the U.S.," that
represent revenue obligation securities,
o Item 4.a.(2), "Other [residential mortgage] pass-through securities," that represent
residential mortgage exposures that qualify for 50 percent risk weight. (Pass-through
securities that do not qualify for the 50 percent risk weight should be assigned to the
100 percent risk-weight category.)
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (excluding portions subject to an
FDIC loss-sharing agreement and interest-only securities) that represent residential
mortgage exposures that qualify for 50 percent risk weight, and
o Item 4.b.(3), “All other residential MBS.” Include only those MBS that qualify for the
50 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
Note: Do not include MBS portions that are tranched for credit risk; those must be
reported as securitization exposures in Schedule RC-R, Part II, item 9.a. Exclude
interest-only securities.
o The portion of any exposure reported in Schedule RC, item 2.a, that is secured by
collateral or has a guarantee that qualifies for the 50 percent risk weight.
RC-R-56
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.a
(cont.)
•
FFIEC 051
In column I–100% risk weight, include the exposure amounts of securities reported in
Schedule RC-B, column A, that do not qualify as securitization exposures that qualify for
the 100 percent risk weight. Such securities may include portions of, but may not be
limited to:
o Item 4.a.(2), "Other [residential mortgage] pass-through securities," that represent
residential mortgage exposures that qualify for the 100 percent risk weight,
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (excludes portions subject to an
FDIC loss-sharing agreement), that represent residential mortgage exposures that
qualify for the 100 percent risk weight,
o Item 4.b.(3), "All other residential MBS," Include only those MBS that qualify for the
100 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
(Note: Do not include MBS that are tranched for credit risk; those should be reported
as securitization exposures in Schedule RC-R, Part II, item 9.a.),
o Item 4.c.(1)(b), “Other [commercial mortgage] pass-through securities,”
o Item 4.c.(2)(b), “All other commercial MBS,”
o Item 5.a, "Asset-backed securities," and
RC-R-56a
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○ Any securities reported as “structured financial products” in Schedule RC-B, item 5.b,
2.a
(cont.)
o
o
2.b
that are not securitization exposures and qualify for the 100 percent risk weight.
Note: Many of the structured financial products would be considered securitization
exposures and must be reported in Schedule RC-R, Part II, item 9.a, for purposes of
calculating risk-weighted assets.
The portion of any exposure reported in Schedule RC, item 2.a, that is secured by
collateral or has a guarantee that qualifies for the 100 percent risk weight.
Also include all other HTM securities that do not qualify as securitization exposures
reported in Schedule RC, item 2.a, that are not included in columns C through H
and J.
•
In column J–150% risk weight, include the exposure amounts of securities reported in
Schedule RC-B, column A, that are past due 90 days or more or in nonaccrual status
(except sovereign exposures), excluding those portions that are covered by qualifying
collateral or eligible guarantees as described in §.37 and §.36, respectively, of the
regulatory capital rules.
•
For HTM securities that are directly and unconditionally guaranteed by foreign central
governments or are exposures to foreign banks that do not qualify as securitization
exposures and must be risk-weighted according to the Country Risk Classification (CRC)
methodology, assign these exposures to risk-weight categories based on the CRC
methodology described in the General Instructions for Schedule RC-R, Part II, and the
instructions for Schedule RC-R, Part, II, item 2.a, in the instructions for the FFIEC 031
and FFIEC 041 Call Reports.
Available-for-sale debt securities and equity securities with readily determinable fair
values not held for trading. Report in column A the sum of:
(1) The fair value of AFS debt securities reported in Schedule RC, item 2.b; and
(2) The fair value of equity securities with readily determinable fair values not held for trading
reported in Schedule RC, item 2.c;
excluding the fair value of those debt and equity securities that qualify as securitization
exposures as defined in §.2 of the regulatory capital rules, which must be reported in
Schedule RC-R, Part II, item 9.b, column A. The sum of Schedule RC-R, Part II, items 2.b
and 9.b, column A, must equal the sum of Schedule RC, items 2.b and 2.c.
Exposure amount to be used for purposes of risk weighting by a bank that has not made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R,
Part I, item 3.a:
For a security reported in Schedule RC-R, Part II, item 2.b, column A, where the bank has not
made the AOCI opt-out election (i.e., most AOCI is included in regulatory capital), the
exposure amount to be risk weighted by the bank is:
• For a debt security: the carrying value, which is the value of the asset reported on the
balance sheet of the bank determined in accordance with GAAP (i.e., the fair value of the
AFS debt security) and in column A.
• For equity securities and preferred stock classified as an equity under GAAP:
the adjusted carrying value.1
1 Adjusted carrying value applies only to equity exposures and is defined in §.51 of the regulatory capital rules. In
general, it includes an on-balance sheet amount as well as application of conversion factors to determine on-balance
sheet equivalents of any off-balance sheet commitments to acquire equity exposures. For institutions that have not
made the AOCI opt-out election, the on-balance sheet component is equal to the carrying value. Refer to §.51 for the
precise definition.
FFIEC 051
RC-R-57
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
Exposure amount to be used for purposes of risk weighting by a bank that has made the
AOCI opt-out election in Schedule RC-R, Part I, item 3.a:
For a security reported in Schedule RC-R, Part II, item 2.b, column A, where the bank has
made the AOCI opt-out election (i.e., most AOCI is not included in regulatory capital), the
exposure amount to be risk weighted by the bank is:
• For a debt security: the carrying value, less any unrealized gain on the exposure or plus
any unrealized loss on the exposure included in AOCI.
• For equity securities and preferred stock classified as an equity under GAAP with
readily determinable fair values: the adjusted carrying value.1
•
In column B, a bank that has made the AOCI opt-out election should include the
difference between the fair value and amortized cost of those AFS debt securities that do
not qualify as securitization exposures. This difference equals the amounts reported in
Schedule RC-B, items 1 through 6.b, column D, minus items 1 through 6.b, column C, for
those AFS debt securities included in these items that are not securitization exposures.
o When fair value exceeds cost, report the difference as a positive number in
Schedule RC-R, Part II, item 2.b, column B.
o When cost exceeds fair value, report the difference as a negative number (i.e., with a
minus (-) sign) in Schedule RC-R, Part II, item 2.b, column B.
1 Adjusted carrying value applies only to equity exposures and is defined in §.51 of the regulatory capital rules. In
general, it includes an on-balance sheet amount as well as application of conversion factors to determine on-balance
sheet equivalents of any off-balance sheet commitments to acquire equity exposures. For institutions that have made
the AOCI opt-out election, the adjusted carrying value of an on-balance sheet equity exposure, such as an equity
security with a readily determinable fair value not held for trading, is equal to the carrying value of the equity
exposure, i.e., the value of the asset on the balance sheet determined in accordance with U.S. GAAP. Refer to §.51
for the precise definition.
FFIEC 051
RC-R-58
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
FFIEC 051
Example: A bank reports an AFS debt security that is not a securitization exposure on its
balance sheet in Schedule RC, item 2.b, at a carrying value (i.e., fair value) of $105. The
amortized cost of the debt security is $100. The bank has made the AOCI opt-out
election in Schedule RC-R, Part I, item 3.a. The AFS debt security has a $5 unrealized
gain that is included in AOCI. In Schedule RC-R, Part II, item 2.b, the bank would report:
a. $105 in column A. This is the carrying value of the AFS debt security on the bank’s
balance sheet.
b. $5 in column B. This is the difference between the carrying value (i.e., fair value) of
the debt security and its exposure amount that is subject to risk weighting. For a
bank that has made the AOCI opt-out election, column B will typically represent the
amount of the unrealized gain or unrealized loss on the security. Gains are reported
as positive numbers; losses as negative numbers. (Note: If the bank has not made
or cannot make the opt-out election, there will be no adjustment to be reported in
column B.)
c. $100 is the exposure amount subject to risk weighting. This amount will be reported
under the appropriate risk weight associated with the exposure (columns C through
J). For a bank that has made the opt-out election, the exposure amount typically will
be the carrying value (i.e., fair value) of the debt security excluding any unrealized
gain or loss.
•
In column B, for a bank that has made the AOCI opt-out election, no amount should be
included for equity securities and preferred stock classified as an equity under GAAP with
readily determinable fair values that are reported in Schedule RC-R, Part II, item 2.b,
column A.
•
In column B, include the amount of investments in the capital of unconsolidated financial
institutions that are reported in Schedule RC, item 2.c, and have been deducted from
capital in Schedule RC-R, Part I, item 13, item 24, and item 45.
•
In column C–0% risk weight, the zero percent risk weight applies to exposures to the U.S.
government, a U.S. government agency, or a Federal Reserve Bank, and those
exposures otherwise unconditionally guaranteed by the U.S. government. Include
exposures to or unconditionally guaranteed by the FDIC or the NCUA. Certain foreign
government exposures and certain entities listed in §.32 of the regulatory capital rules
may also qualify for zero percent risk weight. Include the exposure amounts of those
debt securities reported in Schedule RC-B, column C, that do not qualify as securitization
RC-R-59
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
exposures that qualify for the zero percent risk weight. Such debt securities may include
portions of, but may not be limited to:
○ Item 1, "U.S. Treasury securities,"
○ Item 2, those obligations issued by U.S. Government agencies,
o Item 4.a.(1), those residential mortgage pass-through securities guaranteed by
GNMA,
o Portions of item 4.b.(1), Other residential mortgage-backed securities (MBS) "Issued
or guaranteed by U.S. Government agencies or sponsored agencies," such as
GNMA exposures,
o Item 4.c.(1)(a), certain portions of commercial MBS “Issued or guaranteed by FNMA,
FHLMC, or GNMA” that represent GNMA securities, and
o Item 4.c.(2)(a), certain portions of commercial MBS “Issued or guaranteed by U.S.
Government agencies or sponsored agencies” that represent GNMA securities.
o The portion of any exposure reported in Schedule RC, item 2.b, that is secured by
collateral or has a guarantee that qualifies for the zero percent risk weight.
•
FFIEC 051
In column G–20% risk weight, the 20 percent risk weight applies to general obligations of
U.S. states, municipalities, and U.S. public sector entities. It also applies to exposures to
U.S. depository institutions and credit unions, exposures conditionally guaranteed by the
U.S. government, as well as exposures to U.S. government sponsored enterprises.
Certain foreign government and foreign bank exposures may qualify for the 20 percent
risk weight as indicated in §.32 of the regulatory capital rules. Include the exposure
amounts of those debt securities reported in Schedule RC-B, column C, that do not
qualify as securitization exposures that qualify for the 20 percent risk weight. Such debt
securities may include portions of, but may not be limited to:
o Item 2, those obligations issued by U.S. Government-sponsored agencies (exclude
interest-only securities),
o Item 3, "Securities issued by states and political subdivisions in the U.S." that
represent general obligation securities,
o Item 4.a.(1), those residential mortgage pass-through securities issued by FNMA and
FHLMC (exclude interest-only securities),
o Item 4.b.(1), Other residential MBS "Issued or guaranteed by U.S. Government
agencies or sponsored agencies," (exclude interest-only securities)
o Item 4.c.(1)(a), those commercial MBS “Issued or guaranteed by FNMA, FHLMC, or
GNMA” that represent FHLMC and FNMA securities (exclude interest-only
securities),
o Item 4.c.(2)(a), those commercial MBS “Issued or guaranteed by U.S. Government
agencies or sponsored agencies” that represent FHLMC and FNMA securities
(exclude interest-only securities),
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (exclude interest-only securities),
and
o Any securities categorized as “structured financial products” on Schedule RC-B that
are not securitization exposures and qualify for the 20 percent risk weight. Note:
Many of the structured financial products would be considered securitization
exposures and must be reported in Schedule RC-R, Part II, item 9.b, for purposes of
calculating risk-weighted assets. Exclude interest-only securities.
o The portion of any exposure reported in Schedule RC, item 2.b, that is secured by
collateral or has a guarantee that qualifies for the 20 percent risk weight.
RC-R-60
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
•
In column H–50% risk weight, include the exposure amounts of those debt securities
reported in Schedule RC-B, column C, that do not qualify as securitization exposures that
qualify for the 50 percent risk weight. Such debt securities may include portions of, but
may not be limited to:
o Item 3, "Securities issued by states and political subdivisions in the U.S.," that
represent revenue obligation securities,
○ Item 4.a.(2), "Other [residential mortgage] pass-through securities," (that represent
residential mortgage exposures that qualify for the 50 percent risk weight.
(Pass-through securities that do not qualify for the 50 percent risk weight should
be assigned to the 100 percent risk weight category.)
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (exclude portions subject to an
FDIC loss-sharing agreement and interest-only securities) that represent residential
mortgage exposures that qualify for the 50 percent risk weight, and
o Item 4.b.(3), “All other residential MBS.” Include only those MBS that qualify for the
50 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
Note: Do not include MBS that are tranched for credit risk; those should be reported
as securitization exposures in Schedule RC-R, Part II, item 9.b. Do not include
interest-only securities.
o The portion of any exposure reported in Schedule RC, item 2.b, that is secured by
collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the exposure amounts of those debt securities
reported in Schedule RC-B, column C, that do not qualify as securitization exposures that
qualify for the 100 percent risk weight. Such debt securities may include portions of, but
may not be limited to:
o Item 4.a.(2), "Other [residential mortgage] pass-through securities," that represent
residential mortgage exposures that qualify for the 100 percent risk weight,
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (excluding portions subject to an
FDIC loss-sharing agreement) that represent residential mortgage exposures that
qualify for the 100 percent risk weight,
o Item 4.b.(3), "All other residential MBS." Include only those MBS that qualify for the
100 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
Note: Do not include MBS portions that are tranched for credit risk; those should be
reported as securitization exposures in Schedule RC-R, Part II, item 9.b.
o Item 4.c.(1)(b), “Other [commercial mortgage] pass-through securities,”
o Item 4.c.(2)(b), “All other commercial MBS,”
o Item 5.a, "Asset-backed securities,"
o Any securities reported as “structured financial products” in Schedule RC-B, item 5.b,
that are not securitization exposures and qualify for the 100 percent risk weight.
Note: Many of the structured financial products would be considered securitization
exposures and must be reported in Schedule RC-R, Part II, item 9.b, for purposes of
calculating risk-weighted assets.
o The portion of any exposure reported in Schedule RC, item 2.b, that is secured by
collateral or has a guarantee that qualifies for the 100 percent risk weight.
o All other AFS debt securities that do not qualify as securitization exposures reported
in Schedule RC, item 2.b, that are not included in columns C through H, J through N,
or R.
FFIEC 051
RC-R-61
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
FFIEC 051
Also include in column I–100% risk weight the exposure amounts of publicly traded equity
exposures with readily determinable fair values and equity exposures to investment funds
with readily determinable fair values (including mutual funds) reported in Schedule RC,
item 2.c, to the extent that the aggregate carrying value of the bank’s equity exposures
does not exceed 10 percent of total capital. If the bank’s aggregate carrying value of
equity exposures is greater than 10 percent of total capital, the bank must report the
exposure amount of its equity exposures to investments funds with readily determinable
fair values (including mutual funds) in column R (and the risk-weighted asset amount of
such AFS equity exposures in column S) and the exposure amount of its other equity
exposures with readily determinable fair values in either columns L or N, as appropriate.
For further information on the treatment of equity exposures, refer to §.51 to §.53 of the
regulatory capital rules.
•
In column J–150% risk weight, include the exposure amounts of securities reported in
Schedule RC-B, column C, that are past due 90 days or more or in nonaccrual status
(except sovereign exposures), excluding those portions that are covered by qualifying
collateral or eligible guarantees as described in §.37 and §.36, respectively, of the
regulatory capital rules.
•
In column L–300% risk weight, for publicly traded equity securities with readily
determinable fair values reported in Schedule RC, item 2.c (except equity securities to
investment firms), include the fair value of these equity securities as reported in
Schedule RC, item 2.c.
•
In column N–600% risk weight, or equity securities to investment firms with readily
determinable fair values reported in Schedule RC, item 2.c, include the fair value of these
equity securities as reported in Schedule RC, item 2.c.
•
In columns R and S—Application of Other Risk-Weighting Approaches, include the
bank’s equity exposures to investment funds with readily determinable fair values
RC-R-62
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.b
(cont.)
(including mutual funds) reported in Schedule RC, item 2.c, if the aggregate carrying
value of the bank’s equity exposures is greater than 10 percent of total capital. Report in
column R the exposure amount of these equity exposures to investment funds. Report in
column S the risk-weighted asset amount of these equity exposures to investment funds
as measured under the full look-through approach, the simple modified look-through
approach, or the alternative modified look-through approach described in §.53 of the
regulatory capital rules. All three of these approaches require a minimum risk weight of
20 percent. For further information, refer to the discussion of “Treatment of Equity
Exposures” in the General Instructions for Schedule RC-R, Part II.
•
3
3.a
FFIEC 051
For available-for-sale debt securities and equity securities with readily determinable
fair values not held for trading that are directly and unconditionally guaranteed by
foreign central governments or are exposures to foreign banks that do not qualify as
securitization exposures and must be risk-weighted according to the Country Risk
Classification (CRC) methodology, assign these exposures to risk-weight categories
based on the CRC methodology described in the General Instructions for
Schedule RC-R, Part II, and the instructions for Schedule RC-R, Part, II, item 2.b, in
the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold (in domestic offices). Report in column A the amount of federal funds
sold reported in Schedule RC, item 3.a, excluding those federal funds sold that qualify as
securitization exposures as defined in §.2 of the regulatory capital rules. The amount of
those federal funds sold reported in Schedule RC, items 3.a, that qualify as securitization
exposures are to be reported in Schedule RC-R, Part II, item 9.d, column A.
•
In column C–0% risk weight, include the portion of Schedule RC, item 3.a, that is directly
and unconditionally guaranteed by U.S. Government agencies. Also include the portion
of any exposure reported in Schedule RC, item 3.a, that is secured by collateral or has a
guarantee that qualifies for the zero percent risk weight.
•
In column G–20% risk weight, include exposures to U.S. depository institution
counterparties. Also include the portion of any exposure reported in Schedule RC,
item 3.a, that is secured by collateral or has a guarantee that qualifies for the 20 percent
risk weight.
•
In column H – 50% risk weight, include any exposure reported in Schedule RC, item 3.a,
that is secured by collateral or has a guarantee that qualifies for the 50 percent risk
weight.
•
In column I–100% risk weight, include exposures to non-depository institution
counterparties that lack qualifying collateral (refer to the regulatory capital rules for
specific criteria). Also include the amount of federal funds sold reported in Schedule RC,
item 3.a, that are not included in columns C through H and J. Also include the portion of
any exposure reported in Schedule RC, item 3.a, that is secured by collateral or has a
guarantee that qualifies for the 100 percent risk weight.
RC-R-62a
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
3.a
(cont.)
•
FFIEC 051
For federal funds sold that that are directly and unconditionally guaranteed by foreign
central governments or exposures to foreign banks and must be risk weighted according
to the Country Risk Classification (CRC) methodology, assign these exposures to riskweight categories based on the CRC methodology described in the General Instructions
for Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
RC-R-62b
(12-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
3.b
Caption and Instructions
Securities purchased under agreements to resell. Report in columns A and B the
amount of securities purchased under agreements to resell (securities resale agreements,
i.e., reverse repos) reported in Schedule RC, item 3.b, excluding those securities resale
agreements that qualify as securitization exposures as defined in §.2 of the regulatory capital
rules. The amount of those securities resale agreements reported in Schedule RC, item 3.b,
that qualify as securitization exposures are to be reported in Schedule RC-R, Part II, item 9.d,
column A.
•
4
Note: For purposes of risk weighting, please distribute on-balance sheet securities
purchased under agreements to resell reported in Schedule RC, item 3.b, within the riskweight categories in Schedule RC-R, Part II, item 16, “Repo-style transactions.” Banks
should report their securities purchased under agreements to resell in item 16 in order for
institutions to calculate their exposure, and thus risk-weighted assets, based on master
netting set agreements covering repo-style transactions.
Loans and leases held for sale. Report in column A of the appropriate subitem the carrying
value of loans and leases held for sale (HFS) reported in Schedule RC, item 4.a, excluding
those HFS loans and leases that qualify as securitization exposures as defined in §.2 of the
regulatory capital rules.
The carrying value of those HFS loans and leases reported in Schedule RC, item 4.a, that
qualify as securitization exposures must be reported in Schedule RC-R, Part II, item 9.d,
column A.
The sum of the amounts reported in column A for items 4.a through 4.d of Schedule RC-R,
Part II, plus the carrying value of HFS loans and leases that qualify as securitization
exposures and are reported in column A of item 9.d of Schedule RC-R, Part II, must equal
Schedule RC, item 4.a.
FFIEC 051
RC-R-63
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
4.a
Caption and Instructions
Residential mortgage exposures. Report in column A the carrying value of loans held for
sale (HFS) reported in Schedule RC, item 4.a, that meet the definition of a residential
mortgage exposure or a statutory multifamily mortgage1 in §.2 of the regulatory capital rules.
Include in column A the carrying value of:
• HFS loans secured by first or subsequent liens on 1-4 family residential properties
(excluding those that qualify as securitization exposures) that are reported in
Schedule RC-C, Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b), and
• HFS loans secured by first or subsequent liens on multifamily residential properties with
an original and outstanding amount of $1 million or less (excluding those that qualify as
securitization exposures) that are reported in Schedule RC-C, Part I, item 1.d,
as these HFS loans would meet the regulatory capital rules’ definition of residential mortgage
exposure.
1
Statutory multifamily mortgage means a loan secured by a multifamily residential property that meets the
requirements under Section 618(b)(1) of the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991, and that meets the following criteria:
(1) The loan is made in accordance with prudent underwriting standards;
(2) The principal amount of the loan at origination does not exceed 80 percent of the value of the property (or 75
percent of the value of the property if the loan is based on an interest rate that changes over the term of the loan)
where the value of the property is the lower of the acquisition cost of the property or the appraised (or, if
appropriate, evaluated) value of the property;
(3) All principal and interest payments on the loan must have been made on a timely basis in accordance with the
terms of the loan for at least one year prior to applying a 50 percent risk weight to the loan, or in the case where
an existing owner is refinancing a loan on the property, all principal and interest payments on the loan being
refinanced must have been made on a timely basis in accordance with the terms of the loan for at least one year
prior to applying a 50 percent risk weight to the loan;
(4) Amortization of principal and interest on the loan must occur over a period of not more than 30 years and the
minimum original maturity for repayment of principal must not be less than 7 years;
(5) Annual net operating income (before making any payment on the loan) generated by the property securing the
loan during its most recent fiscal year must not be less than 120 percent of the loan's current annual debt service
(or 115 percent of current annual debt service if the loan is based on an interest rate that changes over the term
of the loan) or, in the case of a cooperative or other not-for-profit housing project, the property must generate
sufficient cash flow to provide comparable protection to the institution; and
(6) The loan is not more than 90 days past due, or on nonaccrual.
A loan that meets the requirements of Section 618(b)(1) of the Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991 is a loan:
(i) secured by a first lien on a residence consisting of more than 4 dwelling units;
(ii) under which
(I) the rate of interest does not change over the term of the loan, (b) the principal obligation does not exceed 80
percent of the appraised value of the property, and (c) the ratio of annual net operating income generated by
the property (before payment of any debt service on the loan) to annual debt service on the loan is not less
than 120 percent; or
(II) the rate of interest changes over the term of the loan, (b) the principal obligation does not exceed 75 percent
of the appraised value of the property, and (c) the ratio of annual net operating income generated by the
property (before payment of any debt service on the loan) to annual debt service on the loan is not less than
115 percent;
(iii) under which
(I) amortization of principal and interest occurs over a period of not more than 30 years;
(II) the minimum maturity for repayment of principal is not less than 7 years; and
(III) timely payment of all principal and interest, in accordance with the terms of the loan, occurs for a period of
not less than 1 year; and
(iv) that meets any other underwriting characteristics that the appropriate Federal banking agency may establish,
consistent with the purposes of the minimum acceptable capital requirements to maintain the safety and
soundness of financial institutions.
FFIEC 051
RC-R-64
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.a
(cont.)
Exclude from this item:
• HFS loans secured by multifamily residential properties included in Schedule RC-C,
Part I, item 1.d, that do not meet the definition of a residential mortgage exposure or a
statutory multifamily mortgage and are not securitization exposures, and
• HFS 1-4 family residential construction loans reported in Schedule RC-C, Part I,
item 1.a.(1), that are not securitization exposures.
These HFS loans should be reported in Schedule RC-R, Part II, item 4.c, if they are past due
90 days or more or on nonaccrual. Otherwise, these HFS loans should be reported in
Schedule RC-R, Part II, item 4.d.
•
In column C–0% risk weight, include the portion of any exposure that meets the definition
of residential mortgage exposure or statutory multifamily mortgage reported in
Schedule RC, item 4.a, that is secured by collateral or has a guarantee that qualifies for
the zero percent risk weight. This would include loans collateralized by deposits at the
reporting institution.
•
In column G–20% risk weight, include the carrying value of the guaranteed portion of
HFS Federal Housing Administration (FHA) and Veterans Administration (VA) mortgage
loans included in Schedule RC-C, Part I, item 1.c.(2)(a). Also include the portion of any
exposure that meets the definition of residential mortgage exposure or statutory
multifamily mortgage reported in Schedule RC, item 4.a, that is secured by collateral or
has a guarantee that qualifies for the 20 percent risk weight. This would include the
portion of such an exposure covered by an FDIC loss-sharing agreement.
•
In column H–50% risk weight, include the carrying value of HFS loans secured by
1-4 family residential properties included in Schedule RC-C, Part I, item 1.c.(1) (only
include qualifying first mortgage loans); qualifying loans from Schedule RC-C, Part I,
items 1.c.(2)(a) and 1.d; and those loans that meet the definition of a residential
mortgage exposure and qualify for 50 percent risk weight under §.32(g) of the regulatory
capital rules. For residential mortgage exposures, the loans must be prudently
underwritten, be fully secured by first liens on 1-4 family residential properties (regardless
of the original and outstanding amount of the loan) or multifamily residential properties
(with an original and outstanding amount of $1 million or less), not 90 days or more past
due or in nonaccrual status, and have not been restructured or modified (unless modified
or restructured solely pursuant to the U.S. Treasury’s Home Affordable Mortgage
Program (HAMP)). Also include loans that meet the definition of statutory multifamily
mortgage in §.2 of the regulatory capital rules. Also include the portion of any exposure
that meets the definition of residential mortgage exposure reported in Schedule RC,
item 4.a, that is secured by collateral or has a guarantee that qualifies for the 50 percent
risk weight.
Notes:
1. Refer to the definition of “residential mortgage exposure” in §.2 of the regulatory capital
rules, and refer to the requirements for risk weighting residential mortgage loans in §.32
of the regulatory capital rules.
2. A residential mortgage loan may receive a 50 percent risk weight if it meets the
qualifying criteria in §.32(g) of the regulatory capital rules:
o A property is owner-occupied or rented;
o The loan is prudently underwritten including the loan amount as a percentage of the
appraised value of the real estate collateral.
o The loan is not 90 days or more past due or on nonaccrual;
o The loan is not restructured or modified (except for loans restructured solely pursuant
to the U.S. Treasury’s HAMP).
FFIEC 051
RC-R-65
(12-18)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
4.a
(cont.)
FFIEC 051
If the bank holds the first lien and junior lien(s) on a residential mortgage exposure,
and no other party holds an intervening lien, the bank must combine the exposures
and treat them as a single first-lien residential mortgage exposure.
3. A first lien home equity line (HELOC) may qualify for 50 percent risk weight if it meets
the qualifying criteria in §.32(g) listed above.
4. A residential mortgage loan of $1 million or less on a property of more than 4 units
may qualify for 50 percent risk weight if it meets the qualifying criteria in §.32(g) listed
above.
•
In column I–100% risk weight, include the carrying value of HFS loans that are residential
mortgage exposures reported in Schedule RC, item 4.a, that are not included in
columns C, G, H, or R. Include HFS loans that are junior lien residential mortgage
exposures if the bank does not hold the first lien on the property, except the portion of
any junior lien residential mortgage exposure that is secured by collateral or has a
guarantee that qualifies for the zero percent, 20 percent, or 50 percent risk weight.
Include HFS loans that are residential mortgage exposures that have been restructured
or modified, except:
o Those loans restructured or modified solely pursuant to the U.S. Treasury’s HAMP,
and
o The portion of any restructured or modified residential mortgage exposure that is
secured by collateral or has a guarantee that qualifies for the zero percent,
20 percent, or 50 percent risk weight.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any HFS exposure reported in Schedule RC, item 4.a, that meets the definition of
residential mortgage exposure or statutory multifamily mortgage and is secured by
qualifying financial collateral that meets the definition of a securitization exposure in §.2
of the regulatory capital rules or is a mutual fund only if the bank chooses to recognize
the risk-mitigating effects of the securitization exposure or mutual fund collateral under
the Simple Approach outlined in §.37 of the regulatory capital rules. Under the Simple
Approach, the risk weight assigned to the collateralized portion of the exposure may not
be less than 20 percent. For information on the reporting of such HFS exposures in
columns R and S, refer to the instructions for Schedule RC-R, Part, II, item 4.a, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
RC-R-66
(12-18)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
4.b
Caption and Instructions
High volatility commercial real estate exposures. Report in column A the carrying value
of loans held for sale (HFS) reported in Schedule RC, item 4.a, that are high volatility
commercial real estate (HVCRE) exposures,1 including HVCRE exposures that are 90 days
or more past due or in nonaccrual status.
1
HVCRE exposure means:
(1) A credit facility secured by land or improved real property that, prior to being reclassified by the institution as a
non-HVCRE exposure pursuant to paragraph (6) of this definition—
(i) Primarily finances, has financed, or refinances the acquisition, development, or construction of real property;
(ii) Has the purpose of providing financing to acquire, develop, or improve such real property into incomeproducing real property; and
(iii) Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the
repayment of such credit facility.
(2) An HVCRE exposure does not include a credit facility financing—
(i) The acquisition, development, or construction of properties that are—
(A) One- to four-family residential properties. Credit facilities that do not finance the construction of one- to
four-family residential structures, but instead solely finance improvements such as the laying of sewers,
water pipes, and similar improvements to land, do not qualify for the one- to four-family residential
properties exclusion;
(B) Real property that would qualify as an investment in community development; or
(C) Agricultural land;
(ii) The acquisition or refinance of existing income-producing real property secured by a mortgage on such
property, if the cash flow being generated by the real property is sufficient to support the debt service and
expenses of the real property, in accordance with the institution's applicable loan underwriting criteria for
permanent financings;
(iii) Improvements to existing income-producing improved real property secured by a mortgage on such
property, if the cash flow being generated by the real property is sufficient to support the debt service and
expenses of the real property, in accordance with the institution's applicable loan underwriting criteria for
permanent financings; or
(iv) Commercial real property projects in which—
(A) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio
as determined by an institution’s primary federal regulator;
(B) The borrower has contributed capital of at least 15 percent of the real property's appraised, `as
completed' value to the project in the form of—
(1) Cash;
(2) Unencumbered readily marketable assets;
(3) Paid development expenses out-of-pocket; or
(4) Contributed real property or improvements; and
(C) The borrower contributed the minimum amount of capital described under paragraph (2)(iv)(B) of this
definition before the institution advances funds (other than the advance of a nominal sum made in order
to secure the institution's lien against the real property) under the credit facility, and such minimum
amount of capital contributed by the borrower is contractually required to remain in the project until the
HVCRE exposure has been reclassified by the institution as a non-HVCRE exposure under
paragraph (6) of this definition;
(3) An HVCRE exposure does not include any loan made prior to January 1, 2015;
(4) An HVCRE exposure does not include a credit facility reclassified as a non-HVCRE exposure under
paragraph (6) of this definition.
(5) Value of contributed real property: For the purposes of this HVCRE exposure definition, the value of any real
property contributed by a borrower as a capital contribution is the appraised value of the property as determined
under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339), in connection with the extension of the credit facility or loan to such borrower.
(6) Reclassification as a non-HVCRE exposure: For purposes of this HVCRE exposure definition and with respect to a
credit facility and an institution, an institution may reclassify an HVCRE exposure as a non-HVCRE exposure upon—
(i) The substantial completion of the development or construction of the real property being financed by the
credit facility; and
(ii) Cash flow being generated by the real property being sufficient to support the debt service and expenses of
the real property, in accordance with the institution's applicable loan underwriting criteria for permanent
financings.
(7) For purposes of this definition, an institution is not required to reclassify a credit facility that was originated on or
after January 1, 2015, and prior to April 1, 2020.
FFIEC 051
RC-R-67
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.b
(cont.)
•
In column C–0% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFS that is secured by collateral or has a guarantee that qualifies for
the zero percent risk weight. This would include the portion of HVCRE exposures
collateralized by deposits at the reporting institution.
•
In column G–20% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFS that is secured by collateral or has a guarantee that qualifies for
the 20 percent risk weight. This would include the portion of any HVCRE exposure
covered by an FDIC loss-sharing agreement.
•
In column H–50% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFS that is secured by collateral or has a guarantee that qualifies for
the 50 percent risk weight.
•
In column I–100% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFS that is secured by collateral or has a guarantee that qualifies for
the 100 percent risk weight.
•
In column J–150% risk weight, include the carrying value of HVCRE exposures, as
defined in §.2 of the regulatory capital rules, included in Schedule RC, item 4.a, excluding
those portions of the carrying value that are covered by qualifying collateral or eligible
guarantees as described in §.37 and §.36, respectively, of the regulatory capital rules.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any HVCRE exposure included in loans and leases HFS reported in Schedule RC,
item 4.a, that is secured by qualifying financial collateral that meets the definition of a
securitization exposure in §.2 of the regulatory capital rules or is a mutual fund only if the
bank chooses to recognize the risk-mitigating effects of the securitization exposure or
mutual fund collateral under the Simple Approach outlined in §.37 of the regulatory
capital rules. Under the Simple Approach, the risk weight assigned to the collateralized
portion of the exposure may not be less than 20 percent. For information on the reporting
of such HFS exposures in columns R and S, refer to the instructions for Schedule RC-R,
Part, II, item 4.b, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
4.c
Exposures past due 90 days or more or on nonaccrual. Report in column A the carrying
value of loans and leases held for sale (HFS) reported in Schedule RC, item 4.a., that are
90 days or more past due or in nonaccrual status according to the requirements set forth in
§.32(k) of the regulatory capital rules. Do not include HFS sovereign exposures or HFS
residential mortgage exposures, as described in §.32(a) and §.32(g), respectively, that are
90 days or more past due or in nonaccrual status (report such past due and nonaccrual
exposures in Schedule RC-R, Part II, item 4.d and item 4.a, respectively). Also do not
include HFS high volatility commercial real estate exposures that are 90 days or more past
due or in nonaccrual status (report such exposures in Schedule RC-R, Part II, item 4.b).
•
FFIEC 051
In column C–0% risk weight, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
zero percent risk weight. This would include the portion of loans and leases HFS
collateralized by deposits at the reporting institution.
RC-R-68
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.c
(cont.)
•
In column G–20% risk weight, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
20 percent risk weight. This would include the portion of HFS loans covered by an FDIC
loss-sharing agreement.
•
In column H–50% risk weight, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the 50
percent risk weight.
•
In column I–100% risk weight,, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
100 percent risk weight.
•
In column J–150% risk weight, include the carrying value of loans and leases HFS
included in Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual
status (except as noted above), excluding those portions that are covered by qualifying
collateral or eligible guarantees as described in §.37 and §.36, respectively, of the
regulatory capital rules.
FFIEC 051
RC-R-68a
(6-20)
RC-R – REGULATORY CAPITAL
This page intentionally left blank.
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.c
(cont.)
•
4.d
FFIEC 051
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loans and leases HFS included in Schedule RC, item 4.a, that are 90 days or more
past due or in nonaccrual status (except as noted above), that is secured by qualifying
financial collateral that meets the definition of a securitization exposure in §.2 of the
regulatory capital rules or is a mutual fund only if the bank chooses to recognize the riskmitigating effects of the securitization exposure or mutual fund collateral under the Simple
Approach outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the
risk weight assigned to the collateralized portion of the exposure may not be less than 20
percent. For information on the reporting of such HFS exposures in columns R and S,
refer to the instructions for Schedule RC-R, Part, II, item 4.c, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
All other exposures. Report in column A the carrying value of loans and leases held for
sale (HFS) reported in Schedule RC, item 4.a, that are not reported in Schedule RC-R,
Part II, items 4.a through 4.c above.
•
In column C–0% risk weight, include the carrying value of the unconditionally guaranteed
portion of HFS Small Business Administration (SBA) “Guaranteed Interest Certificates”
purchased in the secondary market that are included in Schedule RC-C, Part I. Also
include the portion of any loans and leases HFS that that are not reported in
Schedule RC-R, Part II, items 4.a through 4.c above, that is secured by collateral or
has a guarantee that qualifies for the zero percent risk weight. This would include the
portion of loans and leases HFS collateralized by deposits at the reporting institution.
•
In column G–20% risk weight, include the carrying value of HFS loans to and
acceptances of other U.S. depository institutions that are reported in Schedule RC-C,
Part I, item 2, plus the carrying value of the guaranteed portion of HFS SBA loans
originated and held by the reporting bank included in Schedule RC-C, Part I, and the
carrying value of the portion of HFS student loans reinsured by the U.S. Department of
Education included in Schedule RC-C, Part I, item 6.d, "Other consumer loans."
Also include the portion of any loans and leases HFS that that are not reported in
Schedule RC-R, Part II, items 4.a through 4.c above, that is secured by collateral or
has a guarantee that qualifies for the 20 percent risk weight. This would include the
portion of loans and leases HFS covered by FDIC loss-sharing agreements.
•
In column H–50% risk weight, include the carrying value of HFS loans that meet the
definition of presold construction loan in §.2 of the regulatory capital rules that qualify for
the 50 percent risk weight. Also include the portion of any loans and leases HFS that that
are not reported in Schedule RC-R, Part II, items 4.a through 4.c above, that is secured
by collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the carrying value of HFS loans and leases
reported in Schedule RC, item 4.a, that are not included in columns C through H, J, or R.
This item would include 1-4 family construction loans reported in Schedule RC-C, Part I,
item 1.a.(1) and loans secured by multifamily residential properties reported in
Schedule RC-C, Part I, item 1.d, with an original amount of more than $1 million. Also
include the carrying value of HFS loans that meet the definition of presold construction
loan in §.2 of the regulatory capital rules that qualify for the 100 percent risk weight.
Also include the portion of any loans and leases HFS that that are not reported in
Schedule RC-R, Part II, items 4.a through 4.c above, that is secured by collateral or
has a guarantee that qualifies for the 100 percent risk weight.
RC-R-69
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.d
(cont.)
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any HFS loans and leases, including HFS eligible margin loans, reported in
Schedule RC, item 4.a, that is secured by qualifying financial collateral that meets the
definition of a securitization exposure in §.2 of the regulatory capital rules or is a mutual
fund only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure or mutual fund collateral under the Simple Approach, or the collateral margin
approach for eligible margin loans, outlined in §.37 of the regulatory capital rules. Under
the Simple Approach, the risk weight assigned to the collateralized portion of the
exposure may not be less than 20 percent. For information on the reporting of such
HFS exposures in columns R and S, refer to the instructions for Schedule RC-R, Part, II,
item 4.d, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
•
For all other HFS loans and leases that must be risk weighted according to the
Country Risk Classification (CRC) methodology, assign these exposures to risk-weight
categories based on the CRC methodology described in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
5
Loans and leases held for investment. Report in column A of the appropriate subitem
the carrying value of loans and leases held for investment (HFI) reported in Schedule RC,
item 4.b, excluding those loans and leases HFI that qualify as securitization exposures as
defined in §.2 of the regulatory capital rules.
The carrying value of those loans and leases HFI that qualify as securitization exposures
must be reported in Schedule RC-R, Part II, item 9.d, column A.
The sum of the amounts reported in column A for items 5.a through 5.d of Schedule RC-R,
Part II, plus the carrying value of loans and leases HFI that qualify as securitization
exposures and are reported in column A of item 9.d of Schedule RC-R, Part II, must equal
Schedule RC, item 4.b.
5.a
Residential mortgage exposures. Report in column A the carrying value of loans HFI
reported in Schedule RC, item 4.b, that meet the definition of a residential mortgage
exposure or a statutory multifamily mortgage1 in §.2 of the regulatory capital rules. Include in
column A the carrying value of:
• Loans HFI secured by first or subsequent liens on 1-4 family residential properties
(excluding those that qualify as securitization exposures) that are reported in Schedule
RC-C, Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b), and
• Loans HFI secured by first or subsequent liens on multifamily residential properties with
an original and outstanding amount of $1 million or less (excluding those that qualify as
securitization exposures) that are reported in Schedule RC-C, Part I, item 1.d,
as these loans would meet the regulatory capital rules’ definition of residential mortgage
exposure.
Exclude from this item:
Loans HFI secured by multifamily residential properties included in Schedule RC-C,
Part I, item 1.d, that do not meet the definition of a residential mortgage exposure or a
statutory multifamily mortgage and are not securitization exposures, and
• 1-4 family residential construction loans HFI reported in Schedule RC-C, Part I,
item 1.a.(1), that are not securitization exposures.
•
1
See the instructions for Schedule RC-R, Part II, item 4.a, above for the definition of statutory multifamily mortgage.
FFIEC 051
RC-R-70
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
These loans should be reported in Schedule RC-R, Part II, item 5.c, if they are past due
90 days or more or on nonaccrual. Otherwise, these HFI loans should be reported in
Schedule RC-R, Part II, item 5.d.
•
In column B, an institution that has adopted the current expected credit losses
methodology (CECL) should include as a positive number the portion of Schedule RC-R,
Part II, Memorandum item 4.a, “Amount of allowances for credit losses on purchased
credit-deteriorated assets” for loans and leases held for investment that are applicable to
purchased credit-deteriorated residential mortgage exposures.
•
In column C–0% risk weight, include the portion of any HFI exposure that meets the
definition of residential mortgage exposure or statutory multifamily mortgage reported in
Schedule RC, item 4.b, that is secured by collateral or has a guarantee that qualifies for
the zero percent risk weight. This would include loans and leases HFI collateralized by
deposits at the reporting institution.
•
In column G–20% risk weight, include the carrying value of the guaranteed portion of
FHA and VA mortgage loans HFI included in Schedule RC-C, Part I, item 1.c.(2)(a).
Also include the portion of any loan HFI which meets the definition of residential
mortgage exposure or statutory multifamily mortgage reported in Schedule RC, item 4.b,
that is secured by collateral or has a guarantee that qualifies for the 20 percent risk
weight. This would include the portion of loans HFI covered by an FDIC loss-sharing
agreement.
•
In column H–50% risk weight, include the carrying value of loans HFI secured by
1-4 family residential properties included in Schedule RC-C, Part I, item 1.c.(1) (only
include qualifying first mortgage loans); qualifying loans from Schedule RC-C, Part I,
items 1.c.(2)(a) and 1.d; and those loans that meet the definition of a residential
mortgage exposure and qualify for 50 percent risk weight under §.32(g) of the regulatory
capital rules. For residential mortgage exposures, the loans must be prudently
underwritten, be fully secured by first liens on 1-4 family residential properties (regardless
of the original and outstanding amount of the loan) or multifamily residential properties
(with an original and outstanding amount of $1 million or less), not 90 days or more past
due or in nonaccrual status, and have not been restructured or modified (unless modified
or restructured solely pursuant to the U.S. Treasury’s Home Affordable Mortgage
Program (HAMP)). Also include loans HFI that meet the definition of statutory multifamily
mortgage in §.2 of the regulatory capital rules. Also include the portion of any loan HFI
which meets the definition of residential mortgage exposure reported in Schedule RC,
item 4.b, that is secured by collateral or has a guarantee that qualifies for the 50 percent
risk weight.
Notes:
1. Refer to the definition of “residential mortgage exposure” in §.2 of the regulatory
capital rules, and refer to the requirements for risk weighting residential mortgage loans
in §.32 of the regulatory capital rules.
2. A residential mortgage loan may receive a 50 percent risk weight if it meets the
qualifying criteria in §.32(g) of the regulatory capital rules:
o A property is owner-occupied or rented;
o The loan is prudently underwritten including the loan amount as a percentage of the
appraised value of the real estate collateral.
o The loan is not 90 days or more past due or on nonaccrual;
o The loan is not restructured or modified (except for loans restructured solely pursuant
to the U.S. Treasury’s HAMP).
FFIEC 051
RC-R-71
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
5.a
(cont.)
5.b
1
If the bank holds the first lien and junior lien(s) on a residential mortgage exposure,
and no other party holds an intervening lien, the bank must combine the exposures
and treat them as a single first-lien residential mortgage exposure.
3. A first lien home equity line (HELOC) may qualify for 50 percent risk weight if it meets
the qualifying criteria in §.32(g) listed above.
4. A residential mortgage loan of $1 million or less on a property of more than 4 units
may qualify for 50 percent risk weight if it meets the qualifying criteria in §.32(g) listed
above.
•
In column I–100% risk weight, include the carrying value of loans HFI related to
residential mortgages exposures reported in Schedule RC, item 4.b, that are not included
in columns C, G, H, or R. Include loans HFI that are junior lien residential mortgage
exposures if the bank does not hold the first lien on the property, except the portion of
any junior lien residential mortgage exposure that is secured by collateral or has a
guarantee that qualifies for the zero percent, 20 percent, or 50 percent risk weight. Also
include loans HFI that are residential mortgage exposures that have been restructured or
modified, except
○ Those loans restructured or modified solely pursuant to the U.S. Treasury’s HAMP,
and
o The portion of any restructured or modified residential mortgage exposure that is
secured by collateral or has a guarantee that qualifies for the zero percent,
20 percent, or 50 percent risk weight.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loan HFI reported in Schedule RC, item 4.b, that meets the definition of residential
mortgage exposure or statutory multifamily mortgage and is secured by qualifying
financial collateral that meets the definition of a securitization exposure in §.2 of the
regulatory capital rules or is a mutual fund only if the bank chooses to recognize the riskmitigating effects of the securitization exposure or mutual fund collateral under the Simple
Approach outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the
risk weight assigned to the collateralized portion of the exposure may not be less than 20
percent. For information on the reporting of such HFI exposures in columns R and S,
refer to the instructions for Schedule RC-R, Part, II, item 5.a, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
High volatility commercial real estate exposures. Report in column A the portion of the
carrying value of loans HFI reported in Schedule RC, item 4.b, that are high volatility
commercial real estate (HVCRE) exposures,1 including HVCRE exposures that are 90 days
or more past due or in nonaccrual status.
•
In column B, an institution that has adopted the current expected credit losses
methodology (CECL) should include as a positive number the portion of Schedule RC-R,
Part II, Memorandum item 4.a, “Amount of allowances for credit losses on purchased
credit-deteriorated assets” for loans and leases held for investment that are applicable to
purchased credit-deteriorated high volatility commercial real estate exposures.
•
In column C–0% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFI, that is secured by collateral or has a guarantee that qualifies for
the zero percent risk weight. This would include the portion of HVCRE loans HFI
collateralized by deposits at the reporting institution.
See the instructions for Schedule RC-R, Part II, item 4.b, above for the definition of HVCRE exposure.
FFIEC 051
RC-R-72
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.b
(cont.)
•
In column G–20% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFI which is secured by collateral or has a guarantee that qualifies for
the 20 percent risk weight. This would include the portion of any HVCRE exposure
covered by an FDIC loss-sharing agreement.
•
In column H–50% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFI which is secured by collateral or has a guarantee that qualifies for
the 50 percent risk weight.
•
In column I–100% risk weight, include the portion of any HVCRE exposure included in
loans and leases HFI which is secured by collateral or has a guarantee that qualifies for
the 100 percent risk weight.
•
In column J–150% risk weight, include the carrying value of HVCRE exposures, as
defined in §.2 of the regulatory capital rules, included in Schedule RC, item 4.b, excluding
those portions of the carrying value that are covered by qualifying collateral or eligible
guarantees as described in §.37 and §.36, respectively, of the regulatory capital rules.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any HVCRE exposure included in loans and leases HFI reported in Schedule RC,
item 4.b, that is secured by qualifying financial collateral that meets the definition of a
securitization exposure in §.2 of the regulatory capital rules or is a mutual fund only if the
bank chooses to recognize the risk-mitigating effects of the securitization exposure or
mutual fund collateral under the Simple Approach outlined in §.37 of the regulatory
capital rules. Under the Simple Approach, the risk weight assigned to the collateralized
portion of the exposure may not be less than 20 percent. For information on the reporting
of such HFI exposures in columns R and S, refer to the instructions for Schedule RC-R,
Part, II, item 5.b, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
5.c
FFIEC 051
Exposures past due 90 days or more or on nonaccrual. Report in column A the carrying
value of loans and leases HFI reported in Schedule RC, item 4.b, that are 90 days or more
past due or in nonaccrual status according to the requirements set forth in §.32(k) of the
regulatory capital rules. Do not include sovereign exposures or residential mortgage
exposures, as described in §.32(a) and §.32(g), respectively, that are 90 days or more past
due or in nonaccrual status (report such past due and nonaccrual exposures in
Schedule RC-R, Part II, items 5.d and 5.a, respectively). Also do not include high volatility
commercial real estate exposures that are 90 days or more past due or in nonaccrual status
(report such exposures in Schedule RC-R, Part II, item 5.b).
•
In column B, an institution that has adopted the current expected credit losses
methodology (CECL) should include as a positive number the portion of Schedule RC-R,
Part II, Memorandum item 4.a, “Amount of allowances for credit losses on purchased
credit-deteriorated assets” for loans and leases held for investment that are applicable to
purchased credit-deteriorated exposures past due 90 days or more or on nonaccrual.
•
In column C–0% risk weight, include the portion of loans and leases HFI included in
Schedule RC, item 4.b, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
zero percent risk weight. This would include the portion of loans and leases HFI
collateralized by deposits at the reporting institution.
RC-R-73
(3-19)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.c
(cont.)
•
In column G–20% risk weight, include the portion of loans and leases HFI included in
Schedule RC, item 4.b, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
20 percent risk weight. This would include the portion of loans and leases HFI covered
by an FDIC loss-sharing agreement.
•
In column H–50% risk weight, include the portion of loans and leases HFI included in
Schedule RC, item 4.b, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the 50
percent risk weight.
•
In column I–100% risk weight, include the portion of loans and leases HFI, included in
Schedule RC, item 4.b, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
100 percent risk weight.
•
In column J–150% risk weight, include the carrying value of loans and leases HFI
included in Schedule RC, item 4.b, that are 90 days or more past due or in nonaccrual
status (except as noted above), excluding those portions that are covered by qualifying
collateral or eligible guarantees as described in §.37 and §.36, respectively, of the
regulatory capital rules.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loans and leases HFI included in Schedule RC, item 4.b, that are 90 days or more
past due or in nonaccrual status (except as noted above), that is secured by qualifying
financial collateral that meets the definition of a securitization exposure in §.2 of the
regulatory capital rules or is a mutual fund only if the bank chooses to recognize the riskmitigating effects of the securitization exposure or mutual fund collateral under the Simple
Approach outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the
risk weight assigned to the collateralized portion of the exposure may not be less than 20
percent. For information on the reporting of such HFI exposures in columns R and S,
refer to the instructions for Schedule RC-R, Part, II, item 5.c, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
5.d
FFIEC 051
All other exposures. Report in column A the carrying value of loans and leases HFI
reported in Schedule RC, item 4.b, that are not reported in items 5.a through 5.c above.
•
In column B, an institution that has adopted the current expected credit losses
methodology (CECL) should include as a positive number the portion of Schedule RC-R,
Part II, Memorandum item 4.a, “Amount of allowances for credit losses on purchased
credit-deteriorated assets” for loans and leases held for investment that are applicable to
all purchased credit-deteriorated exposures not reported in items 5.a through 5.c above.
•
In column C–0% risk weight, include the carrying value of the unconditionally guaranteed
portion of HFI SBA “Guaranteed Interest Certificates” purchased in the secondary market
that are included in Schedule RC-C, Part I. Also include the portion of any loans and
leases HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c above, that is
secured by collateral or has a guarantee that qualifies for the zero percent risk weight.
This would include the portion of loans and leases HFI collateralized by deposits at the
reporting institution.
RC-R-74
(3-19)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.d
(cont.)
•
In column G–20% risk weight, include the carrying value of HFI loans to and acceptances
of other U.S. depository institutions that are reported in Schedule RC-C, Part I, item 2
(excluding the carrying value of any long-term exposures to non-OECD banks), plus the
carrying value of the HFI guaranteed portion of SBA loans originated and held by the
reporting bank included in Schedule RC-C, Part I, and the carrying value of the portion
of HFI student loans reinsured by the U.S. Department of Education included in
Schedule RC-C, Part I, item 6.d, "Other consumer loans." Also include the portion of any
loans and leases HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c
above, that is secured by collateral or has a guarantee that qualifies for the 20 percent
risk weight. This would include the portion of loans and leases HFI covered by FDIC
loss-sharing agreements.
•
In column H–50% risk weight, include the carrying value of loans and leases HFI that
meet the definition of presold construction loan in §.2 of the regulatory capital rules that
qualify for the 50 percent risk weight. Also include the portion of any loans and leases
HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c above, that is secured
by collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the carrying value of loans and leases HFI
reported in Schedule RC, item 4.b, that is not included in columns C through H, J, or R
(excluding loans that are assigned a higher than 100 percent risk weight, such as
HVCRE loans and past due loans). This item would include 1-4 family construction loans
and leases HFI reported in Schedule RC-C, Part I, item 1.a.(1) and the portion of loans
HFI secured by multifamily residential property reported in Schedule RC-C, Part I,
item 1.d, with an original amount of more than $1 million. Also include the carrying value
of loans HFI that meet the definition of presold construction loan in §.2 of the regulatory
capital rules that qualify for the 100 percent risk weight. Also include the portion of any
loans and leases HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c
above, that is secured by collateral or has a guarantee that qualifies for the 100 percent
risk weight.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loans and leases HFI, including eligible margin loans, reported in Schedule RC,
item 4.b, that is secured by qualifying financial collateral that meets the definition of a
securitization exposure in §.2 of the regulatory capital rules or is a mutual fund only if the
bank chooses to recognize the risk-mitigating effects of the securitization exposure or
mutual fund collateral under the Simple Approach, or the collateral margin approach for
eligible margin loans, outlined in §.37 of the regulatory capital rules. Under the Simple
Approach, the risk weight assigned to the collateralized portion of the exposure may not
be less than 20 percent. For information on the reporting of such HFI exposures in
columns R and S, refer to the instructions for Schedule RC-R, Part, II, item 5.d, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
•
For all other loans and leases HFI that must be risk weighted according to the Country
Risk Classification (CRC) methodology, assign these exposures to risk-weight categories
based on the CRC methodology described in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
6
FFIEC 051
LESS: Allowance for loan and lease losses. Report in columns A and B the balance of
the allowance for loan and lease losses or the allowance for credit losses on loans and
leases, as applicable, reported in Schedule RC, item 4.c.
RC-R-75
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
7
Caption and Instructions
Trading assets. Report in column A the fair value of trading assets reported in
Schedule RC, item 5, excluding those trading assets that are securitization exposures, as
defined in §.2 of the regulatory capital rules.
The fair value of those trading assets reported in Schedule RC, item 5, that qualify as
securitization exposures must be reported in Schedule RC-R, Part II, item 9.c, column A.
The sum of Schedule RC-R, Part II, items 7 and 9.c, column A, must equal Schedule RC,
item 5.
If the bank is subject to the market risk capital rule, include in column B the fair value of all
trading assets that are covered positions as defined in Schedule RC-R, Part II, item 27
(except those trading assets that are both securitization exposures and covered positions,
which are excluded from column A of this item 7 and are to be reported instead in
Schedule RC-R, Part II, item 9.c, column A). The bank will report its standardized market
risk-weighted assets in Schedule RC-R, Part II, item 27. For further information on the
market risk capital rule and the meaning of the term “covered position,” refer to the discussion
of “Banks That Are Subject to the Market Risk Capital Rule” in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
For banks not subject to the market risk capital rule and for those trading assets reported in
column A that are held by banks subject to the market risk capital rule and do not meet the
definition of a covered position:
•
In column B, include the portion of the amount reported in Schedule RC, item 5, that
represents the fair value of derivative contracts that are assets (excluding those
derivative contracts reported in Schedule RC, item 5, that qualify as securitization
exposures, which are excluded from column A of this item 7). For purposes of risk
weighting, include the credit equivalent amounts of these derivatives, determined in
accordance with the regulatory capital rules, in the risk-weight categories in
Schedule RC-R, Part II, items 20 and 21, as appropriate. Do not risk weight these
derivatives in this item.
In column B, include the amount of investments in the capital of unconsolidated financial
institutions that are reported in Schedule RC, item 5, and have been deducted from
capital in Schedule RC-R, Part I, item 13, item 17, item 24, and item 45.
Also include in column B the fair value of any unsettled transactions (failed trades) that
are reported as trading assets in Schedule RC, item 5. For purposes of risk weighting,
unsettled transactions are to be reported in Schedule RC-R, Part II, item 22.
•
FFIEC 051
In column C–0% risk weight,
o include the portion of the amount reported in Schedule RC, item 5, that qualifies for
the zero percent risk weight and are not securitization exposures, which may include
the fair value of U.S. Treasury securities, securities issued by U.S. Government
agencies, and mortgage-backed securities (MBS) guaranteed by GNMA.
RC-R-76
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
7
(cont.)
FFIEC 051
Also include the portion of the fair value of any trading assets that is secured by
collateral or has a guarantee that qualifies for the zero percent risk weight. This
would include the portion of trading assets collateralized by deposits at the reporting
institution.
•
In column G–20% risk weight,
o include the portion of the amount reported in Schedule RC, item 5, that qualifies for
the 20 percent risk weight and are not securitization exposures, which may include
the fair value of securities issued by U.S. Government-sponsored agencies; general
obligations issued by states and political subdivisions in the United States; MBS
issued by FNMA and FHLMC; and asset-backed securities, structured financial
products, other debt securities, loans and acceptances, and certificates of deposit
that represent exposures to U.S. depository institutions.
o Also include the portion of the fair value of any trading assets that is secured by
collateral or has a guarantee that qualifies for the 20 percent risk weight. This would
include the portion of trading assets covered by FDIC loss-sharing agreements.
•
In column H–50% risk weight,
o include the portion of the amount reported in Schedule RC, item 5, that qualifies for
the 50 percent risk weight and are not securitization exposures, which may include
the fair value of revenue obligations issued by states and political subdivisions in the
United States and MBS.
o Also include the portion of the fair value of any trading assets that is secured by
collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the portion of the amount reported in
Schedule RC, item 5, that qualifies for the 100 percent risk weight and are not
securitization exposures, which may include the fair value of MBS and other debt
securities that represent exposures to corporate entities and special purpose vehicles
(SPVs).
o Also include the fair value of publicly traded and not publicly traded equity exposures
and equity exposures to investment funds (including mutual funds) reported in
Schedule RC, item 5, to the extent that the aggregate carrying value of the bank’s
equity exposures does not exceed 10 percent of total capital. If the bank’s aggregate
carrying value of equity exposures is greater than 10 percent of total capital, the bank
must report its trading equity exposures in columns L, M, or N, as appropriate.
o Also include the fair value of trading assets reported in Schedule RC, item 5, that is
not included in columns C through H, J through N, and R. Exclude those trading
assets reported in Schedule RC, item 5, that qualify as securitization exposures and
report them in Schedule RC-R, Part II, item 9.c.
o Also include the portion of the fair value of any trading assets that is secured by
collateral or has a guarantee that qualifies for the 100 percent risk weight.
•
In column J–150% risk weight, include:
o The exposure amounts of trading assets reported in Schedule RC, item 5, that are
past due 90 days or more or in nonaccrual status (except sovereign exposures),
excluding those portions that are covered by qualifying collateral or eligible
guarantees as described in §.37 and §.36, respectively, of the regulatory capital
rules.
o The fair value of high volatility commercial real estate exposures, as defined in §.2 of
the regulatory capital rules, included in Schedule RC, item 5, excluding those
portions that are covered by qualifying collateral or eligible guarantees as described
in §.37 and §.36, respectively, of the regulatory capital rules.
RC-R-77
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
7
(cont.)
•
In column L–300% risk weight, include the portion of the amount reported in
Schedule RC, item 5, that does not qualify as securitization exposures that represents
the fair value of publicly traded equity securities with readily determinable fair values.
•
In column M–400% risk weight, include the portion of the amount reported in
Schedule RC, item 5, that does not qualify as securitization exposures that represents
the fair value of equity securities (other than those issued by investment firms) that do not
have readily determinable fair values.
•
In column N–600% risk weight, include the portion of the amount reported in
Schedule RC, item 5, that does not qualify as securitization exposures that represents
the fair value of equity exposures to investment firms.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include:
○ The portion of any trading assets reported in Schedule RC, item 5, that is secured by
qualifying financial collateral that meets the definition of a securitization exposure in
§.2 of the regulatory capital rules or is a mutual fund only if the bank chooses to
recognize the risk-mitigating effects of the securitization exposure or mutual fund
collateral under the Simple Approach outlined in §.37 of the regulatory capital rules.
Under the Simple Approach, the risk weight assigned to the collateralized portion of
the exposure may not be less than 20 percent.
o Equity exposures to investment funds (including mutual funds) reported as trading
assets in Schedule RC, item 5, if the aggregate carrying value of the bank’s equity
exposures is greater than 10 percent of total capital. These exposures are subject to
a minimum risk weight of 20 percent.
o For information on the reporting of such trading assets in columns R and S, refer to
the instructions for Schedule RC-R, Part, II, item 7, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
•
For trading assets that must be risk-weighted according to the Country Risk Classification
(CRC) methodology, assign these assets to risk-weight categories based on the CRC
methodology described in the General Instructions for Schedule RC-R, Part II, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
8
All other assets. Report in column A the sum of the amounts reported in Schedule RC,
item 6, "Premises and fixed assets”; item 7, "Other real estate owned”; item 8, "Investments
in unconsolidated subsidiaries and associated companies”; item 9, “Direct and indirect
investments in real estate ventures”; item 10, "Intangible assets"; and item 11, "Other assets,"
excluding those assets reported in Schedule RC, items 6 through 11, that qualify as
securitization exposures as defined in §.2 of the regulatory capital rules. The amount of
those assets reported in Schedule RC, items 6 through 11, that qualify as securitization
exposures (as well as the amount reported in Schedule RC, item 11, for accrued interest
receivable on on-balance sheet securitization exposures, regardless of where the
securitization exposures are reported on the balance sheet in Schedule RC) must be
reported in Schedule RC-R, Part II, item 9.d, column A.
The sum of item 8, columns B through R (including items 8.a and 8.b, column R), must equal
item 8, column A. Amounts reported in Schedule RC-R, Part II, items 8.a and 8.b, column R,
should not also be reported in Schedule RC-R, Part II, item 8, column R.
FFIEC 051
RC-R-78
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
Treatment of Defined Benefit Postretirement Plan Assets – Applicable Only to Banks That
Have Made the Accumulated Other Comprehensive Income (AOCI) Opt-Out Election in
Schedule RC-R, Part I, item 3.a
If the reporting institution sponsors a single-employer defined benefit postretirement plan,
such as a pension plan or health care plan, accounted for in accordance with ASC Topic 715,
Compensation-Retirement Benefits (formerly FASB Statement No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans”), the institution
should adjust the asset amount reported in column A of this item for any amounts included in
Schedule RC, item 26.b, “Accumulated other comprehensive income,” affecting assets as a
result of the initial and subsequent application of the funded status and measurement date
provisions of ASC Topic 715. The adjustment also should take into account subsequent
amortization of these amounts from AOCI into earnings. The intent of the adjustment
reported in this item (together with the amount reported in Schedule RC-R, Part I, item 9.d) is
to reverse the effects on AOCI of applying ASC Topic 715 for regulatory capital purposes.
Specifically, assets recognized or derecognized as an adjustment to AOCI as part of the
incremental effect of applying ASC Topic 715 should be reported as an adjustment to assets
in column B of this item. For example, the derecognition of an asset recorded as an offset to
AOCI as part of the initial incremental effect of applying ASC Topic 715 should be reported in
this item as a negative amount in column B and as a positive amount in column I. As another
example, the portion of a benefit plan surplus asset that is included in Schedule RC,
item 26.b, as an increase to AOCI and in column A of this item should be excluded from
risk-weighted assets by reporting the amount as a positive number in column B of this item.
•
FFIEC 051
In column B, include the amount of:
o Any goodwill reported in Schedule RC-M, item 2.b, without regard to any associated
DTLs;
o Intangible assets (other than goodwill and mortgage servicing assets (MSAs))
reported as a deduction from common equity tier 1 capital in Schedule RC-R, Part I,
item 7, without regard to any associated DTLs;
o Deferred tax assets (DTAs) that arise from net operating loss and tax credit
carryforwards, net of any related valuation allowances and net of DTLs reported in
Schedule RC-R, Part I, item 8;
o The fair value of over-the-counter derivative contracts (as defined in §.2 of the
regulatory capital rules) and derivative contracts that are cleared transactions (as
described in §.2 of the regulatory capital rules) that are reported as assets in
Schedule RC, item 11 (banks should risk weight the credit equivalent amount of
these derivative contracts in Schedule RC-R, Part II, item 20 or 21, as appropriate);
Note: The fair value of derivative contracts reported as assets in Schedule RC,
item 11, that are neither over-the-counter derivative contracts nor derivative
contracts that are cleared transactions under §.2 of the regulatory capital rules
should not be reported in column B. Such derivative contracts include written
option contracts, including so-called “derivative loan commitments,” i.e., a
lender’s commitment to originate a mortgage loan that will be held for resale.
The fair value of such derivative contracts should be reported in the appropriate
risk-weight category in this item 8.
o Investments in the capital of unconsolidated financial institutions that are reported
in Schedule RC, item 8 or item 11, and have been deducted from capital in
Schedule RC-R, Part I, item 13, item 24, and item 45.
RC-R-79
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
8
(cont.)
o
Items subject to the 25 percent common equity tier 1 capital threshold limitations
that have been deducted for risk-based capital purposes in Schedule RC-R, Part I,
items 13 through 15. These excess amounts pertain to three items:
Investments in the capital of unconsolidated financial institutions;
▪ MSAs; and
▪ DTAs arising from temporary differences that could not be realized through net
operating loss carrybacks, net of related valuation allowances; and
Unsettled transactions (failed trades) that are reported as “Other assets” in
Schedule RC, item 11. For purposes of risk weighting, unsettled transactions are to
be reported in Schedule RC-R, Part II, item 22.
An institution that has adopted the current expected credit losses methodology (CECL)
should report as a negative number in column B:
o The portion of Schedule RI-B, Part II, Memorandum item 6, “Allowance for credit
losses on other financial assets measured at amortized cost,” that relates to assets
reported in column A of this item, less
o The portion of Schedule RC-R, Part II, Memorandum item 4.c, “Amount of allowances
for credit losses on purchased credit-deteriorated assets” for other financial assets
measured at amortized cost that relates to assets reported in column A of this item.
For example, if an institution reports $100 in Schedule RI-B, Part II, Memorandum item 6
(and the entire amount relates to assets reported in this item 8, column A), and $10 in
Schedule RC-R, Part II, Memorandum item 4.c (and the entire amount relates to assets
reported in this item 8, column A), the institution would report ($90) in this column B.
An institution that has adopted CECL and has elected to apply the 3-year CECL transition
provision (3-year CECL electing institution) should report as a positive number in
column B its applicable DTA transitional amount from temporary difference DTAs, in
accordance with section 301 of the regulatory capital rules. Specifically, a 3-year CECL
electing institution reduces its temporary difference DTAs by 75 percent of its DTA
transitional amount during the first year of the transition period, 50 percent of its DTA
transitional amount during the second year of the transition period, and 25 percent of its
DTA transitional amount during the third year of the transition period.
Report as a negative number in column B the amount of default fund contributions in the
form of commitments made by a clearing member to a central counterparty’s mutualized
loss-sharing arrangement.
•
FFIEC 051
In column C–0% risk weight, include:
○ The carrying value of Federal Reserve Bank stock included in Schedule RC-F,
item 4;
o Accrued interest receivable on assets included in the zero percent risk weight
category (column C of Schedule RC-R, Part II, items 1 through 7);
o The carrying value of gold bullion not held for trading that is held in the bank's own
vault or in another bank's vault on an allocated basis, and exposures that arise from
the settlement of cash transactions (such as equities, fixed income, spot foreign
exchange, and spot commodities) with a central counterparty where there is no
assumption of ongoing credit risk by the central counterparty after settlement of the
trade and associated default fund contributions; and
○ The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the zero percent risk weight. This
would include the portion of these assets collateralized by deposits in the reporting
institution.
RC-R-80
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
•
In column G–20% risk weight, include:
○ The carrying value of Federal Home Loan Bank stock included in Schedule RC-F,
item 4;
o Accrued interest receivable on assets included in the 20 percent risk weight category
(column G of Schedule RC-R, Part II, items 1 through 7);
o The portion of customers' acceptance liability reported in Schedule RC, item 11, that
has been participated to other depository institutions; and
o The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the 20 percent risk weight. This would
include the portion of these assets covered by FDIC loss-sharing agreements.
•
In column H–50% risk weight, include accrued interest receivable on assets included
in the 50 percent risk weight category (column H of Schedule RC-R, Part II, items 1
through 7). Also include the portion of assets reported in Schedule RC, items 6 through
11, that is secured by collateral or has a guarantee that qualifies for the 50 percent risk
weight.
•
In column I–100% risk weight, include:
o Accrued interest receivable on assets included in the 100 percent risk weight
category (column I of Schedule RC-R, Part II, items 1 through 7);
o Publicly traded and not publicly traded equity exposures, equity exposures without
readily determinable fair values, and equity exposures to investment funds, to the
extent that the aggregate carrying value of the bank’s equity exposures does not
exceed 10 percent of total capital. If the bank’s aggregate carrying value of equity
exposures is greater than 10 percent of total capital, the bank must report its equity
exposures reported in Schedule RC, items 6 through 11, in either columns L, M, or N,
as appropriate;
○ The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the 100 percent risk weight; and
o The amount of all other assets reported in column A that is not included in columns C
through H, J through N, or R;
•
In column J–150% risk weight, include accrued interest receivable on assets included in
the 150 percent risk weight category (column J of Schedule RC-R, Part II, items 1
through 7). Also include the portion of assets reported in Schedule RC, items 6 through
11, that is secured by collateral or has a guarantee that qualifies for the 150 percent risk
weight.
•
In column K–250% risk weight, include the amounts of
o MSAs, and
o DTAs arising from temporary differences that could not be realized through net
operating loss carrybacks, net of related valuation allowances,
that do not exceed the common equity tier 1 capital deduction thresholds and are
included in capital, as described in §.22 of the regulatory capital rules.
•
In column L–300% risk weight, include the fair value of publicly traded equity securities
with readily determinable fair values that are reported in Schedule RC, items 8 and 9.
•
In column M–400% risk weight, include the historical cost of equity securities (other than
those issued by investment firms) that do not have readily determinable fair values that
are reported in Schedule RC-F, item 4.
FFIEC 051
RC-R-81
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
•
In column N–600% risk weight, include the historical cost of equity securities issued by
investment firms that do not have readily determinable fair values that are reported in
Schedule RC-F, item 4.
•
In columns R and S of item 8–Application of Other Risk-Weighting Approaches, include:
o The portion of any asset reported in Schedule RC, items 6 through 11 (except
separate account bank-owned life insurance and default fund contributions to central
counterparties, which are to be reported in columns R and S of items 8.a and 8.b,
respectively), that is secured by qualifying financial collateral that meets the definition
of a securitization exposure in §.2 of the regulatory capital rules or is a mutual fund
only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure or mutual fund collateral under the Simple Approach outlined in §.37 of the
regulatory capital rules. Under the Simple Approach, the risk weight assigned to the
collateralized portion of the exposure may not be less than 20 percent.
o Equity exposures to investment funds (including mutual funds) reported in
Schedule RC, item 8 or 11 (except separate account bank-owned life insurance and
default fund contributions to central counterparties, which are to be reported in
columns R and S of items 8.a and 8.b, respectively), if the aggregate carrying value
of the bank’s equity exposures is greater than 10 percent of total capital. These
exposures are subject to a minimum risk weight of 20 percent.
o For information on the reporting of such assets in columns R and S, refer to the
instructions for Schedule RC-R, Part, II, item 8, in the instructions for the FFIEC 031
and FFIEC 041 Call Reports.
•
In columns R and S of item 8.a—Separate Account Bank-Owned Life Insurance, include
the bank’s investments in separate account life insurance products, including hybrid
separate account life insurance products. Exclude from columns R and S any investment
in bank-owned life insurance that is solely a general account insurance product (report
such general account insurance products in column I—100 percent risk weight). Report
in column R the carrying value of the bank’s investments in separate account life
insurance products, including hybrid separate account products. Report in column S the
risk-weighted asset amount of these insurance products. When a bank has a separate
account policy, the portion of the carrying value that represents general account claims
on the insurer, including items such as deferred acquisition costs (DAC) and mortality
reserves realizable as of the balance sheet date, and any portion of the carrying value
attributable to a Stable Value Protection (SVP) contract should be risk weighted at the
100 percent risk weight as claims on the insurer or the SVP provider. The remaining
portion of the investment in separate account life insurance products is an equity
exposure to an investment fund that should be measured under the full look-through
approach, the simple modified look-through approach, or the alternative modified lookthrough approach, all three of which require a minimum risk weight of 20 percent. For
further information, refer to the discussion of “Treatment of Equity Exposures” in the
General Instructions for Schedule RC-R, Part II.
•
In columns R and S of item 8.b—Default Fund Contributions to Central Counterparties
Note: Item 8.b only applies to banks that are clearing members, and therefore will not be
applicable to the vast majority of banks. Banks must report the aggregate on-balance
sheet amount of default fund contributions to central counterparties (CCPs) in column A.
Banks must report the aggregate off-balance sheet amount, if any, of default fund
contributions to CCPs as a negative amount in column B of item 8. For information on
FFIEC 051
RC-R-82
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
the reporting of default fund contributions to central counterparties in columns R and S,
refer to the instructions for Schedule RC-R, Part II, item 8, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
•
For the portions of those exposures described above in the instructions for
Schedule RC-R, Part II, item 8, that are exposures to sovereigns or foreign banks
reported in Schedule RC, items 6 through 11, that must be risk-weighted according to the
Country Risk Classification (CRC) methodology, assign these exposures to risk-weight
categories based on the CRC methodology described in the General Instructions for
Schedule RC-R, Part II, and the instructions for Schedule RC-R, Part, II, item 8, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Securitization Exposures: On- and Off-Balance Sheet
NOTE: Schedule RC-R, Part II, items 9.a through 10, columns A, B, Q, T, and U, are to be completed
semiannually in the June and December reports only.
9
On-balance sheet securitization exposures. When determining the amount of riskweighted assets for securitization exposures, banks that are not subject to the market risk
capital rule may elect to use either the Simplified Supervisory Formula Approach (SSFA) or
the Gross-Up Approach, as described above and in §.41 to §.45 of the regulatory capital
rules. However, such banks must use the SSFA or Gross-Up Approach consistently across
all securitization exposures (items 9.a through 10), but banks may risk weight any individual
securitization exposure at 1,250 percent in lieu of applying the SSFA or Gross-Up Approach
to that individual exposure.
Banks subject to the market risk capital rule must use the SSFA when determining the
amount of risk-weighted assets for securitization exposures.
For further information, refer to the discussion of “Risk-Weighted Assets for Securitization
Exposures” in the General Instructions for Schedule RC-R, Part II.
9.a
Held-to-maturity securities. Report in column A the amount of held-to-maturity (HTM)
securities reported in Schedule RC, item 2.a, that qualify as securitization exposures as
defined in §.2 of the regulatory capital rules. Refer to the instructions for Schedule RC-R,
Part II, item 2.a, for a summary of the reporting locations of HTM securitization exposures.
Exposure amount to be used for purposes of risk weighting – bank has not made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R,
Part I, item 3.a:
For a security classified as HTM where the bank has not made the AOCI opt-out election
(i.e., most AOCI is included in regulatory capital), the exposure amount to be risk weighted by
the bank is the carrying value of the security, which is the value of the asset reported on the
balance sheet of the bank determined in accordance with GAAP and in column A.
Exposure amount to be used for purposes of risk weighting – bank has made the AOCI
opt-out election in Schedule RC-R, Part I, item 3.a:
For a security classified as HTM where the bank has made the AOCI opt-out election (i.e.,
most AOCI is not included in regulatory capital), the exposure amount to be risk weighted by
the bank is the carrying value of the security reported on the balance sheet of the bank and in
column A, less any unrealized gain on the exposure or plus any unrealized loss on the
exposure included in AOCI.
If an HTM securitization exposure will be risk weighted using either the Simplified Supervisory
Formula Approach (SSFA) or the Gross-Up Approach, include as part of the exposure
amount to be risk weighted in this item any accrued interest receivable on the HTM security
FFIEC 051
RC-R-83
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.a
(cont.)
that is reported in Schedule RC, item 11, “Other assets,” and included in Schedule RC-R,
Part II, item 9.d, columns A and B. Do not report this accrued interest receivable in column A
or B of this item.
9.b
•
In column B:
○ If an HTM securitization exposure will be risk weighted using the 1,250 percent risk
weight approach, report any difference between the carrying value of the HTM
securitization exposure reported in column A of this item and the exposure amount of
the HTM securitization exposure that is to be risk weighted.
o If an HTM securitization exposure will be risk weighted using either the SSFA or the
Gross-Up Approach, report the carrying value of the HTM securitization exposure
reported in column A of this item.
o For an institution that has adopted the current expected credit losses methodology
(CECL), include as a negative number:
The portion of Schedule RI-B, Part II, item 7, column B, “Balance end of current
period” for HTM debt securities that relates to HTM securitization exposures, less
The portion of Schedule RC-R, Part II, Memorandum item 4.b, “Amount of
allowances for credit losses on purchased credit-deteriorated assets” for HTM
debt securities that relates to purchased credit-deteriorated HTM securitization
exposures.
For example, if an institution reports $100 in Schedule RI-B, Part II, item 7, column B,
that relates to HTM securitization exposures and $10 in Schedule RC-R, Part II,
Memorandum item 4.b that relates to purchased credit-deteriorated HTM
securitization exposures, the institution would report ($90) in this column B.
•
In column Q, report the exposure amount of those HTM securitization exposures that are
assigned a 1,250 percent risk weight (i.e., those HTM securitization exposures for which
the risk-weighted asset amount is not calculated using the SSFA or the Gross-Up
Approach).
•
In column T, report the risk-weighted asset amount (not the exposure amount) of those
HTM securitization exposures for which the risk-weighted asset amount is calculated
using the SSFA, as described above in the General Instructions for Schedule RC-R,
Part II, and in §.41 to §.45 of the regulatory capital rules.
•
In column U, report the risk-weighted asset amount (not the exposure amount) of HTM
securitization exposures for which the risk-weighted asset amount is calculated using the
Gross-Up Approach, as described above in the General Instructions for Schedule RC-R,
Part II, and in §.41 to §.45 of the regulatory capital rules.
Available-for-sale securities. Report in column A the fair value of those available-for-sale
(AFS) securities reported in Schedule RC, item 2.b, that qualify as securitization exposures
as defined in §.2 of the regulatory capital rules. Refer to the instructions for Schedule RC-R,
Part II, item 2.b, for a summary of the reporting locations of AFS securitization exposures.
Exposure amount to be used for purposes of risk weighting – bank that has not made the
Accumulated Other Comprehensive Income (AOCI) opt-out election in Schedule RC-R,
Part I, item 3.a:
For an AFS debt security that is a securitization exposure where the bank has not made the
AOCI opt-out election (i.e., most AOCI is included in regulatory capital), the exposure amount
of the AFS securitization exposure to be risk weighted by the bank is the carrying value of the
debt security, which is the value of the asset reported on the balance sheet of the bank
(Schedule RC, item 2.b) determined in accordance with GAAP (i.e., the fair value of the AFS
debt security) and in column A of this item.
FFIEC 051
RC-R-84
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.b
(cont.)
Exposure amount to be used for purposes of risk weighting – bank has made the AOCI
opt-out election in Schedule RC-R, Part I, item 3.a:
For an AFS debt security that is a securitization exposure where the bank has made the
AOCI opt-out election (i.e., most AOCI is not included in regulatory capital), the exposure
amount of the AFS securitization exposure to be risk weighted by the bank is the carrying
value of the debt security, less any unrealized gain on the exposure or plus any unrealized
loss on the exposure included in AOCI.
If an AFS securitization exposure will be risk weighted using either the Simplified Supervisory
Formula Approach (SSFA) or the Gross-Up Approach, include as part of the exposure
amount to be risk weighted in this item any accrued interest receivable on the AFS debt
security that is reported in Schedule RC, item 11, “Other assets,” and included in
Schedule RC-R, Part II, item 9.d, columns A and B. Do not report this accrued interest
receivable in column A or B of this item.
FFIEC 051
•
In column B:
○ If an AFS securitization exposure will be risk weighted using the 1,250 percent risk
weight approach, a bank that has made the AOCI opt-out election should include
the difference between the fair value and amortized cost of those AFS debt securities
that qualify as securitization exposures. This difference equals the amounts reported
in Schedule RC-B, items 4 and 5, column D, minus items 4 and 5, column C, for
those AFS debt securities included in these items that are securitization exposures.
When fair value exceeds cost, report the difference as a positive number in
Schedule RC-R, Part II, item 9.b, column B. When cost exceeds fair value, report the
difference as a negative number (i.e., with a minus (-) sign) in Schedule RC-R,
Part II, item 9.b, column B.
o If an AFS securitization exposure will be risk weighted using either the SSFA or the
Gross-Up Approach, a bank should report the carrying value of the AFS securitization
exposure reported in column A of this item.
•
In column Q, report the exposure amount of those AFS securitization exposures that are
assigned a 1,250 percent risk weight (i.e., those AFS securitization exposures for which
the risk-weighted asset amount is not calculated using the SSFA or the Gross-Up
Approach).
RC-R-84a
(3-19)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.b
(cont.)
•
In column T, report the risk-weighted asset amount (not the exposure amount) of those
AFS securitization exposures for which the risk-weighted asset amount is calculated
using the SSFA, as described above in the General Instructions for Schedule RC-R,
Part II, and in §.41 to §.45 of the regulatory capital rules.
•
In column U, report the risk-weighted asset amount (not the exposure amount) of those
AFS securitization exposures for which the risk-weighted asset amount is calculated
using the Gross-Up Approach, as described above in the General Instructions for
Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
Example 1: A bank reports an AFS securitization exposure on its balance sheet in
Schedule RC, item 2.b, at a carrying value (i.e., fair value) of $105. The amortized cost of
the AFS securitization exposure is $100. The AFS securitization exposure has a $5
unrealized gain that is included in AOCI. The AFS securitization exposure also has $1 of
accrued interest receivable that is reported in Schedule RC, item 11, and included in
Schedule RC-R, Part II, item 9.d, column A. The bank has made the AOCI opt-out election in
Schedule RC-R, Part I, item 3.a. The AFS securitization exposure will be risk weighted using
the 1,250 percent risk weight approach. The bank would report in Schedule RC-R, Part II,
item 9.b:
• $105 in column A. This is the carrying value of the AFS securitization exposure on
the bank’s balance sheet.
• $5 in column B. This is the difference between the carrying value (i.e., fair value) of
the AFS securitization exposure and its exposure amount that is subject to risk
weighting. For a bank that has made the AOCI opt-out election, column B will
typically represent the amount of the unrealized gain or unrealized loss on
securitization exposure. Gains are reported as positive numbers; losses as negative
numbers. (Note: If the bank has not made or cannot make the opt-out election, there
will not be an adjustment for the unrealized gain or loss to be reported in column B.)
• $100 is the exposure amount subject to risk weighting in this item (i.e., without regard
to the accrued interest receivable on the AFS securitization exposure that is included
in Schedule RC-R, Part II, item 9.d). This $100 amount will be reported in item 9.b,
column Q–1250% risk weight. For a bank that has made the AOCI opt-out election,
the exposure amount typically will be the carrying value (i.e., fair value) of the AFS
securitization exposure excluding any unrealized gain or loss.
The bank would also report the $1 of accrued interest receivable on the AFS securitization
exposure that is included in Schedule RC-R, Part II, item 9.d, column A, in column Q–1250%
risk weight of item 9.d.
Example 2: A bank reports an AFS securitization exposure on its balance sheet in
Schedule RC, item 2.b, at a carrying value (i.e., fair value) of $105. The AFS securitization
exposure has a $5 unrealized gain that is included in AOCI. The AFS securitization exposure
also has $1 of accrued interest receivable that is reported in Schedule RC, item 11, and
included in Schedule RC-R, Part II, item 9.d, column A. The bank’s AFS securitization
exposure provides credit enhancement for an additional $800 in more senior securities.
Therefore, the bank will need to risk weight a $900 exposure composed of the carrying value
of its AFS securitization exposure, less the unrealized gain, plus the amount of the more
senior exposures that it supports. The bank has made the AOCI opt-out election in
Schedule RC-R, Part I, item 3.a. The AFS securitization exposure will be risk weighted using
the Gross-Up Approach and the weighted-average risk weight of the underlying exposures is
100 percent. The bank would report in Schedule RC-R, Part II, item 9.b:
• $105 in column A. This is the carrying value of the AFS securitization exposure on
the bank’s balance sheet.
FFIEC 051
RC-R-85
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.b
(cont.)
•
9.c
$105 in column B. When the Gross-Up Approach is being used, the carrying value of the
AFS securitization exposure on the bank’s balance sheet, as reported in column A, of
item 9.b, is to be reported in column B. Because the bank has made the AOCI opt-out
election, the exposure amount to be risk weighted at the 100 percent weighted-average
risk weight is the $105 carrying value of the AFS securitization exposure, less the $5
unrealized gain on the exposure included in AOCI, plus the $1 accrued interest
receivable on the exposure (included in Schedule RC-R, Part II, item 9.d, column A), plus
the additional $800 in more senior exposures that the AFS securitization exposure
supports, which equals $901.
• $901 in column U. This is the risk-weighted asset amount of the AFS securitization
exposure. This amount ($901) will be reported in item 9.b, column U—Gross-Up.
(Note: $901 is the product of the $901 exposure amount multiplied by the 100
percent weighted-average risk weight.)
Trading assets. Report in column A the fair value of those trading assets reported in
Schedule RC, item 5, that qualify as securitization exposures as defined in §.2 of the
regulatory capital rules.
If the bank is subject to the market risk capital rule, report in column B the fair value of those
securitization exposures reported in column A of this item that are covered positions as
defined in Schedule RC-R, Part II, item 27. The bank will report its standardized market
risk-weighted assets in Schedule RC-R, Part II, item 27. For further information on the
market risk capital rule and the meaning of the term “covered position,” refer to the discussion
of “Banks That Are Subject to the Market Risk Capital Rule” in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
If a trading asset securitization exposure will be risk weighted using either the Simplified
Supervisory Formula Approach (SSFA) or the Gross-Up Approach, include as part of the
exposure amount to be risk weighted in this item any accrued interest receivable on the
trading asset that is reported in Schedule RC, item 11, “Other assets,” and included in
Schedule RC-R, Part II, item 9.d, columns A and B. Do not report this accrued interest
receivable in column A or B of this item.
For banks not subject to the market risk capital rule and for those trading assets held by
banks subject to the market risk capital rule that are securitization exposures that do not meet
the definition of a covered position:
FFIEC 051
•
In column B, report the fair value reported in column A of this item for those trading
assets reported in Schedule RC, item 5, that qualify as securitization exposures and will
be risk-weighted using either the SSFA or the Gross-Up Approach.
•
In column Q, report the fair value reported in column A of this item of those trading assets
that are securitization exposures that are assigned a 1,250 percent risk weight (i.e., those
trading asset securitization exposures for which the risk-weighted asset amount is not
calculated using the SSFA or the Gross-Up Approach).
•
In column T, report the risk-weighted asset amount (not the exposure amount) of those
trading assets that are securitization exposures for which the risk-weighted asset amount
is calculated using the SSFA, as described above in the General Instructions for
Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
RC-R-86
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.c
(cont.)
•
9.d
In column U, report the risk-weighted asset amount (not the exposure amount) of those
trading assets that are securitization exposures for which the risk-weighted asset amount
is calculated using the Gross-Up Approach, as described above in the General
Instructions for Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
All other on-balance sheet securitization exposures. Report in column A the amount of
all on-balance sheet assets included in Schedule RC that qualify as securitization exposures
as defined in §.2 of the regulatory capital rules and are not reported in Schedule RC-R,
Part II, items 9.a, 9.b, or 9.c. Include in column A the amount reported in Schedule RC,
item 11, “Other assets,” for accrued interest receivable on on-balance sheet securitization
exposures, regardless of where the securitization exposures are reported on the balance
sheet in Schedule RC. Refer to the instructions for Schedule RC-R, Part II, items 1, 3, 4, 5,
and 8, above for a summary of the reporting locations of other on-balance sheet
securitization exposures.
Exposure amount to be used for purposes of risk weighting – bank that has not made the
AOCI opt-out election in Schedule RC-R, Part I, item 3.a:
For other on-balance sheet securitization exposures where the bank has not made the AOCI
opt-out election (i.e., most AOCI is included in regulatory capital), the exposure amount to be
risk weighted by the bank is the exposure’s carrying value, which is the value of the exposure
reported on the balance sheet of the bank determined in accordance with GAAP and in
column A.
Exposure amount to be used for purposes of risk weighting – bank has made the AOCI
opt-out election in Schedule RC-R, Part I, item 3.a:
For other on-balance sheet securitization exposures where the bank has made the AOCI optout election (i.e., most AOCI is not included in regulatory capital), the exposure amount to be
risk weighted by the bank is the exposure’s carrying value, less any unrealized gain on the
exposure or plus any unrealized loss on the exposure included in AOCI. In column B, report
any difference between the carrying value and the exposure amount of those other onbalance sheet securitization exposures reported in column A of this item that will be risk
weighted by applying the 1,250 percent risk weight.
FFIEC 051
•
In column B, all banks should include the amount reported in column A of this item for
those other on-balance sheet securitization exposures that will be risk weighted using
either the Simplified Supervisory Formula Approach (SSFA) or the Gross-Up Approach,
including any accrued interest receivable reported in column A that has been accrued on
these other on-balance sheet securitization exposures. Also include in column B any
accrued interest receivable reported in column A that has been accrued on securitization
exposures reported as held-to-maturity securities, available-for-sale securities, and
trading assets in Schedule RC-R, Part II, items 9.a, 9.b, and 9.c, respectively.
•
In column Q, report the exposure amount of those other on-balance sheet securitization
exposures that are assigned a 1,250 percent risk weight (i.e., those other on-balance
sheet securitization exposures for which the risk-weighted asset amount is not calculated
using the SSFA or the Gross-Up Approach), including any accrued interest receivable
reported in column A that has been accrued on these other on-balance sheet
securitization exposures. Also include in column Q any accrued interest receivable
reported in column A that has been accrued on securitization exposures reported as
held-to-maturity securities, available-for-sale securities, and trading assets in
Schedule RC-R, Part II, items 9.a, 9.b, and 9.c, respectively, that are assigned a 1,250
percent risk weight.
RC-R-87
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
9.d
(cont.)
•
In column T, report the risk-weighted asset amount (not the exposure amount) of those
other on-balance sheet securitization exposures for which the risk-weighted asset
amount is calculated using the SSFA, as described above in the General Instructions for
Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
•
In column U, report the risk-weighted asset amount (not the exposure amount) of those
other on-balance sheet securitization exposures for which the risk-weighted asset
amount is calculated using the Gross-Up Approach, as described above in the General
Instructions for Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
10
Off-balance sheet securitization exposures. Report in column A the notional amount of all
derivatives and off-balance sheet items reported in Schedule RC-L or Schedule SU that
qualify as securitization exposures as defined in §.2 of the regulatory capital rules. Refer to
the instructions for Schedule RC-R, Part II, items 12 through 21, for a summary of the
reporting locations of off-balance sheet securitization exposures.
Exposure amount to be used for purposes of risk weighting
For an off-balance sheet securitization exposure that is not a repo-style transaction or eligible
margin loan for which the bank calculates an exposure amount under §.37 of the regulatory
capital rules, cleared transaction (other than a credit derivative), or over-the-counter (OTC)
derivative contract (other than a credit derivative), the exposure amount is the notional
amount of the exposure.
For an off-balance sheet securitization exposure to an asset-backed commercial paper
(ABCP) program, such as an eligible ABCP liquidity facility, the notional amount may be
reduced to the maximum potential amount that the bank could be required to fund given the
ABCP program’s current underlying assets (calculated without regard to the current credit
quality of those assets).
The exposure amount of an eligible ABCP liquidity facility for which the Simplified
Supervisory Formula Approach (SSFA) does not apply is equal to the notional amount of the
exposure multiplied by a credit conversion factor (CCF) of 50 percent.
The exposure amount of an eligible ABCP liquidity facility for which the SSFA applies is equal
to the notional amount of the exposure multiplied by a CCF of 100 percent.
For an off-balance sheet securitization exposure that is a repo-style transaction or eligible
margin loan for which the bank calculates an exposure amount under §.37 of the regulatory
capital rules, a cleared transaction (other than a credit derivative), or a derivative contract
(other than a credit derivative), the exposure amount is the amount calculated under §.34,
§.35, §.37, §.132, or §.133, as applicable, of the regulatory capital rules.
For a credit-enhancing representation and warranty that is an off-balance sheet securitization
exposure, see the discussion of “Treatment of Sales of 1-4 Family Residential First Mortgage
Loans with Credit-Enhancing Representations and Warranties,” which includes an example,
in the General Instructions for Schedule RC-R, Part II.
•
FFIEC 051
In column B, report the notional amount of those off-balance sheet securitization
exposures reported in column A of this item for which the exposure amount (as described
above) will be risk weighted using either the SSFA or the Gross-Up Approach. Also
include in column B the difference between the notional amount reported in column A of
RC-R-88
(3-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
10
(cont.)
this item and the exposure amount for those off-balance sheet items that qualify as
securitization exposures and will be risk weighted by applying the 1,250 percent risk
weight.
•
In column Q, report the exposure amount of those off-balance sheet securitization
exposures that are assigned a 1,250 percent risk weight (i.e., those off-balance sheet
securitization exposures for which the risk-weighted asset amount is not calculated using
the SSFA or the Gross-Up Approach).
•
In column T, report the risk-weighted asset amount (not the exposure amount) of those
off-balance sheet securitization exposures for which the risk-weighted asset amount is
calculated using the SSFA, as described above in the General Instructions for
Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
•
In column U, report the risk-weighted asset amount (not the exposure amount) of those
off-balance sheet securitization exposures for which the risk-weighted asset amount is
calculated using the Gross-Up Approach, as described above in the General Instructions
for Schedule RC-R, Part II, and in §.41 to §.45 of the regulatory capital rules.
Total Assets
NOTE: Schedule RC-R, Part II, item 11, columns A through R, are to be completed semiannually in the
June and December reports only.
11
FFIEC 051
Total assets. For columns A through R, report the sum of items 1 through 9. The sum of
columns B through R must equal column A. Schedule RC-R, Part II, item 11, column A, must
equal Schedule RC, item 12, “Total assets.”
RC-R-89
(3-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Derivatives, Off-Balance Sheet Items, and Other Items Subject to Risk Weighting (Excluding
Securitization Exposures)
Treatment of Derivatives and Off-Balance Sheet Items that are Securitization Exposures – Any
derivatives or off-balance sheet items reported in Schedule RC-L or Schedule SU that qualify as
securitization exposures, including liquidity facilities to asset-backed commercial paper programs, are to
be reported in Schedule RC-R, Part II, item 10, column A, and excluded from Schedule RC-R, Part II,
items 12 through 21 below.
Repo-style Transactions – The regulatory capital rules permit some repo-style transactions to be risk
weighted on a netting set basis. Where netting is permitted, a bank will combine both on-balance and
off-balance sheet repo-style transactions in order to determine a capital requirement for a netting set to
a single counterparty. In such cases, a bank should combine securities purchased under agreements to
resell (i.e., reverse repos) and securities sold under agreements to repurchase (i.e., repos) with
off-balance sheet repo-style transactions (i.e., securities borrowing and securities lending transactions)
in Schedule RC-R, Part II, item 16, and report the netting set exposure to each counterparty under the
appropriate risk weight column.
Credit Conversion Factors for Off-Balance Sheet Items – A summary of the credit conversion factors
(CCFs) by which the exposure amount of off-balance sheet items are to be multiplied follows. For further
information on these factors, refer to the regulatory capital rules.
Off-balance sheet items subject to a zero percent CCF:
(1) Unused portions of commitments that are unconditionally cancelable at any time by the bank.
Off-balance sheet items subject to a 20 percent CCF:
(1) Commercial and similar letters of credit with an original maturity of one year or less, including shortterm, self-liquidating, trade-related contingent items that arise from the movement of goods.
(2) Commitments with an original maturity of one year or less that are not unconditionally cancelable.
Off-balance sheet items subject to a 50 percent CCF:
(1) Transaction-related contingent items, including performance standby letters of credit, bid bonds,
performance bonds, and warranties.
(2) Commercial and similar letters of credit with an original maturity exceeding one year.
(3) Commitments with an original maturity exceeding one year that are not unconditionally cancelable by
the bank, including underwriting commitments and commercial credit lines.
Off-balance sheet items subject to a 100 CCF:
(1) Financial standby letters of credit.
(2) Repo-style transactions, including off-balance sheet securities lending transactions, off-balance sheet
securities borrowing transactions, securities purchased under agreements to resell, and securities
sold under agreements to repurchase.
(3) Guarantees, certain credit-enhancing representations and warranties, and forward agreements.
Item No.
Caption and Instructions
NOTE: Schedule RC-R, Part II, items 12 through 22, columns A through S, as applicable, are to be
completed semiannually in the June and December reports only.
12
Financial standby letters of credit. For financial standby letters of credit reported in
Schedule RC-L, item 2, that do not meet the definition of a securitization exposure as
described in §.2 of the regulatory capital rules, but are credit enhancements for assets, report
in column A:
(1) The amount outstanding and unused of those letters of credit for which this amount is less
than the effective risk-based capital requirement for the assets that are credit-enhanced
by the letter of credit multiplied by 12.5.
FFIEC 051
RC-R-90
(3-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
12
(cont.)
(2) The full amount of the assets that are credit-enhanced by those letters of credit that are
not multiplied by 12.5.
For all other financial standby letters of credit reported in Schedule RC-L, item 2, that do not
meet the definition of a securitization exposure, report in column A the amount outstanding
and unused of these letters of credit.
13
FFIEC 051
•
In column B, report 100 percent of the amount reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of the portion of
financial standby letters of credit reported in Schedule RC-L, item 2, that are secured by
collateral or has a guarantee that qualifies for the zero percent risk weight.
•
In column G–20% risk weight, include the credit equivalent amount of the portion of
financial standby letters of credit reported in Schedule RC-L, item 2, that has been
conveyed to U.S. depository institutions. Also include the credit equivalent amount of the
portion of financial standby letters of credit reported in Schedule RC-L, item 2, that are
secured by collateral or has a guarantee that qualifies for the 20 percent risk weight.
•
In column H–50% risk weight, include the credit equivalent amount of the portion of
financial standby letters of credit reported in Schedule RC-L, item 2, that are secured by
collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H and J. Also include the
credit equivalent amount of the portion of financial standby letters of credit reported in
Schedule RC-L, item 2, that are secured by collateral or has a guarantee that qualifies for
the 100 percent risk weight.
•
For financial standby letters of credit that must be risk weighted according to the Country
Risk Classification (CRC) methodology, including those conveyed to foreign banks,
assign the credit equivalent amount of the portion of such financial standby letters of
credit to risk-weight categories based on the CRC methodology described in the
instructions for Schedule RC-R, Part, II, item 12, in the instructions for the FFIEC 031 and
FFIEC 041 Call Reports.
Performance standby letters of credit and transaction-related contingent items. Report
in column A transaction-related contingent items, which includes the face amount of
performance standby letters of credit reported in Schedule RC-L, item 3, and any other
transaction-related contingent items that do not meet the definition of a securitization
exposure as described in §.2 of the regulatory capital rules.
•
In column B, report 50 percent of the face amount reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of the portion of
performance standby letters of credit and transaction-related contingent items reported in
Schedule RC-L, item 3, that are secured by collateral or has a guarantee that qualifies for
the zero percent risk weight.
•
In column G–20% risk weight, include the credit equivalent amount of the portion of
performance standby letters of credit, performance bids, bid bonds, and warranties
reported in Schedule RC-L, item 3, that have been conveyed to U.S. depository
RC-R-91
(3-17)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
13
(cont.)
14
FFIEC 051
institutions. Also include the credit equivalent amount of the portion of performance
standby letters of credit and transaction-related contingent items reported in
Schedule RC-L, item 3, that are secured by collateral or has a guarantee that qualifies for
the 20 percent risk weight.
•
In column H–50% risk weight, include the credit equivalent amount of the portion of
performance standby letters of credit and transaction-related contingent items reported in
Schedule RC-L, item 3, that are secured by collateral or has a guarantee that qualifies for
the 50 percent risk weight.
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H and J. Also include the
credit equivalent amount of the portion of performance standby letters of credit and
transaction-related contingent items reported in Schedule RC-L, item 3, that are secured
by collateral or has a guarantee that qualifies for the 100 percent risk weight.
•
For performance standby letters of credit and transaction-related contingent items that
must be risk weighted according to the Country Risk Classification (CRC) methodology,
including performance standby letters of credit, performance bids, bid bonds, and
warranties conveyed to foreign banks, assign the credit equivalent amount of the portion
of such performance standby letters of credit and transaction-related contingent items to
risk-weight categories based on the CRC methodology described in the instructions for
Schedule RC-R, Part, II, item 13, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
Commercial and similar letters of credit with an original maturity of one year or less.
Report in column A the face amount of those commercial and similar letters of credit,
including self-liquidating trade-related contingent items that arise from the movement of
goods, reported in Schedule RC-L, item 4, with an original maturity of one year or less that do
not meet the definition of a securitization exposure as described in §.2 of the regulatory
capital rules. Report those commercial letters of credit with an original maturity exceeding
one year that do not meet the definition of a securitization exposure in Schedule RC-R,
Part II, item 18.b.
•
In column B, report 20 percent of the face amount reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of the portion of
commercial or similar letters of credit with an original maturity of one year or less reported
in Schedule RC-L, item 4, that are secured by collateral or has a guarantee that qualifies
for the zero percent risk weight.
•
In column G–20% risk weight, include the credit equivalent amount of the portion of
commercial and similar letters of credit, including self-liquidating, trade-related contingent
items that arise from the movement of goods, with an original maturity of one year or
less, reported in Schedule RC-L, item 4, that have been conveyed to U.S. depository
institutions. Also include the credit equivalent amount of the portion of commercial or
similar letters of credit with an original maturity of one year or less reported in
Schedule RC-L, item 4, that are secured by collateral or has a guarantee that qualifies
for the 20 percent risk weight.
•
In column H–50% risk weight, include the credit equivalent amount of the portion of
commercial or similar letters of credit with an original maturity of one year or less reported
in Schedule RC-L, item 4, that are secured by collateral or has a guarantee that qualifies
for the 50 percent risk weight.
RC-R-92
(3-17)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
14
(cont.)
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H and J. Also include the
credit equivalent amount of the portion of commercial or similar letters of credit with an
original maturity of one year or less reported in Schedule RC-L, item 4, that are secured
by collateral or has a guarantee that qualifies for the 100 percent risk weight.
•
For commercial and similar letters of credit that must be risk weighted according to the
Country Risk Classification (CRC) methodology, including commercial and similar letters
of credit (and self-liquidating, trade-related contingent items that arise from the movement
of goods) with an original maturity of one year or less that have been conveyed to foreign
banks, assign the credit equivalent amount of the portion of such letters of credit to riskweight categories based on the CRC methodology described in the instructions for
Schedule RC-R, Part, II, item 14, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
15
Retained recourse on small business obligations sold with recourse. Report in
column A the amount of retained recourse on small business obligations reported in
Schedule SU, items 4 and 5, that do not meet the definition of a securitization exposure as
described in §.2 of the regulatory capital rules.
For retained recourse on small business obligations sold with recourse that qualify as
securitization exposures, please see §.42(h) of the regulatory capital rule for purposes of risk
weighting and report these exposures in Schedule RC-R, Part II, item 10.
Under Section 208 of the Riegle Community Development and Regulatory Improvement Act
of 1994, a "qualifying institution" that transfers small business loans and leases on personal
property (small business obligations) with recourse in a transaction that qualifies as a sale
under generally accepted accounting principles (GAAP) must maintain risk-based capital only
against the amount of recourse retained, provided the institution establishes a recourse
liability account that is sufficient under GAAP. Only loans and leases to businesses that meet
the criteria for a small business concern established by the Small Business Administration
under Section 3(a) of the Small Business Act (15 U.S.C. 632 et seq.) are eligible for this
favorable risk-based capital treatment.
In general, a "qualifying institution" is one that is well capitalized without regard to the
Section 208 provisions. If a bank ceases to be a qualifying institution or exceeds the retained
recourse limit set forth in banking agency regulations implementing Section 208, all new
transfers of small business obligations with recourse would not be treated as sales.
However, the reporting and risk-based capital treatment described above will continue to
apply to any transfers of small business obligations with recourse that were consummated
during the time the bank was a "qualifying institution" and did not exceed the limit.
FFIEC 051
•
In column B, report 100 percent of the amount reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of the portion of
retained recourse on small business obligations sold with recourse reported in
Schedule SU, items 4 and 5, that are secured by collateral or has a guarantee that
qualifies for the zero percent risk weight.
•
In column G–20% risk weight, include the credit equivalent amount of the portion of
retained recourse on small business obligations sold with recourse reported in
Schedule SU, items 4 and 5, that are secured by collateral or has a guarantee that
qualifies for the 20 percent risk weight.
RC-R-93
(6-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
15
(cont.)
•
In column H–50% risk weight, include the credit equivalent amount of the portion of
retained recourse on small business obligations sold with recourse reported in
Schedule SU, items 4 and 5, that are secured by collateral or has a guarantee that
qualifies for the 50 percent risk weight.
•
In column I-100% risk weight, include the portion of the credit equivalent amount reported
in column B that is not included in columns C through H and J. Also include the credit
equivalent amount of the portion of retained recourse on small business obligations sold
with recourse reported in Schedule SU, items 4 and 5, that are secured by collateral or
has a guarantee that qualifies for the 100 percent risk weight.
16
Repo-style transactions. Repo-style transactions include:
•
•
•
•
Securities lending transactions, including transactions in which the bank acts agent for a
customer and indemnifies the customer against loss. Securities lent are reported in
Schedule RC-L, item 6.a.
Securities borrowing transactions. Securities borrowed are reported in Schedule RC-L,
item 6.b.
Securities purchased under agreements to resell (i.e., reverse repos). Securities
purchased under agreements to resell are reported in Schedule RC, item 3.b.
Securities sold under agreements to repurchase (i.e., repos). Securities sold under
agreements to repurchase are reported in Schedule RC, item 14.b.1
Report in column A the exposure amount of repo-style transactions that do not meet the
definition of a securitization exposure as described in §.2 of the regulatory capital rules.
For repo-style transactions to which the bank applies the Simple Approach to recognize the
risk-mitigating effects of qualifying financial collateral, as outlined in §.37 of the regulatory
capital rules, the exposure amount to be reported in column A is the sum of the fair value as
of the report date of securities the bank has lent,2 the amount of cash or the fair value as of
the report date of other collateral the bank has posted for securities borrowed, the amount of
cash provided to the counterparty for securities purchased under agreements to resell (as
reported in Schedule RC, item 3.b), and the fair value as of the report date of securities sold
under agreements to repurchase.
For repo-style transactions to which the bank applies the Collateral Haircut Approach to
recognize the risk-mitigating effects of qualifying financial collateral, as outlined in §.37 of the
regulatory capital rules, the exposure amount to be reported in column A for a repo-style
transaction or a single-product netting set of such transactions is determined by using the
exposure amount equation in §.37(c) of the regulatory capital rules.
A bank may apply either the Simple Approach or the Collateral Haircut Approach to repostyle transactions; however, the bank must use the same approach for similar exposures or
transactions. For further information, see the discussion of “Treatment of Collateral and
Guarantees” in the General Instructions for Schedule RC-R, Part II.
1
Although securities purchased under agreements to resell and securities sold under agreements to repurchase
are reported on the balance sheet (Schedule RC) as assets and liabilities, respectively, they are included with
securities lent and securities borrowed and designated as repo-style transactions that are treated collectively as
off-balance sheet items under the regulatory capital rules.
2 For held-to-maturity securities that have been lent, the amortized cost of these securities is reported in
Schedule RC-L, item 6.a, but the fair value of these securities should be reported as the exposure amount in
column A of this item.
FFIEC 051
RC-R-94
(6-20)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
16
(cont.)
•
In column B, report 100 percent of the exposure amount reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of repo-style
transactions that are supported by the appropriate amount of collateral that qualifies for
the zero percent risk weight under the regulatory capital rules (refer to §.37 of the
regulatory capital rules).
•
In column D–2% risk weight, include the credit equivalent amount of centrally cleared
repo-style transactions with Qualified Central Counterparties (QCCPs), as defined in §.2
and described in §.35 of the regulatory capital rules.
•
In column E–4% risk weight, include the credit equivalent amount of centrally cleared
repo-style transactions with QCCPs in all other cases that do not meet the criteria of
qualification for a 2 percent risk weight, as described in §.35 of the regulatory capital
rules.
•
In column G–20% risk weight, include the credit equivalent amount of repo-style
transactions that are supported by the appropriate amount of collateral that qualifies for
the 20 percent risk weight under the regulatory capital rules. Also include the credit
equivalent amount of repo-style transactions that represents exposures to U.S.
depository institutions.
•
In column H–50% risk weight, include the credit equivalent amount of repo-style
transactions that are supported by the appropriate amount of collateral that qualifies for
the 50 percent risk weight under the regulatory capital rules.
•
In column I-100% risk weight, include the portion of the credit equivalent amount reported
in column B that is not included in columns C through H, J, and R. Also include the credit
equivalent amount of repo-style transactions that are supported by the appropriate
amount of collateral that qualifies for the 100 percent risk weight under the regulatory
capital rules.
•
In column J–150% risk weight, include the credit equivalent amount of repo-style
transactions that are supported by the appropriate amount of collateral that qualifies for
the 150 percent risk weight under the regulatory capital rules.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of repo-style transactions that is secured by qualifying financial collateral that meets the
definition of a securitization exposure in §.2 of the regulatory capital rules or is a mutual
fund only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure collateral under the Simple Approach or the Collateral Haircut Approach
outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the risk
weight assigned to the collateralized portion of the repo-style exposure may not be less
than 20 percent. For information on the reporting of such repo-style transactions in
columns R and S, refer to the instructions for Schedule RC-R, Part, II, item 16, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
•
For repo-style transactions that represent exposures to foreign central banks and foreign
banks that must be risk weighted according to the Country Risk Classification (CRC)
methodology, assign the credit equivalent amount of these exposures to risk-weight
categories based on the CRC methodology described in instructions for Schedule RC-R,
Part, II, item 16, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
FFIEC 051
RC-R-95
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
16
(cont.)
Examples: Reporting Securities Sold Under Agreements to Repurchase (Repos) under the
Simple Approach for Recognizing the Effects of Collateral
§.37 of the regulatory capital rules provides for the recognition of the risk-mitigating effects of
collateral when risk weighting assets collateralized by financial collateral (which is defined in
§.2 of the regulatory capital rules). The following examples illustrate the calculation of riskweighted assets and the reporting of securities sold under agreements to repurchase (repos)
in Schedule RC-R, Part II, item 16, using the Simple Approach.
Example 1: Security sold under an agreement to repurchase fully collateralized by cash
A bank has transferred an available-for-sale (AFS) debt security to a counterparty in a repo
transaction that is accounted for as a secured borrowing on the bank’s balance sheet. The
bank received $100 in cash from the repo counterparty in this transaction. The amortized
cost and the fair value of the AFS debt security are both $100 as of the report date.1 The
debt security is an exposure to a U.S. government-sponsored entity (GSE) that qualifies for a
20 percent risk weight. The repo counterparty is a company that would receive a 100 percent
risk weight.
Calculation of risk-weighted assets for the transaction:
1. The bank continues to report the AFS GSE debt security as an asset on its balance sheet
and to risk weight the security as an on-balance sheet asset at 20 percent:2
$100 x 20% = $20
2. The bank has a $100 exposure to the repo counterparty (the report date fair value of the
security transferred to the counterparty) that is collateralized by the $100 of cash
received from the counterparty. The bank risk weights its exposure to the repo
counterparty at zero percent in recognition of the cash received in the transaction from
the counterparty: $100 x 0% = $0
3. There is no additional exposure to the repo counterparty to risk weight because the
exposure to the counterparty is fully collateralized by the cash received.
The total risk-weighted assets arising from the transaction: $20
The bank would report the transaction in Schedule RC-R, Part II, as follows:
1. The bank reports the AFS debt security in item 2.b:
a. The $100 carrying value (i.e., the fair value) of the AFS debt security on the balance
sheet will be reported in column A.3
b. The $100 exposure amount of the AFS debt security will be reported in column G–
20% risk weight (which is the applicable risk weight for a U.S. GSE debt security).
2. The bank reports the repurchase agreement in item 16:
a. The bank’s $100 exposure to the repo counterparty, which is the fair value of the
debt security transferred in the repo transaction, is the exposure amount to be
reported in column A.
1
In both Example 1 and Example 2, because the fair value carrying value of the AFS GSE debt security equals the
amortized cost of the debt security, a bank that has made the AOCI opt-out election in Schedule RC-R, Part I,
item 3.a, does not need to adjust the carrying value (i.e., the fair value) of the debt security to determine the exposure
amount of the security. Thus, for a bank that has made the AOCI opt-out election, the carrying value of the AFS debt
security equals its exposure amount in Examples 1 and 2.
2
See the footnote above in the instructions for this item 16 that addresses Examples 1 and 2.
3
See the footnote above in the instructions for this item 16 that addresses Examples 1 and 2.
FFIEC 051
RC-R-96
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
16
(cont.)
Caption and Instructions
b. The $100 credit equivalent amount of the bank’s exposure to the repo counterparty
will be reported in column B.
c. Because the bank’s exposure to the repo counterparty is fully collateralized by the
$100 of cash received from the counterparty, the $100 credit equivalent amount of
the repurchase agreement will be reported in column C–0% risk weight (which is the
applicable risk weight for cash collateral).
(Column A)
Totals From
Schedule RC
2.b.
16.
Available-for-sale
securities
Repo-style
transactions
(Column B)
Adjustments
(Column C)
(Column G)
(Column I)
Allocation by Risk-Weight Category
0%
20%
100%
$100
$100
(Column A)
Face, Notional,
or Other
Amount
(Column B)
Credit
Equivalent
Amount
$100
$100
2.b.
(Column C)
(Column G)
(Column I)
Allocation by Risk-Weight Category
0%
20%
$100
100%
16.
Example 2: Security sold under an agreement to repurchase (repo) not fully collateralized by
cash
A bank has transferred an AFS debt security to a counterparty in a repo transaction that is
accounted for as a secured borrowing on the bank’s balance sheet. The bank received $98
in cash from the repo counterparty in this transaction. The amortized cost and the fair value
of the AFS debt security are both $100 as of the report date.1 The debt security is an
exposure to a U.S. GSE that qualifies for a 20 percent risk weight. The repo counterparty is a
company that would receive a 100 percent risk weight.
Calculation of risk-weighted assets for the transaction:
1. The bank continues to report the AFS GSE debt security as an asset on its balance sheet
and to risk weight the security as an on-balance sheet asset at 20 percent:2
$100 x 20% = $20
2. The bank has a $100 exposure to the repo counterparty (the report date fair value of the
security transferred to the counterparty) of which $98 is collateralized by the cash
received from the counterparty. The bank risk weights the portion of its exposure to the
repo counterparty that is collateralized by the cash received from the counterparty at zero
percent: $98 x 0% = $0
3. The bank risk weights its $2 uncollateralized exposure to the repo counterparty using the
risk weight applicable to the counterparty: $2 x 100% = $2
The total risk-weighted assets arising from the transaction: $22
The bank would report the transaction in Schedule RC-R, Part II, as follows:
1. The bank reports the AFS debt security in item 2.b:
a. The $100 carrying value (i.e., the fair value) of the AFS debt security on the balance
sheet will be reported in column A.3
1
See the footnote above in the instructions for this item 16 that addresses Examples 1 and 2.
2
See the footnote above in the instructions for this item 16 that addresses Examples 1 and 2.
3
See the footnote above in the instructions for this item 16 that addresses Examples 1 and 2.
FFIEC 051
RC-R-97
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
16
(cont.)
Caption and Instructions
b. The $100 exposure amount of the AFS debt security will be reported in column G–
20% risk weight (which is the applicable risk weight for a U.S. GSE debt security).
2. The bank reports the repurchase agreement in item 16:
a. The bank’s $100 exposure to the repo counterparty, which is the fair value of the
debt security transferred in the repo transaction, is the exposure amount to be
reported in column A.
b. The $100 credit equivalent amount of the bank’s exposure to the repo counterparty
will be reported in column B.
c. Because the bank’s exposure to the repo counterparty is collateralized by the $98 of
cash received from the counterparty, $98 of the $100 credit equivalent amount of the
repurchase agreement will be reported in column C–0% risk weight (which is the
applicable risk weight for cash collateral).
d. The $2 uncollateralized exposure to the repo counterparty will be reported in
column I–100% risk weight (which is the applicable risk weight for the repo
counterparty).
(Column A)
Totals From
Schedule RC
2.b.
16.
17
Available-for-sale
securities
Repo-style
transactions
(Column B)
Adjustments
(Column C)
(Column G)
(Column I)
Allocation by Risk-Weight Category
0%
20%
100%
$100
$100
(Column A)
Face, Notional,
or Other
Amount
(Column B)
Credit
Equivalent
Amount
$100
$100
2.b.
(Column C)
(Column G)
(Column I)
Allocation by Risk-Weight Category
0%
$98
20%
100%
$2
16.
All other off-balance sheet liabilities. Report in column A:
• The notional amount of all other off-balance sheet liabilities reported in Schedule RC-L,
item 9, that are covered by the regulatory capital rules,
• The face amount of risk participations in bankers acceptances that have been acquired
by the reporting institution and are outstanding,
• The full amount of loans or other assets sold with credit-enhancing representations and
warranties1 that do not meet the definition of a securitization exposure as described in §.2
of the regulatory capital rules,
• The notional amount of written option contracts that act as financial guarantees that do
not meet the definition of a securitization exposure as described in §.2 of the regulatory
capital rules, and
• The notional amount of all forward agreements, which are defined as legally binding
contractual obligations to purchase assets with certain drawdown at a specified future
date, not including commitments to make residential mortgage loans or forward foreign
exchange contracts.
1
The definition of credit-enhancing representations and warranties in §.2 of the regulatory capital rules states that
such representations and warranties obligate an institution “to protect another party from losses arising from the
credit risk of the underlying exposures” and “include provisions to protect a party from losses resulting from the
default or nonperformance of the counterparties of the underlying exposures or from an insufficiency in the value of
the collateral backing the underlying exposures.” Thus, when loans or other assets are sold “with recourse” and the
recourse arrangement provides protection from losses as described in the preceding definition, the recourse
arrangement constitutes a credit-enhancing representation and warranty.
FFIEC 051
RC-R-98
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
17
(cont.)
However, exclude from column A:
• The amount of credit derivatives classified as trading assets that are subject to the
market risk capital rule (report in Schedule RC-R, Part II, items 20 and 21, as
appropriate),
• Credit derivatives purchased by the bank that are recognized as guarantees of an asset
or off-balance sheet exposure under the regulatory capital rules, i.e., credit derivatives
on which the bank is the beneficiary (report the guaranteed asset or exposure in
Schedule RC-R, Part II, in the appropriate balance sheet or off-balance sheet category –
e.g., item 5, “Loans and leases held for investment” – and in the risk-weight category
applicable to the derivative counterparty – e.g., column G–20% risk weight – rather than
the risk-weight category applicable to the obligor of the guaranteed asset), and
• The notional amount of standby letters of credit issued by another depository institution, a
Federal Home Loan Bank, or any other entity on behalf of the reporting bank that are
reported in Schedule RC-L, item 9, because these letters of credit are not covered by the
regulatory capital rules.
FFIEC 051
•
In column B, report 100 percent of the face amount, notional amount, or other amount
reported in column A.
•
In column C–0% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the zero percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column G–20% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the 20 percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column H–50% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the 50 percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through J. Include the credit
equivalent amount of liabilities to counterparties who meet, or that have guarantees or
collateral that meets, the criteria for the 100 percent risk weight category as described in
the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II, items 1
through 8, above.
•
In column J–150% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the 150 percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
For all other off-balance sheet liabilities that represent exposures to foreign central banks
and foreign banks that must be risk weighted according to the Country Risk Classification
(CRC) methodology, assign the credit equivalent amount of these exposures to riskweight categories based on the CRC methodology described in instructions for
Schedule RC-R, Part, II, item 17, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
RC-R-99
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
18
Caption and Instructions
Unused commitments (exclude unused commitments to asset-backed commercial
paper conduits). Report in items 18.a and 18.b the amounts of unused commitments that
are subject to the regulatory capital rules, excluding those that are unconditionally
cancelable, which are to be reported in Schedule RC-R, Part II, item 19. Where a bank
provides a commitment structured as a syndication or participation, the bank is only required
to calculate the exposure amount for its pro rata share of the commitment.
Exclude from items 18.a and 18.b any unused commitments that qualify as securitization
exposures, as defined in §.2 of the regulatory capital rules, including eligible asset-backed
commercial paper (ABCP) liquidity facilities. Unused commitments that are securitization
exposures must be reported in Schedule RC-R, Part II, item 10, column A. Also exclude
default fund contributions in the form of commitments made by a clearing member to a
central counterparty’s mutualized loss-sharing arrangement. Such default fund contributions
must be reported (as a negative number) in Schedule RC-R, Part II, item 8, column B.
18.a
Original maturity of one year or less. Report in column A the unused portion of those
unused commitments reported in Schedule RC-L, item 1, with an original maturity of one year
or less that are subject to the regulatory capital rules.
Under the regulatory capital rules, the unused portion of commitments (facilities) that are
unconditionally cancelable (without cause) at any time by the bank have a zero percent credit
conversion factor. The unused portion of such unconditionally cancelable commitments
should be excluded from this item and reported in Schedule RC-R, Part II, item 19. For
further information, see the instructions for item 19.
"Original maturity" is defined as the length of time between the date a commitment is issued
and the date of maturity, or the earliest date on which the bank (1) is scheduled to (and as a
normal practice actually does) review the facility to determine whether or not it should be
extended and (2) can unconditionally cancel the commitment.
FFIEC 051
•
In column B, report 20 percent of the amount of unused commitments reported in
column A.
•
In column C–0% risk weight, include the credit equivalent amount of unused
commitments to counterparties who meet, or that have guarantees or collateral that
meets, the criteria for the zero percent risk weight category as described in the
instructions for Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8,
above.
•
In column G–20% risk weight, include the credit equivalent amount of unused
commitments to counterparties who meet, or that have guarantees or collateral that
meets, the criteria for the 20 percent risk weight category as described in the instructions
for Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column H–50% risk weight, include the credit equivalent amount of unused
commitments to counterparties who meet, or that have guarantees or collateral that
meets, the criteria for the 50 percent risk weight category as described in the instructions
for Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H, J, and R. Include the
credit equivalent amount of unused commitments to counterparties who meet, or
RC-R-100
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
18.a
(cont.)
18.b
that have guarantees or collateral that meets, the criteria for the 100 percent risk weight
category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, Part II, items 1 through 8, above.
•
In column J–150% risk weight, include the credit equivalent amount of unused
commitments to counterparties who meet, or that have guarantees or collateral that
meets, the criteria for the 150 percent risk weight category as described in the
instructions for Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8,
above.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of unused commitments that is secured by qualifying financial collateral that meets the
definition of a securitization exposure in §.2 of the regulatory capital rules or is a mutual
fund only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure or mutual fund collateral under the Simple Approach outlined in §.37 of the
regulatory capital rules. Under the Simple Approach, the risk weight assigned to the
collateralized portion of an unused commitment may not be less than 20 percent. For
information on the reporting of such unused commitments in columns R and S, refer to
the instructions for Schedule RC-R, Part, II, item 18.a, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
•
For unused commitments with an original maturity of one year or less that represent
exposures to foreign banks that must be risk weighted according to the Country Risk
Classification (CRC) methodology, assign credit equivalent amount of these exposures to
risk-weight categories based on the CRC methodology described in instructions for
Schedule RC-R, Part, II, item 18.a, in the instructions for the FFIEC 031 and FFIEC 041
Call Reports.
Original maturity exceeding one year. Report in column A the unused portion of those
commitments to make or purchase extensions of credit in the form of loans or participations
in loans, lease financing receivables, or similar transactions reported in Schedule RC-L,
item 1, that have an original maturity exceeding one year and are subject to the regulatory
capital rules. Also report in column A the face amount of those commercial and similar letters
of credit reported in Schedule RC-L, item 4, with an original maturity exceeding one year that
do not meet the definition of a securitization exposure as described in §.2 of the regulatory
capital rules.
Under the regulatory capital rules, the unused portion of commitments (facilities) which are
unconditionally cancelable (without cause) at any time by the bank (to the extent permitted
under applicable law) have a zero percent credit conversion factor. The unused portion of
such unconditionally cancelable commitments should be excluded from this item and
reported in Schedule RC-R, Part II, item 19. For further information, see the instructions for
item 19.
Also include in column A the unused portion of all revolving underwriting facilities and note
issuance facilities, regardless of maturity.
In the case of consumer home equity or mortgage lines of credit secured by liens on 1-4
family residential properties, a bank is deemed able to unconditionally cancel the commitment
if, at its option, it can prohibit additional extensions of credit, reduce the credit line, and
terminate the commitment to the full extent permitted by relevant federal law. Retail credit
cards and related plans, including overdraft checking plans and overdraft protection
FFIEC 051
RC-R-101
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
18.b
(cont.)
programs, are defined to be short-term commitments that should be converted at
zero percent and excluded from this item 18.b if the bank has the unconditional right to
cancel the line of credit at any time in accordance with applicable law.
For commitments providing for increases in the dollar amount of the commitment, the amount
to be converted to an on-balance sheet credit equivalent amount and risk weighted is the
maximum dollar amount that the bank is obligated to advance at any time during the life of
the commitment. This includes seasonal commitments where the dollar amount of the
commitment increases during the customer's peak business period. In addition, this riskbased capital treatment applies to long-term commitments that contain short-term options
which, for a fee, allow the customer to increase the dollar amount of the commitment. Until
the short-term option has expired, the reporting bank must convert and risk weight the
amount which it is obligated to lend if the option is exercised. After the expiration of a
short-term option which has not been exercised, the unused portion of the original amount of
the commitment is to be used in the credit conversion process.
FFIEC 051
•
In column B, report 50 percent of the amount of unused commitments and the face
amount of commercial and similar letters of credit reported in column A. Note that
unused commitments that qualify as securitization exposures as defined in §.2 of the
regulatory capital rules should be reported as securitization exposures in Schedule RC-R,
Part II, item 10.
•
In column C–0% risk weight, include the credit equivalent amount of unused
commitments and commercial and similar letters of credit to counterparties who meet,
or that have guarantees or collateral that meets, the criteria for the zero percent risk
weight category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, Part II, items 1 through 8, above.
•
In column G–20% risk weight, include the credit equivalent amount of unused
commitments and commercial and similar letters of credit to counterparties who meet,
or that have guarantees or collateral that meets, the criteria for the 20 percent risk weight
category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, Part II, items 1 through 8, above. Include the credit equivalent amount
of commitments that have been conveyed to U.S. depository institutions. Include the
credit equivalent amount of those commercial and similar letters of credit reported in
Schedule RC-L, item 4, with an original maturity exceeding one year that have been
conveyed to U.S. depository institutions.
•
In column H–50% risk weight, include the credit equivalent amount of unused
commitments and commercial and similar letters of credit to counterparties who meet,
or that have guarantees or collateral that meets, the criteria for the 50 percent risk weight
category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, Part II, items 1 through 8, above.
•
In column I–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H, J, and R. Also include
the credit equivalent amount of unused commitments and commercial and similar letters
of credit to counterparties who meet, or that have guarantees or collateral that meets, the
criteria for the 100 percent risk-weight category as described in the instructions for RiskWeighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
RC-R-102
(3-17)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
18.b
(cont.)
•
In column J–150% risk weight, include the credit equivalent amount of unused
commitments and commercial and similar letters of credit to counterparties who meet,
or that have guarantees or collateral that meets, the criteria for the 150 percent risk
weight category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, Part II, items 1 through 8, above.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of unused commitments that is secured by qualifying financial collateral that meets the
definition of a securitization exposure in §.2 of the regulatory capital rules or is a mutual
fund only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure or mutual fund collateral under the Simple Approach outlined in §.37 of the
regulatory capital rules. Under the Simple Approach, the risk weight assigned to the
collateralized portion of an unused commitment may not be less than 20 percent. For
information on the reporting of such unused commitments in columns R and S, refer to
the instructions for Schedule RC-R, Part, II, item 18.b, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
•
For unused commitments with an original maturity exceeding one year that represent
exposures to foreign banks, and commercial and similar letters of credit with an original
maturity exceeding one year that have been conveyed to foreign banks, that must be risk
weighted according to the Country Risk Classification (CRC) methodology, assign the
credit equivalent amount of these exposures to risk-weight categories based on the CRC
methodology described in instructions for Schedule RC-R, Part, II, item 18.a, in the
instructions for the FFIEC 031 and FFIEC 041 Call Reports.
19
Unconditionally cancelable commitments. Report the unused portion of those
unconditionally cancelable commitments reported in Schedule RC-L, item 1, that are subject
to the regulatory capital rules. The unused portion of commitments (facilities) that are
unconditionally cancelable (without cause) at any time by the bank (to the extent permitted by
applicable law) have a zero percent credit conversion factor. The bank should report the
unused portion of such commitments in column A of this item and zero in column B of this
item.
In the case of consumer home equity or mortgage lines of credit secured by liens on
1-4 family residential properties, a bank is deemed able to unconditionally cancel the
commitment if, at its option, it can prohibit additional extensions of credit, reduce the credit
line, and terminate the commitment to the full extent permitted by relevant federal law. Retail
credit cards and related plans, including overdraft checking plans and overdraft protection
programs, are defined to be short-term commitments that should be converted at zero
percent and included in this item if the bank has the unconditional right to cancel the line of
credit at any time in accordance with applicable law.
20
Over-the-counter derivatives. Report in column B the credit equivalent amount of over-thecounter derivative contracts covered by the regulatory capital rules. As defined in §.2 of the
regulatory capital rules, an over-the-counter (OTC) derivative contract is a derivative contract
that is not a cleared transaction.1 Include OTC credit derivative contracts held for trading
1
An OTC derivative includes a transaction:
(1) Between an institution that is a clearing member and a counterparty where the institution is acting as a financial
intermediary and enters into a cleared transaction with a central counterparty (CCP) that offsets the transaction
with the counterparty; or
(2) In which an institution that is a clearing member provides a CCP a guarantee on the performance of the
counterparty to the transaction.
FFIEC 051
RC-R-103
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
20
(cont.)
purposes and subject to the market risk capital rule. Include the client-facing leg of a
derivative contract cleared through a central counterparty or a qualified central counterparty,
which is to be reported as an over-the-counter derivative. Otherwise, do not include the
credit equivalent amount of centrally cleared derivative contracts, which must be reported in
Schedule RC-R, Part II, item 21. Do not include OTC derivative contracts that meet the
definition of a securitization exposure as described in §.2 of the regulatory capital rules; such
derivative contracts must be reported in Schedule RC-R, Part II, item 10.
The credit equivalent amount of an OTC derivative contract to be reported in column B is
determined under one of two methods, the current exposure method (CEM), as described
in §.34(b) of the regulatory capital rules, or the standardized approach for counterparty credit
risk (SA-CCR), as described in §.132(c) of the regulatory capital rules. Under the regulatory
capital rules, a non-advanced approaches institution may elect to use CEM or SA-CCR to
determine the credit equivalent amount of an OTC derivative contract, as of April 1, 2020.
A non-advanced approaches institution must notify its appropriate federal banking supervisor
before using SA-CCR. A non-advanced approaches institution must use the same
methodology – CEM or SA-CCR – to calculate the exposure amount for all its derivative
contracts, including centrally cleared derivative transactions, and may change its election
only with the prior approval of its appropriate federal banking supervisor.
For further information on the use of SA-CCR in relation to OTC derivative contracts, refer to
the instructions for Schedule RC-R, Part II, item 20, in the instructions for the FFIEC 031 and
FFIEC 041 Call Reports.
When using CEM, the credit equivalent amount of an OTC derivative contract to be reported
in column B is the sum of its current credit exposure (as reported in Schedule RC-R, Part II,
Memorandum item 1) plus the potential future exposure (PFE) over the remaining life of the
derivative contract (regardless of its current credit exposure, if any), as described in §.34 of
the regulatory capital rules. The current credit exposure of a derivative contract is (1) the fair
value of the contract when that fair value is positive and (2) zero when the fair value of the
contract is negative or zero. The PFE of a derivative contract, which is based on the type of
contract and the contract's remaining maturity, is determined by multiplying the notional
principal amount of the contract by the appropriate conversion factor from the following chart.
The notional principal amounts of the reporting bank's OTC derivatives that are subject to the
risk-based capital requirements are reported by remaining maturity in Schedule RC-R, Part II,
Memorandum items 2.a through 2.g.
Remaining Maturity
One year or less
Greater than one year &
less than or equal to five
years
Greater than five years
FFIEC 051
Interest
Rate
Foreign
exchange
rate and
gold
0.0%
1.0%
Credit
(investment
grade
reference
assets)
5.0%
0.5%
5.0%
1.5%
7.5%
Equity
Precious
metals
(except
gold)
Other
10.0%
6.0%
7.0%
10.0%
5.0%
10.0%
8.0%
7.0%
12.0%
5.0%
10.0%
10.0%
8.0%
15.0%
RC-R-104
(6-20)
Credit (noninvestment grade
reference assets)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
20
(cont.)
Under the banking agencies' regulatory capital rules and for purposes of Schedule RC-R,
Part II, the existence of a legally enforceable bilateral netting agreement between the
reporting bank and a counterparty may be taken into consideration when determining both
the current credit exposure and the potential future exposure of derivative contracts.
For further information on the treatment of bilateral netting agreements covering derivative
contracts, refer to the instructions for Schedule RC-R, Part II, Memorandum item 1, and §.34
of the regulatory capital rules.
When assigning OTC derivative exposures to risk-weight categories, banks can recognize
the risk-mitigating effects of financial collateral by using either the Simple Approach or the
Collateral Haircut Approach, as described in §.37 of the regulatory capital rules.
FFIEC 051
•
In column C–0% risk weight, include the credit equivalent amount of OTC derivative
contracts with counterparties who meet, or that have guarantees or collateral that meets,
the criteria for the zero percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above. This
includes OTC derivative contracts that are marked-to-market on a daily basis and subject
to a daily margin maintenance requirement, to the extent the contracts are collateralized
by cash on deposit at the reporting institution.
•
In column F–10% risk weight, include the credit equivalent amount of OTC derivative
contracts that are marked-to-market on a daily basis and subject to a daily margin
maintenance requirement, to the extent the contracts are collateralized by a sovereign
exposure that qualifies for a zero percent risk weight under §.32 of the regulatory capital
rules.
•
In column G–20% risk weight, include the credit equivalent amount of OTC derivative
contracts with counterparties who meet, or that have guarantees or collateral that meets,
the criteria for the 20 percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column H–50% risk weight, include the credit equivalent amount of OTC derivative
contracts with counterparties who meet, or that have guarantees or collateral that meets,
the criteria for the 50 percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In column I–100% risk weight, include the credit equivalent amount of OTC derivative
contracts with counterparties who meet, or that have guarantees or collateral that meets,
the criteria for the 100 percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above. Also
include the portion of the credit equivalent amount reported in column B that is not
included in columns C through H, J, and R.
•
In column J–150% risk weight, include the credit equivalent amount of OTC derivative
contracts with counterparties who meet, or that have guarantees or collateral that meets,
the criteria for the 150 percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, Part II, items 1 through 8, above.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of OTC derivative contracts that is secured by qualifying financial collateral that meets the
definition of a securitization exposure in §.2 of the regulatory capital rules or is a mutual
RC-R-105
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
20
(cont.)
21
Caption and Instructions
fund only if the bank chooses to recognize the risk-mitigating effects of the securitization
exposure or mutual fund collateral under the Simple Approach or the Collateral Haircut
Approach outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the
risk weight assigned to the collateralized portion of the OTC derivative exposure may not
be less than 20 percent. For information on the reporting of such OTC derivative
exposures in columns R and S, refer to the instructions for Schedule RC-R, Part, II,
item 20, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
Centrally cleared derivatives. Report in column B the credit equivalent amount of centrally
cleared derivative contracts covered by the regulatory capital rules. As described in §.2 of
the regulatory capital rules, a centrally cleared derivative contract is an exposure associated
with an outstanding derivative contract that an institution, or an institution that is a clearing
member has entered into with a central counterparty (CCP), that is, a transaction that a CCP
has accepted. Include centrally cleared credit derivative contracts held for trading purposes
that are subject to the market risk capital rule and meet the operational requirements for
counterparty credit risk in §.3 of the regulatory capital rules. However, do not include the
client-facing leg of a derivative contract cleared through a CCP or a qualified CCP, which is to
be reported as an over-the-counter derivative in Schedule RC-R, Part II, item 20. For
information on the regulatory capital treatment of settled-to-market contracts, see the
discussion of “Treatment of Certain Centrally Cleared Derivative Contracts” in the General
Instructions for Schedule RC-R, Part II.
Do not include the credit equivalent amount of over-the-counter derivative contracts, which
must be reported in Schedule RC-R, Part II, item 20. Do not include centrally cleared
derivative contracts that meet the definition of a securitization exposure as described in §.2 of
the regulatory capital rules; such derivative contracts must be reported in Schedule RC-R,
Part II, item 10.
The credit equivalent amount of a centrally cleared derivative contract to be reported in
column B is determined under either §.35 or §.133 of the regulatory capital rules. Under the
regulatory capital rules, a non-advanced approaches institution that elects to calculate the
exposure amount for its OTC derivative contracts using the standardized approach for
counterparty credit risk (SA-CCR), as described in §.132(c), must apply the treatment of
cleared transactions under §.133 to its derivative contracts that are cleared transactions and
to all default fund contributions associated with such derivative contracts, rather than applying
§.35. A non-advanced approaches institution must use the same methodology ‒ the current
exposure method (CEM) or SA-CCR ‒ to calculate the exposure amount for all its derivative
contracts and may change its election only with the prior approval of its appropriate federal
banking supervisor.
For further information on the use of SA-CCR in relation to centrally cleared derivative
contracts, refer to the instructions for Schedule RC-R, Part II, item 21, in the instructions for
the FFIEC 031 and FFIEC 041 Call Reports.
When using CEM, the credit equivalent amount of a centrally cleared derivative contract is
the sum of its current credit exposure (as reported in Schedule RC-R, Memorandum item 1),
plus the potential future exposure (PFE) over the remaining life of the derivative contract, plus
the fair value of collateral posted by the clearing member client bank and held by the CCP or
a clearing member in a manner that is not bankruptcy remote. The current credit exposure of
a derivative contract is (1) the fair value of the contract when that fair value is positive and
(2) zero when the fair value of the contract is negative or zero. The PFE of a derivative
FFIEC 051
RC-R-106
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
21
(cont.)
contract, which is based on the type of contract and the contract's remaining maturity, is
determined by multiplying the notional principal amount of the contract by the appropriate
conversion factor from the following chart.
The notional principal amounts of the reporting bank's centrally cleared derivatives that are
subject to the risk-based capital requirements are reported by remaining maturity in
Schedule RC-R, Part II, Memorandum items 3.a through 3.g.
Remaining Maturity
One year or less
Greater than one year &
less than or equal to five
years
Greater than five years
FFIEC 051
Interest
Rate
Foreign
exchange
rate and
gold
0.0%
1.0%
Credit
(investment
grade
reference
assets)
5.0%
0.5%
5.0%
1.5%
7.5%
Equity
Precious
metals
(except
gold)
Other
10.0%
6.0%
7.0%
10.0%
5.0%
10.0%
8.0%
7.0%
12.0%
5.0%
10.0%
10.0%
8.0%
15.0%
Credit (noninvestment grade
reference assets)
•
In column C–0% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with CCPs and other counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the zero percent risk-weight category
as described in the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II,
items 1 through 8, above.
•
In column D–2% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with Qualified Central Counterparties (QCCPs) where the collateral
posted by the bank to the QCCP or clearing member is subject to an arrangement that
prevents any losses to the clearing member client due to the joint default or a concurrent
insolvency, liquidation, or receivership proceeding of the clearing member and any other
clearing member clients of the clearing member; and the clearing member client bank
has conducted sufficient legal review to conclude with a well-founded basis (and
maintains sufficient written documentation of that legal review) that in the event of a legal
challenge (including one resulting from default or from liquidation, insolvency, or
receivership proceeding) the relevant court and administrative authorities would find the
arrangements to be legal, valid, binding, and enforceable under the law of the relevant
jurisdictions. See the definition of QCCP in §.2 of the regulatory capital rules.
•
In column E–4% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with QCCPs in all other cases that do not meet the qualification
criteria for a 2 percent risk weight, as described in §.2 of the regulatory capital rules.
•
In column G–20% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with CCPs and other counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 20 percent risk-weight category as
described in the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II,
items 1 through 8, above.
•
In column H–50% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with CCPs and other counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 50 percent risk-weight category as
described in the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II,
items 1 through 8, above.
RC-R-107
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
21
22
Caption and Instructions
•
In column I–100% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with CCPs and other counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 100 percent risk-weight category
as described in the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II,
items 1 through 8, above. Also include the portion of the credit equivalent amount
reported in column B that is not included in columns C through H and J.
•
In column J–150% risk weight, include the credit equivalent amount of centrally cleared
derivative contracts with CCPs and other counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 150 percent risk-weight category
as described in the instructions for Risk-Weighted Assets and for Schedule RC-R, Part II,
items 1 through 8, above.
Unsettled transactions (failed trades). NOTE: This item includes unsettled transactions in
the reporting bank’s trading book and in its banking book. Report as unsettled transactions
all on- and off-balance sheet transactions involving securities, foreign exchange instruments,
and commodities that have a risk of delayed settlement or delivery, or are already delayed,
and against which the reporting bank must hold risk-based capital as described in §.38 of the
regulatory capital rules.
For delivery-versus-payment (DvP) transactions1 and payment-versus-payment (PvP)
transactions,2 report in column A the positive current exposure of those unsettled transactions
with a normal settlement period in which the reporting bank’s counterparty has not made
delivery or payment within five business days after the settlement date, which are the DvP
and PvP transactions subject to risk weighting under §.38 of the regulatory capital rules.
Positive current exposure is equal to the difference between the transaction value at the
agreed settlement price and the current market price of the transaction, if the difference
results in a credit exposure of the bank to the counterparty.
For delayed non-DvP/non-PvP transactions,3 also include in column A the current fair value
of the deliverables owed to the bank by the counterparty in those transactions with a normal
settlement period in which the reporting bank has delivered cash, securities, commodities, or
currencies to its counterparty, but has not received its corresponding deliverables, which are
the non-DvP/non-PvP transactions subject to risk weighting under §.38 of the regulatory
capital rules.
For further information on the reporting of unsettled transactions, including assigning these
exposures to risk-weight categories, refer to the instructions for Schedule RC-R, Part, II,
item 22, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
1 DvP transaction means a securities or commodities transaction in which the buyer is obligated to make payment
only if the seller has made delivery of the securities or commodities and the seller is obligated to deliver the securities
or commodities only if the buyer has made payment.
2
PvP transaction means a foreign exchange transaction in which each counterparty is obligated to make a final
transfer of one or more currencies only if the other counterparty has made a final transfer of one or more currencies.
3
Non-DvP/non-PvP transaction means any other delayed or unsettled transaction that does not meet the definition of
a DvP or a PvP transaction.
FFIEC 051
RC-R-108
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
Totals
NOTE: Schedule RC-R, Part II, items 23 and 25, columns C through Q, as applicable, are to be
completed semiannually in the June and December reports only. Items 26 through 31 are to be
completed quarterly.
23
Total assets, derivatives, off-balance sheet items, and other items subject to risk
weighting by risk weight category. For each of columns C through P, report the sum of
items 11 through 22. For column Q, report the sum of items 10 through 22.
24
Risk weight factor.
25
Risk-weighted assets by risk weight category. For each of columns C through Q, multiply
the amount in item 23 by the risk weight factor specified for that column in item 24.
26
Risk-weighted assets base for purposes of calculating the allowance for loan and
lease losses 1.25 percent threshold. In the reports for March and September, report the
amount of the risk-weighted assets base for purposes of calculating the allowance for loan
and lease losses 1.25 percent threshold. In the reports for June and December, report the
sum of:
• Schedule RC-R, Part II:
o Items 2.b through 20, column S,
o Items 9.a, 9.b, 9.c, 9.d, and 10, columns T and U, and
o Item 25, columns C through Q
• Schedule RC-R, Part I:
o The portion of item 10.b composed of “Investments in the institution’s own shares
to the extent not excluded as part of treasury stock,”
o The portion of item 10.b composed of “Reciprocal cross-holdings in the capital of
financial institutions in the form of common stock,”
o Items 13 through 15,
o Item 24, excluding the portion of item 24 composed of tier 2 capital deductions
reported in Part I, item 45, for which the institution does not have a sufficient
amount of tier 2 capital before deductions reported in Part I, item 44, to absorb
these deductions, and
o Item 45.
For institutions that have adopted the current expected credit losses methodology (CECL),
the risk-weighted assets base reported in this item 26 is for purposes of calculating the
adjusted allowances for credit losses (AACL) 1.25 percent threshold.
NOTE: Item 27 is applicable only to banks that are subject to the market risk capital rule.
27
Standardized market risk-weighted assets. Report the amount of the bank's standardized
market risk-weighted assets. This item is applicable only to those banks covered by
Subpart F of the regulatory capital rules (i.e., the market risk capital rule), as provided in
§.201 of the regulatory capital rules and in the discussion of “Banks That Are Subject to the
Market Risk Capital Rule” in the General Instructions for Schedule RC-R, Part II.
A bank’s measure for market risk for its covered positions is the sum of its value-at-risk
(VaR)-based, stressed VaR-based, incremental risk, and comprehensive risk capital
requirements plus its specific risk add-ons and any capital requirement for de minimis
exposures. A bank's standardized market risk-weighted assets equal its measure for market
risk multiplied by 12.5 (the reciprocal of the minimum 8.0 percent capital ratio).
For further information on the meaning of the term “covered position,” refer to the discussion
of “Banks That Are Subject to the Market Risk Capital Rule” in the General Instructions for
Schedule RC-R, Part II.
FFIEC 051
RC-R-109
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
28
Caption and Instructions
Risk-weighted assets before deductions for excess allowance for loan and lease
losses and allocated transfer risk reserve. In the reports for March and September,
report the amount of risk-weighted assets before deductions for excess allowance for loan
and lease losses and allocated transfer risk reserve. In the reports for June and December,
report the sum of items 2.b through 20, column S; items 9.a, 9.b, 9.c, 9.d, and 10, columns T
and U; item 25, columns C through Q; and, if applicable, item 27. (Item 27 is applicable only
to banks that are subject to the market risk capital rule.)
For institutions that have adopted the current expected credit losses methodology (CECL),
the risk-weighted assets reported in this item 28 represents the amount of risk-weighted
assets before deductions for excess adjusted allowances for credit losses (AACL) and
allocated transfer risk reserve.
29
LESS: Excess allowance for loan and lease losses. Report the amount, if any, by which
the bank's allowance for loan and lease losses (ALLL) or adjusted allowances for credit
losses (AACL), as applicable, for regulatory capital purposes exceeds 1.25 percent of the
bank's risk-weighted assets base reported in Schedule RC-R, Part II, item 26.
For an institution that has not adopted the current expected credit losses methodology
(CECL), the institution’s ALLL for regulatory capital purposes equals Schedule RC, item 4.c,
"Allowance for loan and lease losses," less any allocated transfer risk reserve included in
Schedule RC, item 4.c, plus Schedule RC-G, item 3, "Allowance for credit losses on offbalance sheet credit exposures." If an institution’s ALLL for regulatory capital purposes, as
defined in the preceding sentence, exceeds 1.25 percent of Schedule RC-R, Part II, item 26,
the amount to be reported in this item equals the institution’s ALLL for regulatory capital
purposes less Schedule RC-R, Part I, item 42, "Allowance for loan and lease losses
includable in tier 2 capital."
For an institution that has adopted CECL, the institution’s AACL for regulatory capital
purposes equals Schedule RI-B, Part II, item 7, columns A and B, “Balance end of current
period” for loans and leases held for investment and held-to-maturity debt securities,
respectively; plus Schedule RI-B, Part II, Memorandum item 6, “Allowance for credit losses
on other financial assets measured at amortized cost (not included in item 7, above)”;
less Schedule RC-R, Part II, sum of Memorandum items 4.a, 4.b, and 4.c, “Amount of
allowances for credit losses on purchased credit-deteriorated assets” for loans and leases
held for investment, held-to-maturity debt securities, and other financial assets measured
at amortized cost, respectively; less any allocated transfer risk reserve included in
Schedule RI-B, Part II, item 7, columns A and B, and Memorandum item 6; plus
Schedule RC-G, item 3, ‘‘Allowance for credit losses on off-balance sheet credit exposures.’’
For an institution that has not adopted CECL, the sum of the amounts reported in
Schedule RC-R, Part I, item 42, and Schedule RC-R, Part II, item 29, must equal
Schedule RC, item 4.c, less any allocated transfer risk reserve included in Schedule RC,
item 4.c, plus Schedule RC-G, item 3.
30
LESS: Allocated transfer risk reserve. Report the entire amount of any allocated transfer
risk reserve (ATRR) the reporting bank is required to establish and maintain as specified in
Section 905(a) of the International Lending Supervision Act of 1983, in the agency
regulations implementing the Act (Subpart D of Federal Reserve Regulation K, Part 347 of
the FDIC's Rules and Regulations, and 12 CFR Part 28, Subpart C (OCC)), and in any
guidelines, letters, or instructions issued by the agencies. The entire amount of the ATRR
equals the ATRR related to loans and leases held for investment (which is included in
Schedule RC, item 4,c, “Allowance for loan and lease losses”) plus the ATRR for assets other
than loans and leases held for investment.
31
Total risk-weighted assets. Report the amount derived by subtracting items 29 and 30 from
item 28.
FFIEC 051
RC-R-110
(3-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Schedule RC-R, Part II, Memorandum items 1 through 3.g, are to be completed semiannually in
the June and December reports only.
1
Current credit exposure across all derivative contracts covered by the regulatory
capital rules. Report the total current credit exposure amount when using the current
exposure method (CEM) or replacement cost amount when using the standardized approach
for counterparty credit risk (SA-CCR) after considering applicable legally enforceable bilateral
netting agreements for all derivative contracts that are over-the-counter derivative contracts
(as defined in §.2 of the regulatory capital rules) and all derivative contracts that are cleared
transactions (as described in §.2 of the regulatory capital rules) and are covered by §.34,
§.35, §.132, and §.133 of the regulatory capital rules, as applicable. Banks that are subject to
the market risk capital rule should exclude all covered positions subject to that rule, except for
foreign exchange derivatives that are outside of the trading account.1 Foreign exchange
derivatives that are outside of the trading account and all over-the-counter derivatives
continue to have a counterparty credit risk capital charge and, therefore, a current credit
exposure amount for these derivatives should be reported in this item.
Include the current credit exposure arising from credit derivative contracts where the bank is
the protection purchaser (beneficiary) and the credit derivative contract is either (a) defined
as a covered position under the market risk capital rule or (b) not defined as a covered
position under the market risk capital rule and not recognized as a guarantee for regulatory
capital purposes.
As discussed further below, current credit exposure (sometimes referred to as the
replacement cost) is the fair value of a derivative contract when that fair value is positive.
The current credit exposure is zero when the fair value is negative or zero.
Exclude the positive fair value of derivative contracts that are neither over-the-counter
derivative contracts nor derivative contracts that are cleared transactions under §.2 of the
regulatory capital rules. Such derivative contracts include written option contracts, including
so-called “derivative loan commitments,” i.e., a lender’s commitment to originate a mortgage
loan that will be held for resale. Written option contracts that are, in substance, financial
guarantees, are discussed below. For “derivative loan commitments,” which are reported as
over-the-counter written option contracts in Schedule RC-L, if the fair value of such a
commitment is positive and reported as an asset in Schedule RC, item 11, this positive fair
value should be reported in the appropriate risk-weight category in Schedule RC-R, Part II,
item 8, and not as a component of the current credit exposure to be reported in this item.
Purchased options held by the reporting bank that are traded on an exchange are covered by
the regulatory capital rules unless such options are subject to a daily variation margin.
Variation margin is defined as the gain or loss on open positions, calculated by marking to
market at the end of each trading day. Such gain or loss is credited or debited by the
clearing house to each clearing member's account, and by members to their customers'
accounts.
1
For further information on the market risk capital rule and the meaning of the term “covered position,” refer to
the discussion of “Banks That Are Subject to the Market Risk Capital Rule” in the General Instructions for
Schedule RC-R, Part II, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
.
FFIEC 051
RC-R-111
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
1
(cont.)
If a written option contract acts as a financial guarantee that does not meet the definition of a
securitization exposure as described in §.2 of the regulatory capital rules, then for risk-based
capital purposes the notional amount of the option should be included in Schedule RC-R,
Part II, item 17, column A, as part of "All other off-balance sheet liabilities." An example of
such a contract occurs when the reporting bank writes a put option to a second bank that has
a loan to a third party. The strike price would be the equivalent of the par value of the loan. If
the credit quality of the loan deteriorates, thereby reducing the value of the loan to the second
bank, the reporting bank would be required by the second bank to take the loan onto its
books.
Do not include derivative contracts that meet the definition of a securitization exposure as
described in §.2 of the regulatory capital rules; such derivative contracts must be reported in
Schedule RC-R, Part II, item 10.
Current credit exposure, when using CEM, or replacement cost, when using SA-CCR, should
be derived as follows: Determine whether a qualifying master netting agreement, as defined
in §.2 of the regulatory capital rules, is in place between the reporting bank and a
counterparty. If such an agreement is in place, the fair values of all applicable derivative
contracts with that counterparty that are included in the netting agreement are netted to a
single amount.
Next, for all other derivative contracts covered by the regulatory capital rules that have
positive fair values, the total of the positive fair values is determined. Then, report in this item
the sum of (i) the net positive fair values of applicable derivative contracts subject to
qualifying master netting agreements and (ii) the total positive fair values of all other contracts
covered by the regulatory capital rules for both OTC and centrally cleared contracts. The
current credit exposure reported in this item is a component of the credit equivalent amount
of derivative contracts that is to be reported in Schedule RC-R, items 20 or 21, column B,
depending on whether the contracts are centrally cleared.
2
Notional principal amounts of over-the-counter derivative contracts. Report in the
appropriate subitem and column the notional amount or par value of all over-the-counter
(OTC) derivative contracts, including credit derivatives, that are subject to §.34 or §.132 of
the regulatory capital rules.1 Such contracts include swaps, forwards, and purchased
options. Do not include OTC derivative contracts that meet the definition of a securitization
exposure as described in §.2 of the regulatory capital rules; such derivative contracts must be
reported in Schedule RC-R, Part II, item 10. Report notional amounts and par values in the
column corresponding to the OTC derivative contract's remaining term to maturity from the
report date. Remaining maturities are to be reported as (1) one year or less in column A,
(2) over one year through five years in column B, or (3) over five years in column C.
Regardless of whether an institution uses the standardized approach for counterparty credit
risk (SA-CCR) or the current exposure methodology (CEM) to calculate exposure amounts
for its derivative contracts, report in Memorandum items 2.a through 2.g the notional amounts
of the contracts, as this term is defined in U.S. generally accepted accounting principles,
unless a derivative contract has a multiplier component as discussed in the following
paragraph.
1
See the instructions for Schedule RC-R, Part II, item 20, for the definition of an OTC derivative contract.
FFIEC 051
RC-R-112
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
2
(cont.)
The notional amount or par value to be reported under SA-CCR and CEM for an OTC
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 call for quarterly settlement of the difference between 5 percent and LIBOR multiplied
by 10 has an effective notional amount of $10,000,000.)
The notional amount to be reported under SA-CCR and CEM for an amortizing OTC
derivative contract is the contract's current (or, if appropriate, effective) notional amount. This
notional amount should be reported in the column corresponding to the contract's remaining
term to final maturity.
For descriptions of "interest rate derivative contracts," "foreign exchange contracts," “equity
derivative contracts,” "commodity contracts" (including gold and precious metals), and “credit
derivative contracts,” refer to the instructions for Schedule SU, item 1.
Exclude from this item the notional amount of OTC written option contracts, including
so-called “derivative loan commitments,” which are not subject to §.34 of the regulatory
capital rules.
For information on reporting the remaining maturities of over-the-counter derivative contracts
when using SA-CCR, refer to the instructions for Schedule RC-R, Part II, Memorandum
item 2, in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
3
Notional principal amounts of centrally cleared derivative contracts. Report in the
appropriate subitem and column the notional amount or par value of all derivative contracts,
including credit derivatives, that are cleared transactions (as described in §.2 of the
regulatory capital rules) and are subject to §.35 or §.133 of the regulatory capital rules.1 Such
centrally cleared derivative contracts include swaps, forwards, and purchased options. Do
not include centrally cleared derivative contracts that meet the definition of a securitization
exposure as described in §.2 of the regulatory capital rules; such derivative contracts must be
reported in Schedule RC-R, Part II, item 10. Report notional amounts and par values in the
column corresponding to the centrally cleared derivative contract's remaining term to maturity
from the report date. Remaining maturities are to be reported as (1) one year or less in
column A, (2) over one year through five years in column B, or (3) over five years in
column C.
Regardless of whether an institution uses the standardized approach for counterparty credit
risk (SA-CCR) or the current exposure methodology (CEM) to calculate exposure amounts
for its derivative contracts, report in Memorandum items 3.a through 3.g the notional amounts
of the contracts, as this term is defined in U.S. generally accepted accounting principles,
unless a derivative contract has a multiplier component as discussed in the following
paragraph.
The notional amount or par value to be reported under SA-CCR and CEM for a centrally
cleared 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 call for quarterly settlement of the difference between 5 percent and
LIBOR multiplied by 10 has an effective notional amount of $10,000,000.)
1
See the instructions for Schedule RC-R, Part II, item 21, for the description of derivative contracts that are cleared
transactions, referred to hereafter as centrally cleared derivative contracts.
FFIEC 051
RC-R-113
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
3
(cont.)
The notional amount to be reported under SA-CCR and CEM for an amortizing centrally
cleared derivative contract is the contract's current (or, if appropriate, effective) notional
amount. This notional amount should be reported in the column corresponding to the
contract's remaining term to final maturity.
For descriptions of "interest rate derivative contracts," "foreign exchange contracts," “equity
derivative contracts,” "commodity contracts" (including gold and precious metals), and “credit
derivative contracts,” refer to the instructions for Schedule SU, item 1.
For information on reporting the remaining maturities of centrally cleared derivative contracts,
including settled-to-market cleared derivatives, when using the SA-CCR, refer to the
instructions for Schedule RC-R, Part II, Memorandum item 3, in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
2.a and
3.a
Interest rate. Report the remaining maturities of interest rate contracts that are
subject to the regulatory capital rules.
2.b and
3.b
Foreign exchange rate and gold. Report the remaining maturities of foreign
exchange contracts and the remaining maturities of gold contracts that are subject to the
regulatory capital rules.
2.c and
3.c
Credit (investment grade reference asset). Report the remaining maturities of
those credit derivative contracts where the reference entity meets the definition of investment
grade as described in §.2 of the regulatory capital rules.
2.d and
3.d
Credit (non-investment grade reference asset). Report the remaining maturities of
those credit derivative contracts where the reference entity does not meet the definition of
investment grade as described in §.2 of the regulatory capital rules.
2.e and
3.e
Equity. Report the remaining maturities of equity derivative contracts that are
subject to the regulatory capital rules.
2.f and
3.f
Precious metals (except gold). Report the remaining maturities of other precious
metals contracts that are subject to the regulatory capital rules. Report all silver, platinum,
and palladium contracts.
2.g and
3.g
Other. Report the remaining maturities of other derivative contracts that are subject to the
regulatory capital rules. For contracts with multiple exchanges of principal, notional amount
is determined by multiplying the contractual amount by the number of remaining payments
(i.e., exchanges of principal) in the derivative contract.
FFIEC 051
RC-R-114
(6-20)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum items 4.a through 4.c should be completed quarterly only by institutions that have
adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting
for credit losses. Institutions that have not adopted ASU 2016-13 should leave Memorandum items 4.a
through 4.c blank.
4
Amount of allowances for credit losses on purchased credit-deteriorated assets.
ASU 2016-13 introduces the concept of purchased credit-deteriorated (PCD) assets as a
replacement for purchased credit-impaired (PCI) assets. The PCD asset definition covers a
broader range of assets than the PCI asset definition. As defined in ASU 2016-13,
“purchased credit-deteriorated assets” are acquired individual financial assets (or acquired
groups of financial assets with similar risk characteristics) accounted for in accordance with
ASC Topic 326, Financial Instruments‒Credit Losses, that, as of the date of acquisition, have
experienced a more-than-insignificant deterioration in credit quality since origination, as
determined by the acquiring institution’s assessment.
ASU 2016-13 requires institutions to estimate and record a credit loss allowance for a PCD
asset at the time of purchase. The credit loss allowance is then added to the purchase price
to determine the amortized cost basis of the asset for financial reporting purposes.
Post-acquisition increases in credit loss allowances on PCD assets will be established
through a charge to earnings. This accounting treatment for PCD assets is different from the
current treatment of PCI assets, for which institutions are not permitted to estimate and
recognize credit loss allowances at the time of purchase. Rather, in general, credit loss
allowances for PCI assets are estimated subsequent to the purchase only if there is
deterioration in the expected cash flows from the assets.
4.a
Loans and leases held for investment. Report all allowances for credit losses on PCD
loans and leases held for investment.
4.b
Held-to-maturity debt securities. Report all allowances for credit losses on PCD held-tomaturity debt securities.
4.c
Other financial assets measured at amortized cost. Report all allowances for credit
losses on all other PCD financial assets, excluding PCD loans and leases held for
investment, held-to-maturity debt securities, and available-for-sale debt securities.
FFIEC 051
RC-R-115
(3-20)
RC-R – REGULATORY CAPITAL
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FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
SCHEDULE RC-T – FIDUCIARY AND RELATED SERVICES
General Instructions
This schedule should be completed on a fully consolidated basis, i.e., including any trust company
subsidiary (or subsidiaries) of the reporting institution.
Item No.
Caption and Instructions
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.
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, or a trust company subsidiary of the institution, serves in a fiduciary
capacity as defined in the instructions for item 1 of this schedule.
3
Does the institution have fiduciary or related activity (in the form of assets or
accounts) to report in this schedule? Institutions (including their trust company
subsidiaries) 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 commercial bank services such as hold-in-custody
repurchase 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 mortgage-backed securities (such as GNMA or FNMA) should respond "No."
If the answer to item 3 is "Yes," complete the applicable items of Schedule RC-T, as follows:
Institutions with total fiduciary assets (item 10, sum of columns A and B) greater than
$1 billion (as of the preceding December 31) or with gross fiduciary and related services
income greater than 10 percent of revenue (net interest income plus noninterest income) for
the preceding calendar year must complete:
• Items 4 through 22 quarterly;
• Items 23 through 26 annually with the December report;
• Memorandum item 3 quarterly; and
• Memorandum items 1, 2, and 4 annually with the December report.
FFIEC 051
RC-T-1
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FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Item No.
Caption and Instructions
3
(cont.)
Institutions with total fiduciary assets (item 10, sum of columns A and B) greater than
$250 million but less than or equal to $1 billion (as of the preceding December 31) that do not
meet the fiduciary income test for quarterly reporting must complete:
• Items 4 through 22 semiannually with the June and December reports;
• Items 23 through 26 annually with the December report;
• Memorandum item 3 semiannually with the June and December reports; and
• Memorandum items 1, 2, and 4 annually with the December report.
Institutions with total fiduciary assets (item 10, sum of columns A and B) of less than or equal
to $250 million (as of the preceding December 31) that do not meet the fiduciary income test
for quarterly reporting must complete:
• Items 4 through 13 annually with the December report; and
• Memorandum items 1 through 3 annually with the December report.
In addition, institutions with total fiduciary assets greater than $100 million but less than or
equal to $250 million (as of the preceding December 31) that do not meet the fiduciary
income test for quarterly reporting must also complete Memorandum item 4 annually with the
December report.
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 reasonable 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.
Only those Individual Retirement Accounts, Keogh Plan accounts, Health Savings Accounts, and similar
accounts offered through a fiduciary business unit of the reporting institution should be reported in
Schedule RC-T. When such accounts are not offered through an institution’s fiduciary business unit, they
should not be reported in Schedule RC-T. Accounts that consist solely of deposits in the bank itself should
not be reported in Schedule RC-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., Bank A provides custody services to the trust accounts of Bank B, or Bank A provides investment
management services to the trust accounts of Bank 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
FFIEC 051
RC-T-2
(9-19)
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FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Fiduciary and Related Assets (cont.)
loan balances. As another example, an account with a real estate asset and 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 815, Derivatives and Hedging (formerly FASB
Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended), 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.
Managed Assets – Column A
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 over the assets of the account.
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.
Therefore, whether an account where investment discretion has been delegated to a registered
investment adviser, whether affiliated or unaffiliated with the reporting institution, should be reported as a
managed account depends on whether the delegation of investment authority to the registered
investment adviser was made pursuant to the exercise of investment discretion by the reporting
institution. If so, the account is deemed to be a managed account by the reporting institution. Otherwise,
the account would be a non-managed account for purposes of Schedule RC-T.
An entire account should be reported as either managed or non-managed based on the predominant
responsibility of the reporting institution.
Non-Managed Assets – Column B
Report the total market value of assets held in non-managed fiduciary accounts. An account should be
categorized as non-managed if the institution does not have investment discretion. Those accounts for
which the institution provides a menu of investment options but the ultimate selection authority remains
with the account holder or an external manager should be categorized as non-managed. For example,
an institution that offers a choice of sweep vehicles is not necessarily exercising investment discretion.
The process of narrowing investment options from a range of alternatives does not create a managed
fiduciary account for the purposes of this schedule. For example, a 401(k) employee benefit plan where
the participants select investments from a list of investment options should be reported as non-managed
for the purposes of this schedule.
FFIEC 051
RC-T-3
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Fiduciary and Related Assets (cont.)
Number of Managed Accounts – Column C
Report the total number of managed fiduciary accounts.
Number of Non-Managed Accounts – Column D
Report the total number of non-managed fiduciary accounts.
Item No.
Caption and Instructions
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
and investment advisory agency accounts, which should be reported in Schedule RC-T,
item 7. Also exclude Keogh Plan accounts, Individual Retirement Accounts (IRAs), Health
Savings Accounts, and other pension or profit-sharing plans for self-employed individuals,
which should be reported in Schedule RC-T, item 5. Personal accounts that are solely
custody or safekeeping should be reported in item 11 of this schedule.
5
Employee benefit and retirement-related trust and agency accounts:
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. Employee benefit accounts for which the institution serves as a
directed trustee should be reported as non-managed. 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 RC-T, item 11.
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. Employee benefit accounts for which the institution serves as a directed trustee
should be reported as non-managed. 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 RC-T, item 11.
5.c
Other employee benefit and retirement-related accounts. Report the market value and
number of accounts for all other employee benefit and retirement-related fiduciary accounts
in which the institution serves as trustee or agent. Include Keogh Plan accounts, Individual
Retirement Accounts, Health Savings Accounts, Medical Savings Accounts, and other
pension or profit-sharing plans for self-employed individuals. Also report the market value of
assets and the number of accounts for employee welfare benefit trusts and agencies.
Employee welfare benefit plans include plans, funds, or programs that provide medical,
surgical, or hospital care benefits; benefits in the event of sickness, accident, disability, death,
or unemployment; vacation benefits; apprenticeship or other training programs; day care
centers; scholarship funds; or prepaid legal services. Employee benefit accounts for which
the institution serves as a directed trustee should be reported as non-managed. Exclude
accounts, originated by fiduciary or non-fiduciary personnel, that are only permitted
FFIEC 051
RC-T-4
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Item No.
Caption and Instructions
5.c
(cont.)
to be invested in own-bank deposits. The number of accounts reported should reflect the
total number of plans or accounts administered rather than the number of plan participants.
Other retirement accounts that are solely custody and safekeeping accounts should be
reported in Schedule RC-T, item 11. Individual Retirement Accounts, Health Savings
Accounts, and other similar accounts should also be reported in Schedule RC-T, item 13.
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 RC-T, item 11.
7
Investment management and investment advisory agency accounts. Report the market
value and number of accounts for all individual and institutional investment management and
investment advisory agency accounts that are administered within the fiduciary area of the
institution. Investment management accounts are those agency accounts for which the
institution has investment discretion; however, title to the assets remains with the client.
Include accounts for which the institution serves as a sub-advisor. Investment advisory
accounts are those agency accounts for which the institution provides investment advice for a
fee, but for which some other person is responsible for investment decisions. Investment
management agency accounts should be reported as managed. Investment advisory agency
accounts should be reported as non-managed. Investment management and investment
advisory agency accounts maintained for foundations and endowments should be reported in
Schedule RC-T, item 8. Exclude investment management and investment advisory agency
accounts that are administered in SEC-registered investment advisory subsidiaries of the
bank. 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.
8
Foundation and endowment trust and agency accounts. Report the market value and
number of accounts for all foundations and endowments (whether established by individuals,
families, corporations, or other entities) that file any version of Form 990 with the Internal
Revenue Service and for which the institution serves as either trustee or agent. Also include
those foundations and endowments that do not file Form 990, 990EZ, or 990PF solely
because the organization’s gross receipts or total assets fall below reporting thresholds, but
would otherwise be required to file. Foundations and endowments established by churches,
which are exempt from filing Form 990, should also be included in this item. Employee
benefit accounts maintained for a foundation’s or endowment’s employees should be
reported in Schedule RC-T, item 5. Accounts that are solely custodial or safekeeping should
be reported in Schedule RC-T, item 11.
9
Other fiduciary accounts. Report the market value and number of accounts for all other
trusts and agencies not reported in Schedule RC-T, items 4 through 8. Custody and
safekeeping accounts should be reported in Schedule RC-T, item 11.
10
Total fiduciary accounts. Report the sum of items 4 through 9.
FFIEC 051
RC-T-5
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
Item No.
11
RC-T – FIDUCIARY AND RELATED SERVICES
Caption and Instructions
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. Individual Retirement Accounts, Health Savings Accounts, and
other similar accounts should also be reported in Schedule RC-T, item 13.
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 RC-T, items 4 through 9 and 11.
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 commercial bank services such as hold-in-custody
repurchase 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.
12
Not applicable.
13
Individual Retirement Accounts, Health Savings Accounts, and other similar accounts.
Report the market value and number of Individual Retirement Accounts, Health Savings
Accounts, and other similar accounts included in Schedule RC-T, items 5.c and 11. Other
similar accounts include Roth IRAs, Coverdell Education Savings Accounts, and Archer
Medical Savings Accounts. Exclude Keogh Plan accounts.
Fiduciary and Related Services Income
The income categories in Schedule RC-T, items 14 through 20, correspond to the fiduciary asset
categories described in Schedule RC-T, items 4 through 11, above. For a detailed definition of the
categories, please refer to the corresponding account descriptions. Income and expenses should be
reported on an accrual basis. Institutions may report income and expense accounts on a cash basis if the
results would not materially differ from those obtained using an accrual basis. For report dates through
December 31, 2008, the information reported in Schedule RC-T on fiduciary and related services income
(except total gross fiduciary and related services income) will not be made available to the public on an
individual institution basis. Beginning with the March 31, 2009, report date, all of the information reported
in Schedule RC-T for each bank will be publicly available.
FFIEC 051
RC-T-6
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Fiduciary and Related Services Income (cont.)
Fiduciary and related services income should be reported on a gross basis in Schedule RC-T, items 14
through 22. Net fiduciary settlements, surcharges, and other losses should be reported on a net basis in
Schedule RC-T, item 24, and in Schedule RI, item 7.d, “Other noninterest expense.” Net losses are gross
losses less recoveries (including those from insurance payments). If the institution enters into a “fee
reduction” or “fee waiver” agreement with a client as the method for reimbursing or compensating the
client for a loss on the client’s fiduciary or related services account arising from an error, misfeasance, or
malfeasance, the full amount of this loss must be recognized on an accrual basis and included in
Schedule RC-T, item 24, and in the appropriate subitem and column of Schedule RC-T, Memorandum
item 4. An institution should not report such a loss as a reduction of the gross income from fiduciary and
related services it reports in Schedule RC-T, items 14 through 22, and Schedule RI, item 5.a, “Income
from fiduciary activities,” in the current or future periods when the “fee reduction” or “fee waiver” takes
place. (See the example after the instructions to Schedule RC-T, Memorandum item 4.e.)
Item No.
Caption and Instructions
14
Personal trust and agency accounts. Report gross income generated from personal trust
and agency accounts as defined for item 4 of this schedule.
15
Employee benefit and retirement-related trust and agency accounts:
15.a
Employee benefit – defined contribution. Report gross income generated from defined
contribution employee benefit trust and agency accounts as defined for item 5.a of this
schedule.
15.b
Employee benefit – defined benefit. Report gross income generated from defined benefit
employee benefit trust and agency accounts as defined for item 5.b of this schedule.
15.c
Other employee benefit and retirement-related accounts. Report gross income
generated from other employee benefit and retirement-related accounts as defined for
item 5.c of this schedule.
16
Corporate trust and agency accounts. Report gross income generated from corporate
trust and agency relationships as defined for item 6 of this schedule.
17
Investment management and investment advisory agency accounts. Report gross
income generated from investment management and investment advisory agency accounts
as defined for item 7 of this schedule. Also include income generated from investment
advisory activities when the assets are not held by the institution.
18
Foundation and endowment trust and agency accounts. Report gross income generated
from foundation and endowment trust and agency accounts as defined for item 8 of this
schedule.
19
Other fiduciary accounts. Report gross income generated from other trust and agency
accounts as defined for item 9 of this schedule.
20
Custody and safekeeping accounts. Report gross income generated from custody and
safekeeping agency accounts as defined for item 11 of this schedule.
FFIEC 051
RC-T-7
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
Item No.
RC-T – FIDUCIARY AND RELATED SERVICES
Caption and Instructions
21
Other fiduciary and related services income. Report all other gross fiduciary related
income that cannot properly be reported in Schedule RC-T, items 14 through item 20, above.
Include income received from others (including affiliates) for fiduciary and related services
provided by the institution. Income received from investment advisory services in which the
account assets are held in a custody or safekeeping account at the reporting institution
should be reported in item 17 of this schedule. Also include net income generated from
securities lending activities (i.e., after broker rebates and income paid to lending accounts).
Include income from custodial activities for land trusts and mortgage-backed securities.
Exclude allocations of income to the trust department from other areas of the institution such
as credits for fiduciary cash held as a deposit in the commercial bank.
22
Total gross fiduciary and related services income. Report the sum of items 14
through 21. This item must equal Schedule RI, item 5.a, “Income from fiduciary activities.”
23
Less: Expenses. Report total direct and indirect expenses attributable to the fiduciary and
related services reported in this schedule. Include salaries, wages, bonuses, incentive pay,
and employee benefits for employees assigned to reportable activities. If only a portion of
their time is allocated to reportable activities, report that proportional share of their salaries
and employee benefits. Include direct expenses related to the use of premises, furniture,
fixtures, and equipment, as well as depreciation/amortization, ordinary repairs and
maintenance, service or maintenance contracts, utilities, lease or rental payments, insurance
coverage, and real estate and other property taxes if they are directly chargeable to the
reportable activities. Income taxes attributable to reportable activity earnings should not be
included. Also exclude settlements, surcharges, and other losses, which are to be reported
in Schedule RC-T, item 24.
Include indirect expenses charged to the department or function offering reportable activities
by other departments or functions of the institution as reflected in the institution's internal
management accounting system. Include proportional shares of corporate expenses that
cannot be directly charged to particular departments or functions. Examples of indirect
expenses include such items as audit and examination fees, marketing, charitable
contributions, customer parking, holding company overhead, proportional share of building
rent or depreciation, utilities, real estate taxes, insurance, human resources, corporate
planning, and corporate financial staff. Reporting methods for indirect expenses should
remain consistent from period to period.
24
Less: Net losses from fiduciary and related services. Report net losses resulting from
fiduciary and related services. Net losses are gross losses less recoveries. Gross losses
include settlements, surcharges, and other losses arising from errors, misfeasance, or
malfeasance on fiduciary and related services accounts and should reflect losses recognized
on an accrual basis. Recoveries may be for current or prior years’ losses and should be
reported when payment is actually realized. This item must equal Schedule RC-T,
Memorandum item 4.e, sum of columns A and B minus column C. For further information,
see the instruction to Schedule RC-T, Memorandum item 4.
25
Plus: Intracompany income credits for fiduciary and related services. If applicable to
the reporting institution, report credits from other areas of the institution for activities
reportable in this schedule. Include intracompany income credit made available to the
fiduciary area for fiduciary account holdings of own-bank deposits. Also include credits for
other intracompany services and transactions.
26
Net fiduciary and related services income. Report the total from item 22 less the amounts
reported in item 23 and item 24 plus the amount reported in item 25.
FFIEC 051
RC-T-8
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Memoranda
Item No.
1
Caption and Instructions
Managed assets held in fiduciary accounts.
Column Instructions for Memorandum items 1.a through 1.p:
Column A, Personal Trust and Agency and Investment Management Agency Accounts:
Report the market value of managed assets held in (a) personal trust and agency accounts
as defined for item 4 of this schedule and (b) investment management agency accounts as
defined for item 7 of this schedule.
Column B, Employee Benefit and Retirement-Related Trust and Agency Accounts:
Report the market value of managed assets held in employee benefit and retirement-related
trust and agency accounts as defined for items 5.a, 5.b, and 5.c of this schedule.
Column C, All Other Accounts: Report the market value of managed assets held in
(a) corporate trust and agency accounts as defined for item 6 of this schedule, (b) foundation
and endowment trust and agency accounts as defined for item 8 of this schedule, and
(c) other fiduciary accounts as defined for item 9 of this schedule.
Report in the appropriate column and in the appropriate subitem the market value of all
managed assets held in the fiduciary accounts included in Schedule RC-T, items 4 through 9,
column A. For units in common trust funds and collective investment funds that are held by a
managed fiduciary account, report the market value of the units in Schedule RC-T,
Memorandum item 1.h. Do not allocate the underlying assets of each common trust fund and
collective investment fund attributable to managed accounts to the individual subitems for the
various types of assets reported in Schedule RC-T, Memorandum item 1.
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.
1.a
Noninterest-bearing deposits. Report all noninterest-bearing deposits. Report
noninterest-bearing deposits of both principal and income cash.
1.b
Interest-bearing deposits. Report all interest-bearing savings and time deposits. Include
NOW accounts, MMDA accounts, "BICs" (bank investment contracts) that are insured by the
FDIC, and certificates of deposit. Report interest-bearing deposits of both principal and
income cash.
1.c
U.S. Treasury 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 FHAapproved 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.
FFIEC 051
RC-T-9
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Memoranda
Item No.
Caption and Instructions
1.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 funds in Schedule RC-T, Memorandum item 1.e.
1.e
Money market mutual funds. Report all holdings of mutual funds registered under the
Investment Company Act of 1940 that 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.
1.f
Equity mutual funds. Report all holdings of mutual funds registered under the Investment
Company Act of 1940, exchange traded funds (ETFs), and unit investment trusts (UITs) that
invest primarily in equity securities. For purposes of Memorandum item 1, institutions should
categorize these investments on the basis of either the fund’s investment objective as stated
in its prospectus or the fund’s classification by a company that tracks information on these
funds such as Morningstar and Lipper. An institution’s methodology for categorizing mutual
fund, ETF, and UIT investments should be consistently applied.
1.g
Other mutual funds. Report all holdings of all other mutual funds registered under the
Investment Company Act of 1940, ETFs, and UITs. For purposes of Memorandum item 1,
institutions should categorize these investments on the basis of either the fund’s investment
objective as stated in its prospectus or the fund’s classification by a company that tracks
information on these funds such as Morningstar and Lipper. An institution’s methodology for
categorizing mutual fund, ETF, and UIT investments should be consistently applied.
1.h
Common trust funds and collective investment funds. Report all holdings of all common
trust funds and collective investment funds. Common trust funds and collective investment
funds are funds that banks are authorized to administer by Section 9.18 of the Office of the
Comptroller of the Currency’s regulations or comparable state regulations.
1.i
Other short-term obligations. Report all other short-term obligations (i.e., original
maturities of less than 1 year, or 13 months in the case of the time portion of master notes).
In addition to short-term notes, include in this item 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.
1.j
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) that are not insured by the FDIC,
and obligations of foreign governments. Also include certificates or other obligations,
however named, representing pass-through participations in pools of real estate loans when
the participation instruments are issued by financial institutions and guaranteed in whole or in
part by private guarantors. Collateralized mortgage obligations (CMOs) and real estate
mortgage investment conduits (REMICs) that are not issued by the Federal National
Mortgage Association (FNMA) ("Fannie Mae") and the Federal Home Loan Mortgage
FFIEC 051
RC-T-10
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FFIEC 051
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Memoranda
Item No.
Caption and Instructions
1.j
(cont.)
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 RC-T, Memorandum
item 1.i, above).
1.k
Investments in unregistered funds and private equity investments. Report all holdings
of funds exempt from registration under Sections 3(c)(1) or 3(c)(7) of the Investment
Company Act of 1940, for example, “hedge funds.” Report all holdings of private equity
investments exempt from registration under Securities Act of 1933 Regulation D. Private
equity investments is an asset class consisting of purchased equity securities in operating
companies that are not publicly traded on a stock exchange or otherwise registered with the
SEC under federal securities laws. Private equity-related funds are funds that invest primarily
in private equity investments. Unregistered private equity funds should be reported in this
item.
Investments in family businesses that are associated with the grantors or beneficiaries of a
fiduciary account should not be reported in this Memorandum item as a “private equity
investment.” Such investments may arise, for example, from an in-kind transfer to a fiduciary
account of securities in a closely-held family business or an increase in a fiduciary account’s
percentage ownership of an existing closely-held family business whose securities are held
in the account. Such investments should be reported in Schedule RC-T, Memorandum
item 1.o, “Miscellaneous assets.”
1.l
Other common and preferred stocks. Report all holdings of domestic and foreign
common and preferred equities, including warrants and options, but excluding investments
in unregistered funds and private equity investments (which should be reported in
Schedule RC-T, Memorandum item 1.k, above).
1.m
Real estate mortgages. Report real estate mortgages, real estate contracts, land trust
certificates, and ground rents. These assets may be reported at their unpaid balance if that
figure is a fair approximation of market value.
1.n
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. Also include investments in limited partnerships that are solely or
primarily invested in real estate.
1.o
Miscellaneous assets. Report personal notes, tangible personal property, and other
miscellaneous assets that cannot properly be reported in Schedule RC-T, Memorandum
items 1.a through 1.n, above. Crops, equipment, and livestock associated with farm
management accounts should be reported in this Memorandum item. Also include
investments in closely-held family businesses if such investments represent in-kind transfers
to a fiduciary account of securities in a closely-held family business or an increase in a
fiduciary account’s percentage ownership of an existing closely-held family business whose
securities are held in the account.
1.p
Total managed assets held in fiduciary accounts. Report the sum of Memorandum
items 1.a. through 1.o. The total reported in column A must equal the sum of
Schedule RC-T, items 4 and 7, column A. The total reported in column B must equal the sum
of Schedule RC-T, items 5.a, 5.b, and 5.c, column A. The total reported in column C must
equal the sum of Schedule RC-T, items 6, 8, and 9, column A.
FFIEC 051
RC-T-11
(3-17)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Memoranda
Item No.
Caption and Instructions
1.q
Investments of managed fiduciary accounts in advised or sponsored mutual funds.
Report in column A the market value of all managed fiduciary assets invested in mutual funds
that are sponsored by the institution or a subsidiary or affiliate of the institution or where the
institution or a subsidiary or affiliate of the institution serves as investment advisor to the fund.
Report the number of managed fiduciary accounts with assets invested in advised or
sponsored mutual funds in column B. The term "affiliate" means any company that controls,
is controlled by, or is under common control with another company, as set forth in the Bank
Holding Company Act of 1956.
2
Corporate trust and agency accounts:
2.a
Corporate and municipal trusteeships. Report in column A the total number of corporate
and municipal issues, including equities such as trust preferred securities, and asset-backed
securities for which the institution serves as trustee. Also report other debt issues, such as
unit investment trusts and private placement leases, 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 unpaid principal balance of the outstanding securities for the issues
reported in column A for which the institution serves as trustee. For zero coupon bonds,
report the final maturity amount. For trust preferred securities, report the redemption price.
Exclude assets (i.e., cash, deposits, and investments) that are being held for corporate trust
purposes; they should be reported in Schedule RC-T, item 6, above.
2.a.(1)
Issues reported in Memorandum item 2.a that are in default. Report the total number and
unpaid principal balance (final maturity amount for zero coupon bonds; redemption price for
trust preferred securities) of the issues reported in Schedule RC-T, Memorandum item 2.a,
above, that are in substantive default. A substantive default occurs when the issuer (a) fails
to make a required payment of principal or interest, defaults on a required payment into a
sinking fund, files for bankruptcy, or is declared bankrupt or insolvent, and (b) default has
been declared by the trustee. Issues should not be reported as being in substantive default
during a cure period, provided the indenture for the issue provides for a cure period. Private
placement leases where the trustee is required to delay or waive the declaration of an event
of default, unless requested in writing to make such declaration, should not be reported as
being in substantive default, provided such written request has not been made. Once a
trustee’s duties with respect to an issue in substantive default have been completed, the
issue should no longer be reported as being in default.
Do not report issues that are in technical default, for instance, if the obligor failed to provide
information or documentation to the trustee within specified time periods.
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FFIEC 051
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Memoranda
Item No.
2.b
Caption and Instructions
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, regardless of whether the transfer agent is registered with its
appropriate regulatory agency. 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 RC-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 RC-T, Memorandum item 2.a, above.
NOTE: Memorandum items 3.a through 3.h are to be completed by institutions at which the total market
value of the assets held in Collective Investment Funds (CIFs) and Common Trust Funds (CTFs)
administered by the reporting institution (Memorandum item 3.h, column B) was $1 billion or more as of
the preceding December 31. Memorandum item 3.h only is to be completed by institutions at which the
total market value of the assets held in CIFs and CTFs administered by the reporting institution
(Memorandum item 3.h, column B) was less than $1 billion as of the preceding December 31.
3
Collective investment funds and common trust funds. Report in the appropriate subitem
the number of funds and the market value of the assets held in Collective Investment Funds
(CIFs) and Common Trust Funds (CTFs) administered by the reporting institution. CIFs and
CTFs are funds that banks are authorized to administer by Section 9.18 of the Office of the
Comptroller of the Currency’s regulations or comparable state regulations. 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 that operates the CIF. Exclude mutual funds from this
section. Each CIF and CTF should be reported in the subitem that best fits the fund type.
3.a
Domestic equity. Report funds investing primarily in U.S. equities. Include funds seeking
growth, income, growth and income; U.S. index funds; and funds 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 RC-T, Memorandum item 3.g, “Specialty/Other.”
3.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.
3.c
Stock/Bond blend. Report funds investing in a combination of equity and bond investments.
Include funds with a fixed allocation along with those having the flexibility to shift assets
between stocks, bonds, and cash.
3.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 RC-T, Memorandum item 3.e, and funds that qualify as short-term
investments, which should be reported in Schedule RC-T, Memorandum item 3.f.
3.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 RC-T, Memorandum item 3.f.
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RC-T-13
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FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Memoranda
Item No.
Caption and Instructions
3.f
Short-term investments/Money market. Report funds subject to the provisions of
Section 9.18(b)(4)(ii)(B) of the Office of the Comptroller of the Currency’s regulations or
comparable state regulations that invest in short-term money market instruments. Money
market instruments may include U.S. Treasury bills, commercial paper, bankers acceptances,
and repurchase agreements. Include taxable and nontaxable funds.
3.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.
3.h
Total collective investment funds. For institutions that complete Memorandum items 3.a
through 3.g, report the sum of Memorandum items 3.a through 3.g. For all other institutions,
report the total number of funds and the total market value of the assets held in Collective
Investment Funds and Common Trust Funds administered by the reporting institution.
4
Fiduciary settlements, surcharges, and other losses. Report aggregate gross
settlements, surcharges, and other losses arising from errors, misfeasance, or malfeasance
on managed accounts in column A and on non-managed accounts in column B. For the
definitions of managed and non-managed accounts, refer to the instructions for the Fiduciary
and Related Assets section of this schedule. Gross losses should reflect losses recognized
on an accrual basis before recoveries or insurance payments. If the institution enters into a
“fee reduction” or “fee waiver” agreement with a client as the method for reimbursing or
compensating the client for a loss on the client’s fiduciary or related services account arising
from an error, misfeasance, or malfeasance, the full amount of this loss must be recognized
on an accrual basis and included in the gross losses reported in the appropriate subitem and
column of this Memorandum item 4. An institution should not report such a loss as a
reduction of the gross income from fiduciary and related services it reports in Schedule RC-T,
items 14 through 22, and Schedule RI, item 5.a, “Income from fiduciary activities,” in the
current or future periods when the “fee reduction” or “fee waiver” takes place. (See the
example after the instructions to Schedule RC-T, Memorandum item 4.e.)
Exclude contingent liabilities for fiduciary-related loss contingencies, including pending or
threatened litigation, for which a loss has not yet been recognized in accordance with
ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement No. 5,
“Accounting for Contingencies”).
Report recoveries (including those from insurance payments) in column C. Recoveries may
be for current or prior years’ losses and should be reported when payment is actually
realized. The filing of an insurance claim does not serve as support for a recovery.
For report dates through December 31, 2008, the information reported on fiduciary
settlements, surcharges, and other losses will not be made available to the public on an
individual institution basis. Beginning with the March 31, 2009, report date, all of the
information reported in Schedule RC-T for each bank will be publicly available.
4.a
Personal trust and agency accounts. Report gross losses and recoveries for personal
trust and agency accounts as defined for item 4 of this schedule.
4.b
Employee benefit and retirement-related trust and agency accounts. Report gross
losses and recoveries for employee benefit and retirement-related trust and agency accounts
as defined for item 5 of this schedule.
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RC-T-14
(6-18)
RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
RC-T – FIDUCIARY AND RELATED SERVICES
Memoranda
Item No.
Caption and Instructions
4.c
Investment management and investment advisory agency accounts. Report gross
losses and recoveries for investment management and investment advisory agency accounts
as defined for item 7 of this schedule.
4.d
Other fiduciary accounts and related services. Report gross losses and recoveries for all
other fiduciary accounts and related services that are not included in Schedule RC-T,
Memorandum items 4.a, 4.b, and 4.c, above. Include losses and recoveries from corporate
trust and agency accounts, foundation and endowment trust and agency accounts, other
fiduciary accounts, custody and safekeeping accounts, and other fiduciary related services.
4.e
Total fiduciary settlements, surcharges, and other losses. Report the sum of
Memorandum items 4.a through 4.d. The sum of columns A and B minus column C must
equal Schedule RC-T, item 24, above.
Example of “Fee Reduction” or “Fee Waiver” Agreement
Facts:
• An institution has a two-year fiduciary services agreement with a client. It charges the client’s
demand deposit account the $36,000 quarterly fee for the fiduciary services on the final business day
of each calendar quarter.
• Near the end of the first calendar quarter, the institution inadvertently processes a transaction for its
client one day later than it should have, causing a $12,000 loss to the client because of the delay in
processing.
• The delayed transaction and loss are discovered immediately before the end of the first calendar
quarter.
• The institution is responsible for this loss and must reimburse its client.
• Shortly after the end of the first calendar quarter, the institution enters into a “fee reduction” or “fee
waiver” agreement with its client that calls for the institution to reduce the quarterly fee it will charge
its client for the second calendar quarter from $36,000 to $24,000.
• The Call Report instructions state that fiduciary and related services income must be reported gross
in Schedule RC-T, items 14 through 22, and Schedule RI, item 5.a.
Question:
How and when should the institution report the $12,000 loss and the “fee reduction” or “fee waiver” for
this amount?
Response:
The institution should include the $12,000 loss in the net total fiduciary settlements, surcharges, and other
losses reported in Schedule RI, item 7.d, “Other noninterest expense,” in the first calendar quarter and
each subsequent quarter of the calendar year and, if applicable, in Schedule RC-T, item 24, and in the
appropriate subitem and column of Schedule RC-T, Memorandum item 4, in the December Call Report.
[If the $12,000 loss had been discovered in the second calendar quarter, but before the Call Report for
the first calendar quarter was submitted (rather than immediately before the end of the first calendar), the
institution should report the $12,000 loss in the Call Report for the first calendar quarter (and each
subsequent quarter of the calendar year) as described above. This reporting treatment is applicable
because information available prior to the submission of the first quarter Call Report indicates that it is
probable that a loss had been incurred as of the end of the first calendar quarter and the amount of the
loss can be reasonably estimated.]
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Example of “Fee Reduction” or “Fee Waiver” Agreement (cont.)
In the first and second calendar quarters, the institution should include $36,000 and $72,000,
respectively, in quarterly fees in the gross fiduciary and related services income reported in Schedule RI,
item 5.a, “Income from fiduciary activities,” and, if applicable, in the appropriate category of income in
Schedule RC-T, items 14 through 21, and in item 22.
Illustrative Journal Entries for This Example
Date of discovery of the loss immediately before the end of the first calendar quarter:
DR Fiduciary losses
$12,000*
CR Fiduciary reimbursements payable
$12,000**
To record the $12,000 fiduciary loss in the period incurred and the reimbursement payable to the
client (which will be affected through a “fee reduction” or “fee waiver”).
* In the first quarter Call Report, the fiduciary loss would be included in Schedule RI, item 7.d.
** In the first quarter Call Report,
this unpaid reimbursement payable would be included in
Schedule RC-G, item 4.
Final business day of the first calendar quarter:
DR Demand deposit accounts
$36,000
CR Fiduciary services income
$36,000***
To record the collection of the $36,000 gross fee for fiduciary services for the first calendar
quarter.
*** In the first quarter Call Report, this income would be included in Schedule RI, item 5.a.
Final business day of the second calendar quarter:
DR Demand deposit accounts
$24,000
DR Fiduciary reimbursements payable
$12,000
CR Fiduciary services income
$36,000****
To record the earning of the $36,000 gross fee for fiduciary services for the second calendar
quarter, the reimbursement of the client for the $12,000 fiduciary loss, and the collection of the
$24,000 net fee from the client.
**** In the second quarter Call Report, this income would be included in Schedule RI, item 5.a
(as would the $36,000 gross fee for fiduciary services from the first calendar quarter).
FFIEC 051
RC-T-16
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RC-T – FIDUCIARY AND RELATED SERVICES
FFIEC 051
SU – SUPPLEMENTAL
LINE ITEM INSTRUCTIONS FOR SCHEDULE SU
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions. See the discussion of the Organization of the Instruction Books in the General Instructions.
For purposes of these Consolidated Report of Income instructions, the Financial Accounting Standards
Board (FASB) Accounting Standards Codification is referred to as the “ASC.”
SCHEDULE SU – SUPPLEMENTAL INFORMATION
General Instructions
Schedule SU should be completed on a fully consolidated basis.
Item Instructions
Derivatives
Item No.
1
Caption and Instructions
Does the institution have any derivative contracts?
If your institution has derivative contracts, place an “X” in the box marked “Yes” and complete
items 1.a through 1.d, below.
If your institution has no derivative contracts, place an “X” in the box marked “No,” skip
items 1.a through 1.d, and go to item 2.
For purposes of this item and items 1.a through 1.d, derivative contracts include all contracts
that meet the definition of a derivative and must be accounted for in accordance with ASC
Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as amended). Include both freestanding
derivative contracts and those embedded derivatives that have been bifurcated from their
host contracts and are accounted for separately under ASC Topic 815. For further
information, see the Glossary entry for “Derivative Contracts.”
Exclude spot foreign exchange contracts, which are agreements for the immediate delivery,
usually within two business days or less (depending on market convention), of a foreign
currency at the prevailing cash market rate. Report spot foreign exchange contracts as
“Other off-balance sheet liabilities” in Schedule RC-L, item 9, subject to the existing reporting
threshold for this item.
Also exclude notional amounts for derivative contracts that have matured, but have
associated unsettled receivables or payables that are reported as assets or liabilities,
respectively, on the balance sheet as of the quarter-end report date.
In items 1.a through 1.d, an institution should report the notional amount (stated in U.S.
dollars) of each derivative contract according to both its underlying risk exposure – either as
“interest rate,” as defined below, or as “other” – and its designation as held for trading or for
purposes other than trading, also defined below. All notional amounts to be reported in
Schedule SU, items 1.a through 1.d, should be based on the notional amount definition in
U.S. generally accepted accounting principles, which states that this amount is the number of
currency units, shares, bushels, pounds, or other units specified in a derivative contract.
A contract with multiple risk characteristics should be classified based upon its predominant
risk characteristic at the origination of the derivative.
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SU-1
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FFIEC 051
SU – SUPPLEMENTAL
Item No.
Caption and Instructions
1
(cont.)
For purposes of reporting the gross notional amount of derivative contracts in Schedule SU,
items 1.a through 1.d:
(1) For futures and forward contracts, report the aggregate par value of the contracts that
have been entered into by the reporting institutions and are outstanding (i.e., open
contracts) as of the report date. Do not report the par value of financial instruments
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, offset (for futures contracts), or settled in
cash (for forward contracts). Offset is the liquidating of a purchase of futures through the
sale of an equal number of contracts of the same delivery month on the same underlying
instrument on the same exchange, or the covering of a short sale of futures through the
purchase of an equal number of contracts of the same delivery month on the same
underlying instrument on the same exchange. Forward contracts can only be terminated,
other than by receipt of the underlying asset, by agreement of both buyer and seller.
(2) For written and purchased option contracts, report the aggregate par value of the
financial instruments or commodities that the option seller (writer) has, for compensation
(such as a fee or premium), obligated itself to either purchase from or sell to the option
buyer (purchaser) under option contracts that are outstanding as of the report date.
Report the aggregate notional amount for written and purchased caps, floors, and
swaptions. For collars and corridors, report the aggregate notional amount for the
purchased portion of the contract plus the aggregate notional amount for the written
portion of the contract.
(3) For swaps, the notional amount is the underlying principal amount upon which the
exchange of interest, foreign exchange, or other income or expense is based. In those
cases where the reporting institution is acting as an intermediary, both sides of the
transaction are to be reported.
In reporting Schedule SU, items 1.a through 1.d, the notional amount or par value to be
reported for a derivative contract with a multiplier component is the contract's effective
notional amount or par value. For example, a swap contract with a stated notional amount of
$1,000,000 whose terms called for quarterly settlement of the difference between 5% and
LIBOR multiplied by 10 has an effective notional amount of $10,000,000.
All transactions within the consolidated institution should be reported on a net basis, i.e.,
intrabank transactions should not be reported in this item. No other netting of contracts is
permitted for purposes of these derivatives items. Therefore, do not net:
(1) Obligations of the reporting institution to purchase from third parties against the
institution's obligations to sell to third parties;
(2) Written options against purchased options; or
(3) Contracts subject to bilateral netting agreements.
Definitions
Futures contracts. Futures contracts represent agreements for delayed delivery of financial
instruments or commodities in which the buyer agrees to purchase and the seller agrees to
deliver, at a specified future date, a specified instrument at a specified price or yield. Futures
contracts are standardized and are traded on organized exchanges that act as the
counterparty to each contract.
Forward contracts. Forward contracts represent agreements for delayed delivery of
financial instruments or commodities in which the buyer agrees to purchase and the seller
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SU-2
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SU – SUPPLEMENTAL
FFIEC 051
SU – SUPPLEMENTAL
Item No.
Caption and Instructions
1
(cont.)
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.
Forward contracts include contracts for the purchase and sale of when-issued securities that
are not excluded from the requirements of ASC Topic 815. Report contracts for the purchase
of when-issued securities that are excluded from the requirements of ASC Topic 815 and
accounted for on a settlement-date basis as "Other off-balance sheet liabilities" in
Schedule RC-L, item 9, and contracts for the sale of when-issued securities that are excluded
from the requirements of ASC Topic 815 and accounted for on a settlement-date basis as
"Other off-balance sheet assets" in Schedule RC-L, item 10, subject to the existing reporting
thresholds for these two items.
Option contracts. Option contracts convey either the right or the obligation, depending upon
whether the reporting institution is the purchaser or the writer, respectively, to buy or sell a
financial instrument or commodity at a specified price by a specified future date. Some
options are traded on organized exchanges and are known as exchange-traded options.
Other options are written to meet the specialized needs of the counterparties to the
transaction. These customized option contracts are known as over-the- counter (OTC)
options. Thus, OTC options include all option contracts not traded on an organized
exchange.
The buyer (purchaser) of an option contract has, for compensation (such as a fee or
premium), acquired the right (or option) to sell to, or purchase from, another party some
financial instrument or commodity at a stated price on a specified future date. The seller
(writer) of the option contract has, for such compensation, become obligated to purchase or
sell the financial instrument or commodity at the option of the buyer of the contract. A put
option contract obligates the seller of the contract to purchase some financial instrument or
commodity at the option of the buyer of the contract. A call option contract obligates the
seller of the contract to sell some financial instrument or commodity at the option of the buyer
of the contract.
Option contracts also include swaptions, i.e., options to enter into a swap contract, and
contracts known as caps, floors, collars, and corridors. In addition, a reporting institution’s
commitments to lend that meet the definition of a derivative and must be accounted for in
accordance with ASC Topic 815, Derivatives and Hedging, are considered written options
and should be reported in Schedule SU, items 1.a through 1.d. All other commitments to
lend should be reported in Schedule RC-L, item 1.
Swaps. Swaps, including forward-starting swap contracts, are transactions in which two
parties agree to exchange payment streams based on a specified notional amount for a
specified period. For purposes of these reports, a swap that has an embedded early
termination option that may be exercised either at a specified date or dates before the
maturity date of the swap or during a specified period, which may be until the maturity date of
the swap, should be reported as a swap and not as an option contract.
Interest Rate Derivative Contracts. Interest rate derivative contracts are contracts whose
predominant risk characteristic is interest rate risk and are related to an interest-bearing
financial instrument or whose cash flows are determined by referencing interest rates or
another interest rate contract (e.g., an option on a futures contract to purchase a Treasury
bill). These contracts are generally used to adjust the institution's interest rate exposure or, if
the institution is an intermediary, the interest rate exposure of others. Interest rate derivative
contracts include interest rate futures, single currency interest rate swaps, basis swaps,
interest rate forwards, forward rate agreements, and interest rate options, including caps,
floors, collars, and corridors.
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FFIEC 051
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Item No.
Caption and Instructions
1
(cont.)
Interest rate derivative contracts also include:
(1) A reporting institution’s commitments (i.e., commitments that have a specific interest rate
or price, selling date, and dollar amount) to sell loans secured by 1-to-4 family residential
properties that meet the definition of a derivative contract under ASC Topic 815.
(2) A reporting institution’s commitments to lend that meet the definition of a derivative and
must be accounted for in accordance with ASC Topic 815 are considered written options
for purposes of Schedule SU, items 1.a through 1.d. All other commitments to lend
should be reported in Schedule RC-L, item 1.
Interest rate derivative contracts exclude contracts involving the exchange of one or more
foreign currencies (e.g., cross-currency swaps and currency options), which are to be
reported as foreign exchange contracts in Schedule SU, item 1.b or 1.d, as appropriate. In
addition, interest rate derivative contracts exclude contracts not involving the exchange of
foreign currency whose predominant risk characteristic is foreign exchange risk, which are
also to be reported as foreign exchange contracts in Schedule SU, item 1.b or 1.d, as
appropriate.
Examples of interest rate derivative contracts to be reported in Schedule SU, items 1.a and
1.c, include Chicago Board Options Exchange options on the 13-week Treasury bill rate and
futures on 90-day U.S. Treasury bills, 12-year GNMA pass-through securities, and 2-, 4-, 6-,
and 10-year U.S. Treasury notes.
Other Derivative Contracts. Other derivative contracts include foreign exchange contracts,
equity derivative contracts, commodity contracts, credit derivative contracts, and any other
derivative contracts not reportable as interest rate derivative contracts.
The following types of derivative contracts are to be included in Schedule SU, items 1.b
and 1.d:
(1) Foreign Exchange Contracts. Foreign exchange contracts are contracts to purchase
foreign (non-U.S.) currencies and U.S. dollar exchange in the forward market, i.e., on an
organized exchange or in an over-the-counter market, whose predominant risk
characteristic is foreign exchange risk. A purchase of U.S. dollar exchange is equivalent
to a sale of foreign currency. Foreign exchange contracts include cross-currency interest
rate swaps where there is an exchange of principal, forward foreign exchange contracts
(usually settling three or more business days from trade date), and currency futures and
currency options. All amounts are to be reported in U.S. dollar equivalent values.
Only one side of a foreign currency transaction is to be reported. In those transactions
where foreign (non-U.S.) currencies are bought or sold against U.S. dollars, report only
that side of the transaction that involves the foreign (non-U.S.) currency. For example, if
the reporting institution enters into a futures contract which obligates the institution to
purchase U.S. dollar exchange against which it sells Japanese yen, then the institution
would report (in U.S. dollar equivalent values) the amount of Japanese yen sold. In
cross-currency transactions, which involve the purchase and sale of two non-U.S.
currencies, only the purchase side is to be reported (in U.S. dollar equivalent values).
Examples of foreign exchange contracts to be reported in Schedule SU, items 1.b and
1.d, include exchange-traded options on major currencies such as the Euro, Japanese
Yen, and British Pound Sterling, options on futures contracts of major currencies, and
cross-currency interest rate swaps. A cross-currency interest rate swap is a transaction
in which two parties agree to exchange principal amounts of different currencies, usually
at the prevailing spot rate, at the inception of an agreement that lasts for a certain
FFIEC 051
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Item No.
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(cont.)
SU – SUPPLEMENTAL
Caption and Instructions
number of years. At defined intervals over the life of the swap, the counterparties
exchange payments in the different currencies based on specified rates of interest.
When the agreement matures, the principal amounts will be re-exchanged at the same
spot rate. The notional amount of a cross-currency interest rate swap is generally the
underlying principal amount upon which the exchange is based.
(2) Equity Derivative Contracts. Equity derivative contracts are contracts that have a
return, or a portion of their return, linked to the price of a particular equity or to an index of
equity prices. Examples of equity derivative contracts to be reported in Schedule SU,
items 1.b and 1.d, include futures contracts committing the reporting institution to
purchase or sell equity securities or instruments based on equity indexes such as the
Standard and Poor's 500 or the Nikkei.
The amount to be reported as the notional amount for equity derivative contracts is the
quantity, e.g., number of units, of the equity instrument or equity index contracted for
purchase or sale multiplied by the contract price of a unit.
(3) Commodity Contracts. Commodity contracts are contracts that have a return, or a
portion of their return, linked to the price of or to an index of precious metals, petroleum,
lumber, agricultural products, etc. Examples of commodity contracts to be reported in
Schedule SU, items 1.b and 1.d, include futures and forward contracts committing the
reporting institution to purchase or sell commodities such as agricultural products
(e.g., wheat, coffee), precious metals (e.g., gold, platinum), and non-ferrous metals
(e.g., copper, zinc).
The amount to be reported as the notional amount for commodity contracts is the
quantity, e.g., number of units, of the commodity or product contracted for purchase or
sale multiplied by the contract price of a unit.
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.
(4) Credit Derivative Contracts. In general, credit derivatives are arrangements that allow
one party (the “protection purchaser” or "beneficiary") to transfer the credit risk of a
"reference asset" or “reference entity” to another party (the “protection seller” or
"guarantor"). Report credit derivatives for which the reporting institution is the protection
seller as well as those for which the institution is the protection purchaser. Do not net the
notional amounts of credit derivatives with third parties on which the reporting institution
is the protection purchaser against credit derivatives with third parties on which the
reporting institution is the protection seller.
Credit linked notes are cash securities and should not be reported as credit derivatives in
Schedule SU, items 1.b and 1.d.
For tranched credit derivative transactions that relate to an index, e.g., the Dow Jones
CDX NA index, report as the notional amount the dollar amount of the tranche upon
which the reporting institution’s credit derivative cash flows are based.
Credit derivative contracts to be reported in Schedule SU, items 1.b and 1.d, include:
(a) Credit default swaps, which are contracts in which a protection seller or guarantor
(risk taker), for a fee, agrees to reimburse a protection purchaser or beneficiary (risk
hedger) for any losses that occur due to a credit event on a particular entity, called
the “reference entity.” If there is no credit default event (as defined by the derivative
contract), then the protection seller makes no payments to the protection purchaser
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Item No.
1
(cont.)
SU – SUPPLEMENTAL
Caption and Instructions
and receives only the contractually specified fee. Under standard industry definitions,
a credit event is normally defined to include bankruptcy, failure to pay, and
restructuring. Other potential credit events include obligation acceleration, obligation
default, and repudiation/moratorium.
(b) Total return swaps, which are contracts that transfer the total economic performance
of a reference asset, which includes all associated cash flows, as well as capital
appreciation or depreciation. The protection purchaser (beneficiary) receives a
floating rate of interest and any depreciation on the reference asset from the
protection seller. The protection seller (guarantor) has the opposite profile. The
protection seller receives cash flows on the reference asset, plus any appreciation,
and it pays any depreciation to the protection purchaser, plus a floating interest rate.
A total return swap may terminate upon a default of the reference asset.
(c) Credit options, which are a structure that allows investors to trade or hedge changes
in the credit quality of the reference asset. For example, in a credit spread option,
the option writer (protection seller or guarantor) assumes the obligation to purchase
or sell the reference asset at a specified “strike” spread level. The option purchaser
(protection purchaser or beneficiary) buys the right to sell the reference asset to, or
purchase it from, the option writer at the strike spread level.
(d) Any other credit derivatives not considered credit default swaps, total return swaps, or
credit options.
Designation as Held for Trading. As noted above, report each derivative contract
according to its designation as held for trading or held for purposes other than trading in
items 1.a through 1.d. Derivative contracts held for trading purposes include those used in
dealing and other trading activities. Derivative contracts used to hedge trading activities
should also be reported as held for trading.
Derivative trading activities include (a) regularly dealing in interest rate contracts, foreign
exchange contracts, equity derivative contracts, commodity contracts, credit derivative
contracts, and any other contract meeting the definition of a “derivative instrument” in, and
accounted for in accordance with, ASC Topic 815; (b) acquiring or taking positions in such
items principally for the purpose of selling in the near term or otherwise with the intent to
resell (or repurchase) in order to profit from short-term price movements; and (c) acquiring
or taking positions in such items as accommodations to customers, provided that acquiring
or taking such positions meets the definitions of “trading” and “trading purposes” in ASC
Topic 815. Derivative positions acquired or taken as accommodations to customers not
meeting the definitions of “trading” and “trading purposes” in ASC Topic 815 should be
reported as derivatives not held for trading.
The reporting institution's trading department may have entered into a derivative contract with
another department or business unit within the consolidated institution. If the trading
department has also entered into a matching contract with a counterparty outside the
consolidated institution, the contract with the outside counterparty should be designated as
held for trading or as held for purposes other than trading consistent with the contract's
designation for other financial reporting purposes.
1.a
Total gross notional amount of interest rate derivatives held for trading. Report the
total notional amount or par value of those interest rate derivative contracts that are held for
trading purposes.
1.b
Total gross notional amount of all other derivatives held for trading. Report the total
notional amount or par value of all other derivative contracts that are held for trading purposes.
FFIEC 051
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Item No.
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Caption and Instructions
1.c
Total gross notional amount of interest rate derivatives not held for trading. Report the
total notional amount or par value of those interest rate derivative contracts held for purposes
other than trading.
1.d
Total gross notional amount of all other derivatives not held for trading. Report the
total notional amount or par value of all other derivative contracts held for purposes other
than trading.
1-4 Family Residential Mortgage Banking Activities
2
For the two calendar quarters preceding the current calendar quarter, have either
the institution’s sales of 1-4 family residential mortgage loans during the quarter or
its 1-4 family residential mortgage loans held for sale or trading as of quarter-end
exceeded $10 million?
For the two calendar quarters preceding the current calendar quarter, if your institution had
either sales of 1-4 family residential mortgage loans during the quarter or 1-4 family
residential mortgage loans held for sale or trading as of quarter-end that exceeded
$10 million, place an “X” in the box marked “Yes” and complete items 2.a and 2.b, below.
For the two calendar quarters preceding the current calendar quarter, if your institution did
not have either sales of 1-4 family residential mortgage loans during the quarter or 1-4 family
residential mortgage loans held for sale or trading as of quarter-end that exceeded
$10 million, place an “X” in the box marked “No,” skip items 2.a and 2.b, and go to item 3.
For purposes of measuring and reporting on 1-4 family residential mortgage banking
activities, 1-4 family residential mortgage loans are loans that meet the definition of loans
“Secured by 1-4 family residential properties” in Schedule RC-C, Part I, item 1.c. Institutions
should include those 1-4 family residential mortgage loans that would be reportable as held
for sale in Schedule RC, item 4.a, “Loans and leases held for sale,” as well as those that
would be reportable as held for trading in Schedule RC, item 5, “Trading assets.” Open-end
1-4 family residential mortgage banking activities should be measured using the “total
commitment under the lines of credit,” which is the total amount of the lines of credit granted
to customers at the time the open-end credits were originated, not the “principal amount
funded under the lines of credit,” which is the principal balance outstanding of loans extended
under lines of credit at the sale date for loans sold during the quarter or at quarter-end for
loans held for sale or trading.
An institution must complete items 2.a and 2.b beginning with the quarter-end report date
after the second quarter in which the $10 million threshold is exceeded. For example, if the
institution’s sales of closed-end and open-end first and junior lien 1-4 family residential
mortgage loans exceeded $10 million during the quarter ended September 30, 2016, and the
institution’s closed-end and open-end first and junior lien 1-4 family residential mortgage
loans held for sale or trading exceeded $10 million as of December 31, 2016, the institution
would be required to complete items 2.a and 2.b in its March 31, 2017, Call Report.
2.a
FFIEC 051
1-4 family residential mortgage loans sold during the quarter. Report 1-4 family
residential mortgage loans sold during the calendar quarter ending on the report date. For
closed-end first and junior lien mortgage loans, report the principal amount of the 1-4 family
residential mortgage loans sold during the quarter. For open-end lines of credit secured by
1-4 family residential properties, report the total amount of open-end commitments under the
lines of credit sold during the calendar quarter.
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Item No.
Caption and Instructions
2.a
(cont.)
Include transfers of 1-4 family residential mortgage loans originated or purchased for resale
from retail or wholesale sources that have been accounted for as sales in accordance with
ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended),
i.e., those transfers where the loans are no longer included in the institution’s consolidated
total assets.
Also include all sales during the quarter of 1-4 family residential mortgage loans directly from
the institution’s loan portfolio. For further information, see the Glossary entry for “transfers of
financial assets.”
2.b
Quarter-end amount of 1-4 family residential mortgage loans held for sale or trading.
Report 1-4 family residential mortgages held for sale or trading as of the quarter-end report
date and included in Schedule RC, item 4.a, “Loans and leases held for sale,” and in
Schedule RC, item 5, “Trading assets.” Loans held for sale should be reported (a) at the
lower of cost or fair value or (b) if a fair value option has been elected, at fair value,
consistent with their presentation in Schedule RC, item 4.a. Loans held for trading should be
reported at fair value consistent with their presentation in Schedule RC, item 5. However, for
open-end lines of credit secured by 1-4 family residential properties held for sale or trading as
of quarter-end, report the total amount of open-end commitments under the lines of credit.
1-4 family residential mortgage loans held for sale or trading at quarter-end include any
mortgage loans transferred at any time from the institution’s held-for-investment loan portfolio
to a held-for-sale account or a trading account that have not been sold by quarter-end.
Fair Value Option Assets and Liabilities
3
Does the institution use a fair value option to measure any of its assets or liabilities?
If your institution has elected to report any financial instruments or servicing assets and
liabilities at fair value under a fair value option with changes in fair value recognized in
earnings, place an “X” in the box marked “Yes” and complete items 3.a through 3.d, below.
If your institution has no financial instruments or servicing assets and liabilities that it has
elected to report at fair value under a fair value option with changes in fair value recognized
in earnings, place an “X” in the box marked “No,” skip items 3.a through 3.d below, and go to
item 4.
Your institution should answer “No” if the only financial instruments that your institution
measures at fair value in the financial statements on a recurring basis are available-for-sale
securities, equity securities not held for trading and other equity investments (if your
institution has adopted FASB Accounting Standards Update No. 2016-01, which includes
provisions governing the accounting for investments in equity securities), trading assets,
trading liabilities, and derivative contracts because applicable accounting standards and
these instructions require these financial instruments to be measured at fair value in the
balance sheet at the end of each reporting period.
If your institution answered “Yes” to item 3, exclude from the amounts reported in items 3.a
through 3.d, below, the fair value of, and the net gains (losses) recognized in earnings on, the
assets and liabilities described in the preceding paragraph.
3.a
FFIEC 051
Aggregate amount of fair value option assets. Report the total fair value, as defined by
ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157, “Fair Value
Measurements”), of those financial and servicing assets your institution has elected to report
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Item No.
Caption and Instructions
3.a
(cont.)
on Schedule RC, Balance Sheet, at fair value under a fair value option with changes in fair
value recognized in earnings.
3.b
Aggregate amount of fair value option liabilities. Report the total fair value, as defined by
ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157, “Fair Value
Measurements”), of those financial and servicing liabilities your institution has elected to
report on Schedule RC, Balance Sheet, at fair value under a fair value option with changes in
fair value recognized in earnings.
3.c
Year-to-date net gains (losses) recognized in earnings on fair value option assets.
Report the total amount of pretax gains (losses) from fair value changes included in earnings
during the calendar year to date for all assets your institution has elected to account for at fair
value under a fair value option. If the amount to be reported is a net loss, report it with a
minus (-) sign. Disclosure of such gains (losses) is also required by ASC Subtopic 825-10,
Financial Instruments – Overall (formerly FASB Statement No. 159, “Fair Value Option for
Financial Assets and Financial Liabilities”) and ASC Subtopic 860-50, Transfers and
Servicing – Servicing Assets and Liabilities (formerly FASB Statement No. 156, “Accounting
for Servicing of Financial Assets”).
3.d
Year-to-date net gains (losses) recognized in earnings on fair value option liabilities.
Report the total amount of pretax gains (losses) from fair value changes included in earnings
during the calendar year to date for all liabilities accounted for at fair value under a fair value
option. If the amount to be reported is a net loss, report it with a minus (-) sign. Disclosure of
such gains (losses) is also required by ASC Subtopic 825-10, Financial Instruments – Overall
(formerly FASB Statement No. 159, “Fair Value Option for Financial Assets and Financial
Liabilities”) and ASC Subtopic 860-50, Transfers and Servicing – Servicing Assets and
Liabilities (formerly FASB Statement No. 156, “Accounting for Servicing of Financial Assets”).
Servicing, Securitization, and Asset Sale Activities
4 and 5
General Instructions
For purposes of items 4 and 5 in this schedule, the following definition is applicable.
Recourse or other seller-provided credit enhancement means an arrangement in which
the reporting institution retains, in form or in substance, any risk of credit loss directly or
indirectly associated with a transferred (sold) asset that exceeds its pro rata claim on the
asset. It also includes a representation or warranty extended by the reporting institution
when it transfers an asset, or assumed by the institution when it services a transferred asset,
that obligates the institution to absorb credit losses on the transferred asset. Such an
arrangement typically exists when an institution transfers assets and agrees to protect
purchasers or some other party, e.g., investors in securitized assets, from losses due to
default by or nonperformance of the obligor on the transferred assets or some other party.
The institution provides this protection by retaining:
(1) an interest in the transferred assets, e.g., credit-enhancing interest-only strips, “spread”
accounts, subordinated interests or securities, collateral invested amounts, and cash
collateral accounts, that absorbs losses, or
(2) an obligation to repurchase the transferred assets
in the event of a default of principal or interest on the transferred assets or any other
deficiency in the performance of the underlying obligor or some other party. Subordinated
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Item No.
Caption and Instructions
4 and 5
(cont.)
interests and subordinated securities retained by an institution when it securitizes assets
expose the institution to more than its pro rata share of loss and thus are considered a form
of credit enhancement to the securitization structure.
4
Does the institution have any assets it has sold and securitized with servicing retained
or with recourse or other seller-provided credit enhancements?
If your institution has any assets currently outstanding that it has sold and securitized with
servicing retained or with recourse or other seller-provided credit enhancements, place an “X”
in the box marked “Yes” and complete item 4.a, below.
If your institution has no assets currently outstanding that it has sold and securitized with
servicing retained or with recourse or other seller-provided credit enhancements, place an “X”
in the box marked “No,” skip item 4.a, and go to item 5.
4.a
Total outstanding principal balance of assets sold and securitized by the reporting
institution with servicing retained or with recourse or other seller-provided credit
enhancements. Report the total principal balance outstanding as of the report date of loans,
leases, and other assets which the reporting institution has sold and securitized while:
(1) retaining the right to service these assets, or
(2) when servicing has not been retained, retaining recourse or providing other sellerprovided credit enhancements to the securitization structure.
Include the amount outstanding of any credit card fees and finance charges that the reporting
institution has securitized and sold in connection with its securitization and sale of credit card
receivable balances.
Include the principal balance outstanding of loans the reporting institution has (1) pooled into
securities that have been guaranteed by the Government National Mortgage Association
(Ginnie Mae) and (2) sold with servicing rights retained.
Also include the principal balance outstanding of securitizations of small business obligations
transferred with recourse under Section 208 of the Riegle Community Development and
Regulatory Improvement Act of 1994.
Exclude the principal balance of loans underlying seller's interests owned by the reporting
institution. Seller’s interest means the reporting institution’s ownership interest in loans that
have been securitized, except an interest that is a form of recourse or other seller-provided
credit enhancement.
Do not report in this item the outstanding balance of 1-4 family residential mortgages sold to
the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan
Mortgage Corporation (Freddie Mac) that the government-sponsored agency in turn
securitizes. Report 1-4 family residential mortgages sold to Fannie Mae or Freddie Mac with
recourse or other seller-provided credit enhancements in Schedule SU, item 5.a. If servicing
has been retained on closed-end 1-4 family residential mortgages sold to Fannie Mae or
Freddie Mac, report the outstanding principal balance of the mortgages in Schedule SU,
item 6.a.
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Item No.
Caption and Instructions
4.a
(cont.)
Exclude securitizations that the reporting institution has accounted for as secured borrowings
because the transactions do not meet the criteria for sale accounting under generally
accepted accounting principles. The securitized loans, leases, and other assets should
continue to be carried as assets on the reporting institution's balance sheet.
5
Does the institution have any assets it has sold with recourse or other seller-provided
credit enhancements but has not securitized?
If your institution has any assets currently outstanding that it has sold with recourse or other
seller-provided credit enhancements but has not securitized, place an “X” in the box marked
“Yes” and complete item 5.a, below.
If your institution has no assets currently outstanding that it has sold and securitized with
recourse or other seller-provided credit enhancements, place an “X” in the box marked “No,”
skip item 5.a, and go to item 6.
5.a
Total outstanding principal balance of assets sold by the reporting institution with
recourse or other seller-provided credit enhancements, but not securitized by the
reporting institution. Report the unpaid principal balance as of the report date of loans,
leases, and other assets, which the reporting institution has sold with recourse or other sellerprovided credit enhancements, but which were not securitized by the reporting institution.
Include loans, leases, and other assets that the reporting institution has sold with recourse or
other seller-provided credit enhancements to other institutions or entities, whether or not the
purchaser has securitized the loans and leases purchased from the reporting institution.
Include 1-4 family residential mortgages that the reporting institution has sold to the Federal
National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage
Corporation (Freddie Mac) with recourse or other seller-provided credit enhancements.
Include the unpaid principal balance of small business obligations the reporting institution
has transferred with recourse under Section 208 of the Riegle Community Development
and Regulatory Improvement Act of 1994, but which were not securitized by the reporting
institution.
6
Does the institution service any closed-end 1-4 family residential mortgage loans for
others or does it service more than $10 million of other financial assets for others?
If your institution either (1) services any closed-end 1-4 family residential mortgage loans for
others or (2) services more than $10 million of other financial assets for others, place an “X”
in the box marked “Yes” and complete item 6.a, below.
If your institution (1) does not service any closed-end 1-4 family residential mortgage loans
for others and (2) does not service more than $10 million of other financial assets for others,
place an “X” in the box marked “No,” skip item 6.a, and go to item 7.
6.a
FFIEC 051
Total outstanding principal balance of closed-end 1-4 family residential mortgage
loans serviced for others plus the total outstanding principal balance of other financial
assets serviced for others if more than $10 million. Report the sum of (1) the outstanding
principal balance of closed-end 1-to-4 family residential mortgage loans the reporting
institution services for others, regardless of amount, plus (2) the outstanding principal
balance of all other financial assets the reporting institution services for others, provided this
balance is more than $10 million. For purposes of reporting the outstanding principal balance
of loans serviced for others in accordance with the preceding sentence, include the servicing
of whole loans and other financial assets or only portions thereof, as is typically the case with
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Item No.
Caption and Instructions
6.a
(cont.)
loan participations. An institution should report the outstanding principal balance of assets for
which it is the contractual servicer of record without regard to any subservicing agreements
applicable to the assets.
Include (1) the principal balance of loans and other financial assets owned by others for
which the reporting institution has purchased the servicing (i.e., purchased servicing) and
(2) the principal balance of loans and other financial assets that the reporting institution has
either originated or purchased and subsequently sold, whether or not securitized, but for
which it has retained the servicing duties and responsibilities (i.e., retained servicing). If the
institution services a portion of a loan or other financial asset for one or more other parties
and owns the remaining portion of the loan or other financial asset, report only the principal
balance of the portion of the asset serviced for others.
Include the outstanding principal balance of all closed-end 1-to-4 family residential
mortgage loans (as defined for Schedule RC-C, Part I, item 1.c.(2)) that the reporting
institution services for others regardless of whether the reporting institution provides
recourse or other service-provided credit enhancements. For example, the reporting
institution should include closed-end 1-to-4 family residential mortgages serviced under
regular option contracts (i.e., with recourse) with the Federal National Mortgage
Association, serviced with recourse for the Federal Home Loan Mortgage Corporation,
and serviced with recourse under other servicing contracts.
Other serviced financial assets may include, but are not limited to, home equity lines, credit
cards, automobile loans, and loans guaranteed by the Small Business Administration.
Variable Interest Entities
7
Does the institution have any consolidated variable interest entities?
If your institution has any consolidated variable interest entities, place an “X” in the box
marked “Yes” and complete items 7.a and 7.b, below.
If your institution does not have any consolidated variable interest entities, place an “X” in the
box marked “No,” skip item items 7.a and 7.b, and go to item 8.
General Instructions
A variable interest entity (VIE), as described in ASC Topic 810, Consolidation (formerly FASB
Interpretation No.46 (revised December 2003), “Consolidation of Variable Interest Entities,”
as amended by FASB Statement No. 167, "Amendments to FASB Interpretation No. 46(R)”),
is an entity in which equity investors do not have sufficient equity at risk for that entity to
finance its activities without additional subordinated financial support or, as a group, the
holders of the equity investment at risk lack one or more of the following three characteristics:
(a) the power, through voting rights or similar rights, to direct the activities of an entity that
most significantly impact the entity’s economic performance, (b) the obligation to absorb the
expected losses of the entity, or (c) the right to receive the expected residual returns of the
entity.
Variable interests in a VIE are contractual, ownership, or other pecuniary interests in an entity
that change with changes in the fair value of the entity’s net assets exclusive of variable
interests. When an institution or other company has a variable interest or interests in a VIE,
ASC Topic 810 provides guidance for determining whether the institution or other company
must consolidate the VIE. If an institution or other company has a controlling financial
interest in a VIE, it is deemed to be the primary beneficiary of the VIE and, therefore, must
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Item No.
Caption and Instructions
7
(cont.)
consolidate the VIE. For further information, see the Glossary entry for “variable interest
entity.”
VIEs include, but are not limited to, securitization vehicles that have been created to pool and
repackage mortgages, other assets, or other credit exposures into securities that can be
transferred to investors and asset-backed commercial paper conduits that primarily issue
externally rated commercial paper backed by assets or other exposures.
Schedule SU, items 7.a and 7.b, collect aggregate information on VIEs that have been
consolidated by the reporting institution for purposes of the Consolidated Reports of
Condition and Income because the institution (or a consolidated subsidiary of the institution)
is the primary beneficiary of the VIE. Schedule SU, items 7.a and 7.b, should be completed
on a fully consolidated basis, i.e., after eliminating intercompany transactions. The asset and
liability amounts included in the total assets and total liabilities reported in Schedule SU,
items 7.a and 7.b, respectively, should be the same amounts at which these assets and
liabilities are reported on Schedule RC, Balance Sheet, e.g., held-to-maturity securities
should be reported at amortized cost and available-for-sale securities should be reported at
fair value.
7.a
Total assets of consolidated variable interest entities. Report the total amount of assets
of consolidated variable interest entities reported in Schedule RC, items 1 through 11. Loans
and leases held for investment that are included in this item should be reported net of any
allowance for loan and lease losses allocated to these loans and leases.
7.b
Total liabilities of consolidated variable interest entities. Report the total amount of
liabilities of consolidated variable interest entities reported in Schedule RC, items 14
through 20.
Credit Card Lending Specialized Items
8
Does the institution, together with affiliated institutions, have outstanding credit card
receivables that exceed $500 million as of the report date or is the institution a credit
card specialty institution as defined for Uniform Institution Performance Report
purposes?
If your institution, together with affiliated institutions, has outstanding credit card receivables
that exceed $500 million as of the report date or if it is a credit card specialty institution as
defined for Uniform Institution Performance Report purposes, place an “X” in the box marked
“Yes” and complete items 8.a through 8.d, below.
If your institution, together with affiliated institutions, does not have outstanding credit card
receivables that exceed $500 million as of the report date and it is not a credit card specialty
institution as defined for Uniform Institution Performance Report purposes, place an “X” in the
box marked “No,” skip item items 8.a through 8.d, and go to item 9.
Note: To answer item 8 with a “Yes,” an institution must meet the following criteria:
(1) Either individually or on a combined basis with its affiliated depository institutions, the
institution reports outstanding credit card receivables that exceed, in the aggregate,
$500 million as of the report date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, Part I, item 6.a;
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Item No.
Caption and Instructions
8
(cont.)
(b) Credit card receivables sold and securitized by the reporting institution with servicing
retained or with recourse or other seller-provided credit enhancements included in
Schedule SU, item 4.a; and
(c) The reporting institution’s seller’s interests in credit card receivables included as
assets in Schedule RC if not reported in Schedule RC-C, Part I, item 6.a.
(Include comparable data on credit card receivables for any affiliated depository
institutions.)
OR
(2) The institution is a credit card specialty institution as defined for purposes of the Uniform
Bank Performance Report (UBPR). According to the UBPR Users Guide, credit card
specialty institutions are currently defined as those institutions that exceed 50 percent for
the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus
Securitized and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus
Securitized and Sold Credit Cards.
8.a
Outstanding credit card fees and finance charges included in credit cards to
individuals for household, family, and other personal expenditures (retail credit cards).
Report the amount of fees and finance charges included in the amount of credit card
receivables reported in Schedule RC-C, Part I, item 6.a.
8.b
Separate valuation allowance for uncollectible retail credit card fees and finance
charges. Report the amount of any valuation allowance or contra-asset account that the
institution maintains separate from the allowance for loan and lease losses to account for
uncollectible fees and finance charges on credit cards (as defined for Schedule RC-C, Part I,
item 6.a). This item is only applicable to those institutions that maintain an allowance or
contra-asset account separate from the allowance for loan and lease losses. Do not include
in this item the amount of any valuation allowance established for impairment in retained
interests in accrued interest receivable related to securitized credit cards.
8.c
Amount of allowance for loan and lease losses attributable to retail credit card fees
and finance charges. Report in this item the amount of the allowance for loan and lease
losses that is attributable to outstanding fees and finance charges on credit cards (as defined
for Schedule RC-C, Part I, item 6.a). This amount is a component of the amount reported in
Schedule RC, item 4.c, and Schedule RI-B, Part II, item 7. Do not include in this item the
amount of any valuation allowance established for impairment in retained interests in accrued
interest receivable related to securitized credit cards.
8.d
Uncollectible retail credit card fees and finance charges reversed against year-to-date
income. Report the amount of fees and finance charges on credit cards (as defined for
Schedule RC-C, Part I, item 6.a) that the institution reversed against either interest and fee
income or a separate contra-asset account during the calendar year-to-date. Report the
amount of fees and finance charges that have been reversed on a gross basis, i.e., do not
reduce the amount of reversed fees and finance charges by recoveries of these reversed
fees and finance charges. Institutions that have not adopted FASB Accounting Standards
Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit losses, should
exclude from this item credit card fees and finance charges reported as charge-offs against
the allowance for loan and lease losses in Schedule RI-B, Part I, item 5.a, column A.
Institutions that have adopted ASU 2016-13 should exclude from this item credit card fees
and finance charges reported as charge-offs against the allowance for credit losses on loans
and leases in Schedule RI-B, Part I, item 5.a, column A.
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Item No.
SU – SUPPLEMENTAL
Caption and Instructions
FDIC Loss-Sharing Agreements
9
Does the institution have assets covered by FDIC loss-sharing agreements?
If your institution has any assets covered by FDIC loss-sharing agreements, place an “X” in
the box marked “Yes” and complete items 9.a through 9.e, below.
If your institution does not have any assets covered by FDIC loss-sharing agreements, place
an “X” in the box marked “No” and skip item items 9.a through 9.e.
Note: Under a loss-sharing agreement, the FDIC agrees to absorb a portion of the losses on
a specified pool of a failed insured depository institution’s assets in order to maximize asset
recoveries and minimize the FDIC’s losses. In general, for transactions that occurred before
April 2010, the FDIC reimburses 80 percent of losses incurred by an acquiring institution on
covered assets over a specified period of time up to a stated threshold amount, with the
acquirer absorbing 20 percent of the losses on these assets. Any losses above the stated
threshold amount are reimbursed by the FDIC at 95 percent of the losses recognized by the
acquirer. For transactions that occurred after March 2010, the FDIC generally reimburses 80
percent of the losses incurred by the acquirer on covered assets, with the acquiring institution
absorbing 20 percent.
9.a
Loans and leases covered by FDIC loss-sharing agreements. Report the balance sheet
amount of loans and leases held for sale and loans and leases held for investment included
in Schedule RC-C, Part I, items 1 through 10, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.
Do not report the “book value” of the covered loans and leases on the failed institution’s
books, which may be the amount upon which payments from the FDIC to the reporting
institution are to be based in accordance with the loss-sharing agreement.
9.b
Past due and nonaccrual loans and leases covered by FDIC loss-sharing agreements.
Report in the appropriate subitem the aggregate amount of all loans and leases covered by
loss-sharing agreements with the FDIC and reported in Schedule SU, item 9.a, that have
been included in Schedule RC-N, items 1 through 8, because they are past due 30 days or
more or are in nonaccrual status as of the report date.
9.b.(1)
Past due 30 through 89 days and still accruing. Report the amount of covered loans
and leases reported in Schedule SU, item 9.a, that are included in Schedule RC-N,
items 1 through 8, column A, because they are past due 30 days through 89 days and still
accruing as of the report date.
9.b.(2)
Past due 90 days or more and still accruing. Report the amount of covered loans
and leases reported in Schedule SU, item 9.a, that are included in Schedule RC-N,
items 1 through 8, column B, because they are past due 90 days or more and still accruing as
of the report date.
9.b.(3)
Nonaccrual. Report the amount of covered loans and leases reported in Schedule SU,
item 9.a, that are included in Schedule RC-N, items 1 through 8, column C, because they are
in nonaccrual status.
9.c
Portion of past due and nonaccrual covered loans and leases that is protected by FDIC
loss-sharing agreements. Report in the appropriate subitem the maximum amount
recoverable from the FDIC under loss-sharing agreements covering the past due and
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SU – SUPPLEMENTAL
Item No.
Caption and Instructions
9.c
(cont.)
nonaccrual loans and leases reported in Schedule SU, items 9.b.(1) through 9.b.(3), above,
beyond the amount that has already been reflected in the measurement of the reporting
institution’s indemnification asset, which represents the right to receive payments from the
FDIC under the loss-sharing agreement.
In general, the maximum amount recoverable from the FDIC on covered past due and
nonaccrual loans and leases is the amount of these loans and leases, as reported in
Schedule SU, items 9.b.(1) through 9.b.(3), multiplied by the currently applicable loss
coverage rate (e.g., 80 percent or 95 percent). This product will normally be the maximum
amount recoverable because reimbursements from the FDIC for covered losses related to
the amount by which the “book value” of a covered asset on the failed institution’s books
(which is the amount upon which payments under an FDIC loss-sharing agreement are
based) exceeds the amount at which the reporting institution reports the covered asset on
Schedule RC, Balance Sheet, should already have been taken into account in measuring the
carrying amount of the reporting institution’s loss-sharing indemnification asset, which is
reported in Schedule RC-F, item 6, “All other assets.”
9.c.(1)
Past due 30 through 89 days and still accruing. Report the maximum amount recoverable
from the FDIC under loss-sharing agreements covering the loans and leases reported in
Schedule SU, item 9.b.(1), because they are past due 30 days through 89 days and still
accruing as of the report date.
9.c.(2)
Past due 90 days or more and still accruing. Report the maximum amount recoverable
from the FDIC under loss-sharing agreements covering the loans and leases reported in
Schedule SU, item 9.b.(2), because they are past due 90 days or more and still accruing as
of the report date.
9.c.(3)
Nonaccrual. Report the maximum amount recoverable from the FDIC under loss-sharing
agreements covering loans and leases reported in Schedule SU, item 9.b.(3), because they
are in nonaccrual status.
9.d
Other real estate owned covered by FDIC loss-sharing agreements. Report the carrying
amount of other real estate owned (included in Schedule RC, item 7) acquired from failed
insured depository institutions or otherwise purchased from the FDIC that are covered by
loss-sharing agreements with the FDIC.
9.e
Portion of covered other real estate owned that is protected by FDIC loss-sharing
agreements. Report the maximum amount recoverable from the FDIC under loss-sharing
agreements covering the other real estate owned reported in Schedule SU, item 9.d, beyond
the amount that has already been reflected in the measurement of the reporting institution’s
indemnification asset, which represents the right to receive payments from the FDIC under
the loss-sharing agreement.
In general, the maximum amount recoverable from the FDIC on covered other real estate
owned is the carrying amount of the other real estate, as reported in Schedule SU, item 9.d,
multiplied by the currently applicable loss coverage rate (e.g., 80 percent or 95 percent). This
product will normally be the maximum amount recoverable because reimbursements from the
FDIC for covered losses related to the amount by which the “book value” of a covered asset
on the failed institution’s books (which is the amount upon which payments under an FDIC
loss-sharing agreement are based) exceeds the amount at which the reporting institution
reports the covered asset on Schedule RC, Balance Sheet, should already have been taken
into account in measuring the carrying amount of the reporting institution’s loss-sharing
indemnification asset, which is reported in Schedule RC-F, item 6, “All other assets.”
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FFIEC 051
NARRATIVE
OPTIONAL NARRATIVE STATEMENT
CONCERNING THE AMOUNTS REPORTED IN THE
CONSOLIDATED REPORTS OF CONDITION AND INCOME
The management of the reporting bank may, if it wishes, submit a brief narrative statement on the
amounts reported in the Consolidated Reports of Condition and Income. This optional statement will be
made available to the public, along with the publicly available data in the Consolidated Reports of
Condition and Income, in response to any request for individual bank report data. However, the
information reported in Schedule RI-E, item 2.g, and Schedule RC-C, Part I, Memorandum items 17.a and
17.b, is regarded as confidential and will not be made available to the public on an individual institution
basis. BANKS CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL
BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS
IDENTIFIED ABOVE, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE
MADE PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks
choosing not to make a statement may check the "No comment" box and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in this space such phrases as
"No statement," "Not applicable," "N/A," "No comment," and "None."
The optional statement must be entered on the sheet provided by the agencies. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement must not exceed 750
characters, including punctuation, indentation, and standard spacing between words and sentences. If
any submission should exceed 750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the bank's statement both on
agency computerized records and in computer-file releases to the public.
All information furnished by the bank in the narrative statement must be accurate and not misleading.
Appropriate efforts shall be taken by the submitting bank to ensure the statement's accuracy.
If, subsequent to the original submission, material changes are submitted for the data reported in the
Consolidated Reports of Condition and Income, the existing narrative statement will be deleted from the
files, and from disclosure; the bank, at its option, may replace it with a statement appropriate to the
amended data.
The optional narrative statement will appear in agency records and in release to the public exactly as
submitted (or amended as described in the preceding paragraph) by the management of the bank (except
for the truncation of statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
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FFIEC 051
GLOSSARY
GLOSSARY
The definitions in this Glossary apply to the Consolidated Reports of Condition and Income 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 these reports and are not intended to constitute a
comprehensive presentation on bank accounting. For purposes of this Glossary, the Financial
Accounting Standards Board (FASB) Accounting Standards Codification is referred to as the “ASC.”
Acceptances: See "bankers acceptances."
Accounting Changes: Changes in accounting principles – The accounting principles that banks have
adopted for the preparation of their Consolidated Reports of Condition and Income should be changed
only if (a) the change is required by a newly issued accounting pronouncement or (b) the bank can
justify the use of an allowable alternative accounting principle on the basis that it is preferable when
there are two or more generally accepted accounting principles for a type of event or transaction. If a
bank changes from the use of one acceptable accounting principle to one that is more preferable at
any time during the calendar year, it must report the income or expense item(s) affected by the change
for the entire year on the basis of the newly adopted accounting principle regardless of the date when
the change is actually made. However, a change from an accounting principle that is neither accepted
nor sanctioned by bank supervisors to one that is acceptable to supervisors is to be reported as a
correction of an error as discussed below.
New accounting pronouncements that are adopted by the FASB (or such other body officially
designated to establish accounting principles) generally include transition guidance on how to initially
apply the pronouncement. In general, the pronouncements require (or allow) a bank to use one of the
following approaches, collectively referred to as “retrospective application”:
•
•
Apply a different accounting principle to one or more previously issued financial statements; or
Make a cumulative-effect adjustment to retained earnings, assets, and/or liabilities at the beginning
of the period as if that principle had always been used.
Because each Consolidated Report of Income covers a single discrete period, only the second
approach under retrospective application is permitted in the Consolidated Reports of Condition and
Income. Therefore, when an accounting pronouncement requires the application of either of the
approaches under retrospective application, banks must report the effect on the amount of retained
earnings at the beginning of the year in which the new pronouncement is first adopted for purposes of
the Consolidated Reports of Condition and Income (net of applicable income taxes, if any) as a direct
adjustment to equity capital in Schedule RI-A, item 2, and describe the adjustment in Schedule RI-E,
item 4.
In the Consolidated Reports of Condition and Income in which a change in accounting principle is first
reflected, the bank is encouraged to include an explanation of the nature and reason for the change in
accounting principle in Schedule RI-E, item 7, “Other explanations,” or in the “Optional Narrative
Statement Concerning the Amounts Reported in the Reports of Condition and Income.”
Changes in accounting estimates – Accounting and the preparation of financial statements involve the
use of estimates. As more current information becomes known, estimates may be changed. In
particular, accruals are derived from estimates based on judgments about the outcome of future events
and changes in these estimates are an inherent part of accrual accounting.
Reasonable changes in accounting estimates do not require the restatement of amounts of income and
expenses and assets, liabilities, and capital reported in previously submitted Consolidated Reports of
Condition and Income. Computation of the cumulative effect of these changes is also not ordinarily
necessary. Rather, the effect of such changes is handled on a prospective basis. That is, beginning in
the period
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GLOSSARY
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GLOSSARY
Accounting Changes (cont.):
when an accounting estimate is revised, the related item of income or expense for that period is
adjusted accordingly. For example, if the bank's estimate of the remaining useful life of certain bank
equipment is increased, the remaining undepreciated cost of the equipment would be spread over its
revised remaining useful life. Similarly, immaterial accrual adjustments to items of income and
expenses, including provisions for loan and lease losses and income taxes, are considered changes in
accounting estimates and would be taken into account by adjusting the affected income and expense
accounts for the year in which the adjustments were found to be appropriate.
However, large and unusual changes in accounting estimates may be more properly treated as
constituting accounting errors, and if so, must be reported accordingly as described below.
Corrections of accounting errors – A bank may become aware of an error in a Consolidated Report of
Condition or Consolidated Report of Income after it has been submitted to the appropriate federal bank
regulatory agency through either its own or its regulator's discovery of the error. An error in the
recognition, measurement, or presentation of an event or transaction included in a report for a prior
period may result from:
•
•
•
A mathematical mistake;
A mistake in applying accounting principles; or
The oversight or misuse of facts that existed when the Consolidated Reports of Condition and
Income for prior periods were prepared.
According to SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108)
(Topic 1.N. in the Codification of Staff Accounting Bulletins), the effects of prior year errors or
misstatements (“carryover effects”) should be considered when quantifying misstatements identified in
current year financial statements. SAB 108 describes two methods for accumulating and quantifying
misstatements. These methods are referred to as the “rollover” and “iron curtain” approaches:
•
The rollover approach “quantifies a misstatement based on the amount of the error originating in
the current year income statement” only and ignores the “carryover effects” of any related prior
year misstatements. The primary weakness of the rollover approach is that it fails to consider the
effects of correcting the portion of the current year balance sheet misstatement that originated in
prior years.
•
The iron curtain approach “quantifies a misstatement based on the effects of correcting the
misstatement existing in the balance sheet at the end of the current year, irrespective of the
misstatement’s year(s) of origination.” The primary weakness of the iron curtain approach is that it
does not consider the correction of prior year misstatements in the current year financial
statements to be errors because the prior year misstatements were considered immaterial in the
year(s) of origination. Thus, there could be a material misstatement in the current year income
statement because the correction of the accumulated immaterial amounts from prior years is not
evaluated as an error.
Because of the weaknesses in these two approaches, SAB 108 states that the impact of correcting all
misstatements on current year financial statements should be accomplished by quantifying an error
under both the rollover and iron curtain approaches and by evaluating the error measured under each
approach. When either approach results in a misstatement that is material, after considering all
relevant quantitative and qualitative factors, an adjustment to the financial statements would be
required. Guidance on the consideration of all relevant factors when assessing the materiality of
misstatements is provided in SEC Staff Accounting Bulletin No. 99, Materiality (SAB 99) (Topic 1.M. in
the Codification of Staff Accounting Bulletins).
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GLOSSARY
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GLOSSARY
Accounting Changes (cont.):
For purposes of the Consolidated Reports of Condition and Income, all banks should follow the sound
accounting practices described in SAB 108 and SAB 99. Accordingly, banks should quantify the
impact of correcting misstatements, including both the carryover and reversing effects of prior year
misstatements, on their current year reports by applying both the “rollover” and “iron curtain”
approaches and evaluating the impact of the error measured under each approach. When the
misstatement that exists after recording the adjustment in the current year Consolidated Reports of
Condition and Income is material (considering all relevant quantitative and qualitative factors), the
appropriate prior year report(s) should be amended, even though such revision previously was and
continues to be immaterial to the prior year report(s). If the misstatement that exists after recording the
adjustment in the current year Consolidated Reports of Condition and Income is not material, then
amending the immaterial errors in prior year reports would not be necessary.
When a bank's primary federal bank regulatory agency determines that the bank's Consolidated
Reports of Condition and Income contain a material accounting error, the bank may be directed to file
amended condition and/or income report data for each prior period that was significantly affected by
the error. Normally, such refilings will not result in restatements of reports for periods exceeding five
years. If amended reports are not required, the bank should report the effect of such corrections on
retained earnings at the beginning of the year, net of applicable income taxes, in Schedule RI-A,
item 2, "Cumulative effect of changes in accounting principles and corrections of material accounting
errors," and in Schedule RI-E, item 4. The effect of such corrections on income and expenses since
the beginning of the year in which the error is discovered should be reflected in each affected income
and expense account on a year-to-date basis in the next quarterly Consolidated Report of Income to be
filed and not as a direct adjustment to retained earnings.
In addition, a change from an accounting principle that is neither accepted nor sanctioned by bank
supervisors to one that is acceptable to supervisors is to be reported as a correction of an error. When
such a change is implemented, the cumulative effect that applies to prior periods, calculated in the
same manner as described above for other changes in accounting principles, should be reported in
Schedule RI-A, item 2, "Cumulative effect of changes in accounting principles and corrections of
material accounting errors," and in Schedule RI-E, item 4. In most cases of this kind undertaken
voluntarily by the reporting bank in order to adopt more acceptable accounting practices, such a
change will not result in a request for amended reports for prior periods unless substantial distortions in
the bank's previously reported results are in evidence.
In the Consolidated Reports of Condition and Income in which the correction of an error is first
reflected, the bank is encouraged to include an explanation of the nature and reason for the correction
in Schedule RI-E, item 7, “Other explanations,” or in the “Optional Narrative Statement Concerning the
Amounts Reported in the Reports of Condition and Income.”
For further information on these three topics, see ASC Topic 250, Accounting Changes and Error
Corrections (formerly FASB Statement No. 154, "Accounting Changes and Error Corrections").
Accounting Errors, Corrections of: See "accounting changes."
Accounting Estimates, Changes in: See "accounting changes."
Accounting Principles, Changes in: See "accounting changes."
Accrued Interest Receivable: Accrued interest receivable is the recorded amount of interest that has
been earned in current or prior periods on interest-bearing assets that has not yet been collected.
For institutions that have not adopted ASC Topic 326, Financial Instruments–Credit Losses, refer to
the Glossary entry on “Nonaccrual Status” for the treatment of previously accrued interest. Accrued
interest receivable that is not reported elsewhere on Schedule RC, Balance Sheet, as a component of
the balance sheet amount of the associated financial asset should be reported in Schedule RC-F,
item 1, “Accrued interest receivable.”
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GLOSSARY
FFIEC 051
GLOSSARY
Accrued Interest Receivable (cont.):
For institutions that have adopted ASC Topic 326, ASC Topic 326 permits a series of accounting policy
elections related to accrued interest receivable. These elections are made upon adoption of ASC
Topic 326 and may differ by class of financing receivable or major security type. The available
accounting policy elections are:
(1) Institutions may elect to present accrued interest receivable separately from the related financial
asset. The accrued interest receivable is presented net of an allowance for credit losses (ACL), if
any. An institution that elects to present accrued interest receivable separately from the amount
reported for the related financial asset (e.g., loans, leases, debt securities, and other interestbearing assets) on Schedule RC, Balance Sheet (rather than as a component of the balance sheet
amount reported for the related financial asset), should report the accrued interest receivable in
Schedule RC-F, item 1, “Accrued interest receivable.”
(2) Institutions that charge off uncollectible accrued interest receivable in a timely manner, i.e., in
accordance with the Glossary entry for “Nonaccrual Status,” may elect, at the class of financing
receivable or the major security-type level, not to measure an ACL for accrued interest receivable.
If an institution does not make this policy election for a particular class of financing receivable or
major security type, the institution should measure an ACL on accrued interest receivable for that
class of financing receivable or major security type.
(3) An institution may make a separate policy election, at the class of financing receivable or major
security-type level, to charge off any uncollectible accrued interest receivable by reversing interest
income, recognizing credit loss expense (i.e., provision expense), or a combination of both. If an
institution reverses interest income, the institution should debit (i.e., reduce) the appropriate
category of interest income on Schedule RI, Income Statement, for the amount of uncollectible
accrued interest receivable being charged off. Furthermore, for purposes of these reports, an
institution may charge off uncollectible accrued interest receivable against an ACL by debiting
(i.e., reducing) the ACL.
See also the Glossary entries for “Allowance for Loan and Lease Losses” or “Allowance for Credit
Losses,” as applicable, “Amortized Cost Basis,” and “Nonaccrual Status.”
Accrued Interest Receivable Related to Credit Card Securitizations: In a typical credit card
securitization, an institution transfers a pool of receivables and the right to receive the future collections
of principal (credit card purchases and cash advances), finance charges, and fees on the receivables
to a trust. If a securitization transaction qualifies as a sale 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), the selling institution removes the receivables
that were sold from its reported assets and continues to carry any retained interests in the transferred
receivables on its balance sheet. The “accrued interest receivable” (AIR) asset typically consists of
the seller’s retained interest in the investor’s portion of (1) the accrued fees and finance charges that
have been billed to customer accounts, but have not yet been collected (“billed but uncollected”), and
(2) the right to finance charges that have been accrued on cardholder accounts, but have not yet been
billed (“accrued but unbilled”).
While the selling institution retains a right to the excess cash flows generated from the fees and
finance charges collected on the transferred receivables, the institution generally subordinates its right
to these cash flows to the investors in the securitization. Since investors are paid from these cash
collections before the selling institution receives the amount of AIR that is due, the seller may or may
not realize the full amount of its AIR asset.
For further information on the accounting and reporting for the AIR asset, refer to the Glossary entry for
“accrued interest receivable related to credit card securitizations” in the instructions for the FFIEC 031
and FFIEC 041 Call Reports.
FFIEC 051
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GLOSSARY
FFIEC 051
GLOSSARY
Acquisition, Development, or Construction (ADC) Arrangements: An ADC arrangement is an
arrangement in which a bank provides financing for real estate acquisition, development, or
construction purposes and participates in the expected residual profit resulting from the ultimate sale or
other use of the property. ADC arrangements should be reported as loans, real estate joint ventures,
or direct investments in real estate in accordance with ASC Subtopic 310-10, Receivables – Overall.
12 USC 29 limits the authority of national banks to hold real estate. National banks should review real
estate ADC arrangements carefully for compliance. State member banks are not authorized to invest
in real estate except with the prior approval of the Federal Reserve Board under Federal Reserve
Regulation H (12 CFR Part 208). In certain states, nonmember banks may invest in real estate.
Under the agencies’ regulatory capital rules, the term high volatility commercial real estate (HVCRE)
exposure is defined, in part, to mean a credit facility that, prior to conversion to permanent financing,
finances or has financed the acquisition, development, or construction of real property. (See §.2 of
the regulatory capital rules and the instructions for Schedule RC-R, Part II, item 4.b.) Institutions
should note that the meaning of the term ADC as used in the definition of HVCRE exposure in the
regulatory capital rules differs from the meaning of ADC arrangement for accounting purposes in
ASC Subtopic 310-10 as described above in this Glossary entry. For example, an institution’s
participation in the expected residual profit from a property is part of the accounting definition of an
ADC arrangement, but whether the institution participates in the expected residual profit is not a
consideration for purposes of determining whether a credit facility is an HVCRE exposure for regulatory
capital purposes. Thus, a loan can be treated as an HVCRE exposure for regulatory capital purposes
even though it does not provide for the institution to participate in the property’s expected residual
profit.
Agreement Corporation: See "Edge and Agreement corporation."
Allowance for Credit Losses: This entry applies to institutions that have adopted ASC Topic 326
(introduced by Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13)). Institutions that
have not adopted ASC Topic 326 should continue to refer to the Glossary entry for “allowance for loan
and lease losses.” For more information on the allowance for credit losses (ACL), institutions should
also refer to the Interagency Policy Statement on Allowances for Credit Losses issued in May 2020.
Standards for accounting for an ACL for financial assets measured at amortized cost and net
investments in leases (hereafter referred to collectively as financial assets measured at amortized
cost), as well as certain off-balance sheet credit exposures, are set forth in ASC Subtopic 326-20,
Financial Instruments–Credit Losses–Measured at Amortized Cost. For financial assets measured at
amortized cost, the ACL is a valuation account that is deducted from, or added to, the amortized cost
basis of financial assets to present the net amount expected to be collected over the contractual term
of the financial assets.
For institutions that have adopted ASC Topic 326, standards for measuring credit losses on availablefor-sale (AFS) debt securities are set forth in ASC Subtopic 326-30, Financial Instruments—Credit
Losses—Available-for-Sale Debt Securities. See the Glossary entry for “securities activities” for
guidance on allowances for credit losses on AFS debt securities.
The following sections of this Glossary entry apply to financial assets measured at amortized cost and
also to off-balance sheet credit exposures within the scope of ASC Subtopic 326-20.
Measurement – An ACL shall be established upon the origination or acquisition of a financial asset(s)
measured at amortized cost. A separate ACL shall be reported for each type of financial asset
measured at amortized cost (e.g., loans and leases held for investment, held-to-maturity (HTM) debt
securities, and receivables that relate to repurchase agreements and securities lending agreements) as
of the end of each reporting period.
FFIEC 051
A-4a
(6-20)
GLOSSARY
FFIEC 051
GLOSSARY
Allowance for Credit Losses (cont.):
As of the end of each quarter, or more frequently if warranted, each institution must evaluate the
collectability of its financial assets measured at amortized cost, including, if applicable, any recorded
accrued interest receivable (i.e., not already reversed or charged off, as applicable), and make
adjusting entries to maintain the balance of each of the separate ACLs reported on the balance sheet
at an appropriate level.
An institution shall measure expected credit losses on a collective or pool basis when financial assets
share similar risk characteristics. If a financial asset does not share similar risk characteristics with
other assets, expected credit losses for that asset should be evaluated individually. Individually
evaluated assets should not be included in a collective assessment of expected credit losses. If a
financial asset ceases to share similar risk characteristics with other assets in its pool, it should be
moved to a different pool with assets sharing similar risk characteristics, if such a pool exists.
ASC Subtopic 326-20 does not require the use of a specific loss estimation method for purposes of
determining ACLs. Various methods may be used to estimate the expected collectibility of financial
assets measured at amortized cost, with those methods generally applied consistently over time. The
same loss estimation method does not need to be applied to all financial assets. An institution is not
precluded from selecting a different method when it determines the method will result in a better
estimate of ACLs.
ASC Subtopic 326-20 requires an institution to measure estimated expected credit losses over the
contractual term of its financial assets, considering expected prepayments. Renewals, extensions, and
modifications are excluded from the contractual term of a financial asset for purposes of estimating the
ACL unless there is a reasonable expectation of executing a troubled debt restructuring or the renewal
and extension options are part of the original or modified contract and are not unconditionally
cancellable by the institution. If such renewal or extension options are present, an institution must
evaluate the likelihood of a borrower exercising those options when determining the contractual term.
In estimating the net amount expected to be collected on financial assets measured at amortized cost,
an institution should consider the effects of past events, current conditions, and reasonable and
supportable forecasts on the collectibility of the institution’s financial assets. Under ASC Subtopic
326-20, an institution is required to use relevant forward-looking information and expectations drawn
from reasonable and supportable forecasts when estimating expected credit losses.
Expected recoveries, prior to collection, are a component of management’s estimate of the net amount
expected to be collected for a financial asset. Expected recoveries of amounts previously charged off
or expected to be charged off that are included in ACLs may not exceed the aggregate amounts
previously charged off or expected to be charged off.
Changes in the ACL – Additions to, or reductions of, the ACL to adjust its level to management’s
current estimate of expected credit losses are to be made through charges or credits to the "provision
for credit losses on financial assets" (provision) in item 4 of Schedule RI, Income Statement, except for
changes to adjust the level of the ACL for off-balance-sheet credit exposures. When available
information confirms that specific financial assets measured at amortized cost, or portions thereof, are
uncollectible, these amounts should be promptly charged off against the related ACL in the period in
which the financial assets are deemed uncollectible. Under no circumstances can expected credit
losses on financial assets measured at amortized cost be charged directly to "Retained earnings" after
the initial adoption of ASC Topic 326, for which the change from the incurred loss to the current
expected credit losses methodology is required to be recorded through a cumulative-effect adjustment
to retained earnings. This cumulative-effect adjustment is reported in Schedule RI-A, item 2,
“Cumulative effect of changes in accounting principles and corrections of material accounting errors,”
and disclosed in Schedule RI-E, item 4.a, “Effect of adoption of current expected credit losses
methodology – ASU 2016-13.”
FFIEC 051
A-4b
(6-20)
GLOSSARY
FFIEC 051
GLOSSARY
Allowance for Credit Losses (cont.):
Recoveries on financial assets measured at amortized cost represent collections on amounts that were
previously charged off against the related ACL. Recoveries shall be credited to the ACL, provided that
the total amount credited to the ACL as recoveries on a financial asset (which may include amounts
representing principal, interest, and fees) is limited to the amount previously charged off against the
ACL on that financial asset. Any amounts collected in excess of this limit should generally be
recognized as noninterest income upon collection.
Charge-Offs and Establishment of a New Amortized Cost Basis – When an institution makes a full or
partial charge-off of a financial asset measured at amortized cost that is deemed uncollectible, the
institution establishes a new cost basis for that financial asset. Consequently, once a new cost basis
has been established for a financial asset through a charge-off, this amortized cost basis may not be
directly "written up" at a later date. Reversing the previous charge-off 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. Nevertheless, as stated above, management’s
estimate of the net amount expected to be collected for a financial asset, as reflected in the related
ACL, considers expected recoveries.
If losses charged off against an ACL exceed the amount of the ACL, a provision expense sufficient to
restore the ACL to an appropriate level must be charged to a provision for credit losses on the income
statement during the reporting period in which the charge-off is recorded. An institution shall not
increase an ACL by transferring an amount from retained earnings or any segregation thereof to the
ACL.
Collateral-Dependent Financial Assets – A collateral-dependent financial asset is a financial asset for
which repayment is expected to be provided substantially through the operation or sale of the collateral
when the borrower, based on management’s assessment, is experiencing financial difficulty as of the
reporting date.
For purposes of these reports, the ACL for a collateral-dependent loan is measured using the fair value
of collateral, regardless of whether foreclosure is probable. This application of this requirement for
purposes of these reports is limited to collateral-dependent loans; it does not apply to other financial
assets such as held-to-maturity debt securities that are collateral dependent.
When estimating the ACL for a collateral-dependent loan, the fair value of collateral should be adjusted
to consider estimated costs to sell if repayment or satisfaction of the loan depends on the sale of the
collateral. ACL adjustments for estimated costs to sell are not appropriate when the repayment of a
collateral-dependent loan is expected from the operation of the collateral.
The fair value of collateral securing a collateral-dependent loan may change over time. If the fair value
of the collateral as of the ACL evaluation date has decreased since the previous ACL evaluation date,
the ACL should be increased to reflect the additional decrease in the fair value of the collateral.
Likewise, if the fair value of the collateral has increased as of the ACL evaluation date, the increase in
the fair value of the collateral is reflected through a reduction in the ACL. Any negative ACL that
results is capped at the amount previously charged off. In general, any portion of the amortized cost
basis in excess of the fair value of collateral less estimated costs to sell, if applicable, that can be
identified as uncollectible should be promptly charged off against the ACL.
Financial Assets with Collateral Maintenance Agreements – Institutions may have financial assets that
are secured by collateral (such as debt securities) and are subject to collateral maintenance
agreements requiring the borrower to continuously replenish the amount of collateral securing the
asset. If the fair value of the collateral declines, the borrower is required to provide additional collateral
as specified by the agreement.
FFIEC 051
A-4c
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Allowance for Credit Losses (cont.):
ASC Topic 326 includes a practical expedient for financial assets with collateral maintenance
agreements where the borrower is required to provide collateral greater than or equal to the amortized
cost basis of the asset and is expected to continuously replenish the collateral. In those cases, the
institution may elect the collateral maintenance practical expedient and measure expected credit losses
for these qualifying assets based on the fair value of the collateral. If the fair value of the collateral is
greater than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the institution may record an ACL of zero for the financial asset when
the collateral maintenance practical expedient is applied. Similarly, if the fair value of the collateral is
less than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the ACL is limited to the difference between the fair value of the
collateral and the amortized cost basis of the asset as of the reporting date when applying the collateral
maintenance practical expedient.
Off-Balance-Sheet Credit Exposures – Each institution should also estimate, as a separate liability
account, expected credit losses for off-balance-sheet credit exposures not accounted for as insurance,
over the contractual period during which the institution is exposed to credit risk. The estimate of
expected credit losses should take into consideration the likelihood that funding will occur as well as
the amount expected to be funded over the estimated remaining contractual term of the off-balancesheet credit exposures. Off-balance sheet credit exposures include loan commitments, financial
standby letters of credit, and financial guarantees not accounted for as insurance, and other similar
instruments except for those within the scope of ASC Topic 815 on derivatives and hedging. This
separate allowance should be reported in Schedule RC-G, item 3, "Allowance for credit losses on offbalance-sheet credit exposures," not as part of the "Allowance for credit losses on loans and leases" in
Schedule RC, item 4.c. Additions to, or reductions of, the allowance for credit losses on off-balance
sheet credit exposures to adjust the balance of the allowance to an appropriate level are reported in
net income.
Institutions should not record an estimate of expected credit losses for off-balance-sheet credit
exposures that are unconditionally cancellable by the issuer. For example, for an institution that has
unfunded commitments (i.e., available credit) on credit cards, the institution should not record an
allowance for expected credit losses for unfunded commitments for which the institution has the ability
to unconditionally cancel the available line of credit. In contrast, home equity lines of credit may be
deemed unconditionally cancellable for regulatory capital purposes. However, unfunded commitments
under home equity lines of credit are not considered unconditionally cancellable by the issuer for
purposes of estimating expected credit losses under ASC Topic 326, because the lender may not
unilaterally refuse to extend credit under the commitment.
Recourse Liability Accounts – Recourse liability accounts that arise from recourse obligations for any
transfers of financial assets that are reported as sales should not be included in an ACL. These
accounts are considered separate and distinct from ACLs and from the allowance for credit losses on
off-balance sheet credit exposures. Recourse liability accounts should be reported in Schedule RC-G,
item 4, "All other liabilities."
See also the Glossary entries for “accrued interest receivable,” “amortized cost basis,” “business
combinations,” “foreclosed assets,” “loan,” “loan fees,” “nonaccrual status,” “purchased creditdeteriorated assets,” “securities activities,” “transfers of financial assets,” and “troubled debt
restructurings.”
Allowance for Loan and Lease Losses: This Glossary entry applies to institutions that have not
adopted ASC Topic 326, Financial Instruments–Credit Losses. Institutions that have adopted
ASC Topic 326 should refer to the Glossary entry for “allowance for credit losses.”
Each bank must maintain an allowance for loan and lease losses (allowance) at a level that is
appropriate to cover estimated credit losses associated with its loan and lease portfolio, i.e., loans and
leases that the bank has intent and ability to hold for the foreseeable future or until maturity or payoff.
FFIEC 051
A-4d
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Allowance for Loan and Lease Losses (cont.):
Each bank should also maintain, as a separate liability account, an allowance at a level that is
appropriate to cover estimated credit losses associated with off-balance sheet credit instruments such
as off-balance sheet loan commitments, standby letters of credit, and guarantees. This separate
allowance should be reported in Schedule RC-G, item 3, "Allowance for credit losses on off-balance
sheet credit exposures," not as part of the "Allowance for loan and lease losses" in Schedule RC,
item 4.c.
With respect to the loan and lease portfolio, the term "estimated credit losses" means an estimate of
the current amount of loans and leases that it is probable the bank will be unable to collect given facts
and circumstances as of the evaluation date. Thus, estimated credit losses represent net charge-offs
that are likely to be realized for a loan or pool of loans. These estimated credit losses should meet the
criteria for accrual of a loss contingency (i.e., through a provision to the allowance) set forth in
generally accepted accounting principles (GAAP).
As of the end of each quarter, or more frequently if warranted, the management of each bank 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), and make entries to
maintain the balance of the allowance for loan and lease losses on the balance sheet at an appropriate
level. Management must maintain reasonable records in support of their evaluations and entries.
Furthermore, each bank is responsible for ensuring that controls are in place to consistently determine
the allowance for loan and lease losses in accordance with GAAP (including ASC Subtopic 450-20,
Contingencies – Loss Contingencies (formerly FASB Statement No. 5, "Accounting for Contingencies")
and ASC Topic 310, Receivables (formerly FASB Statement No. 114, "Accounting by Creditors for
Impairment of a Loan"), the bank's stated policies and procedures, management’s best judgment and
relevant supervisory guidance.
Additions to, or reductions of, the allowance account resulting from such evaluations are to be made
through charges or credits to the "provision for loan and lease losses" (provision) in the Consolidated
Report of Income. When available information confirms that specific loans and leases, or portions
thereof, are uncollectible, these amounts should be promptly charged off against the allowance. All
charge-offs of loans and leases shall be charged directly to the allowance. Under no circumstances
can loan or lease losses be charged directly to "Retained earnings." Recoveries on loans and leases
represent collections on amounts that were previously charged off against the allowance. Recoveries
shall be credited to the allowance, provided, however, that the total amount credited to the allowance
as recoveries on an individual loan (which may include amounts representing principal, interest, and
fees) is limited to the amount previously charged off against the allowance on that loan. Any amounts
collected in excess of this limit should be recognized as income.
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") prohibits a bank from "carrying over" or creating loan loss allowances in the
initial accounting for "purchased credit-impaired loans," i.e., loans that a bank has purchased where
there is evidence of deterioration of credit quality since the origination of the loan and it is probable, at
the purchase date, that the bank will be unable to collect all contractually required payments
receivable. This prohibition applies to the purchase of an individual impaired loan, a pool or group of
impaired loans, and impaired loans acquired in a purchase business combination. However, if, upon
evaluation subsequent to acquisition, based on current information and events, it is probable that the
bank is unable to collect all cash flows expected at acquisition (plus additional cash flows expected to
be collected arising from changes in estimate after acquisition) on a purchased credit-impaired loan
(not accounted for as a debt security), the loan should be considered impaired for purposes of
establishing an allowance pursuant to ASC Subtopic 450-20 or ASC Topic 310, as appropriate. For
further information, see the Glossary entry for “purchased credit-impaired loans and debt securities.”
When a bank makes a full or partial direct write-down of a loan or lease that is uncollectible, the bank
establishes a new cost basis for the asset. Consequently, once a new cost basis has been established
FFIEC 051
A-5
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Allowance for Loan and Lease Losses (cont.):
for a loan or lease through a direct write-down, 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 bank concludes that
the prospects for recovering the charge-off have improved, regardless of whether the bank assigns a
new account number to the asset or the borrower signs a new note, is not an acceptable accounting
practice.
The allowance account must never have a debit balance. If losses charged off exceed the amount of
the allowance, a provision sufficient to restore the allowance to an appropriate level must be charged to
expense on the income statement immediately. A bank shall not increase the allowance account by
transferring an amount from undivided profits or any segregation thereof to the allowance for loan and
lease losses.
To the extent that a bank's reserve for bad debts for tax purposes is greater than or less than its
"allowance for loan and lease losses" on the balance sheet of the Consolidated Report of Condition, the
difference is referred to as a temporary difference. See the Glossary entry for "income taxes" for
guidance on how to report the tax effect of such a temporary difference.
Recourse liability accounts that arise from recourse obligations for any transfers of loans that are
reported as sales for purposes of these reports should not be included in the allowance for loan and
lease losses. These accounts are considered separate and distinct from the allowance account and
from the allowance for credit losses on off-balance sheet credit exposures. Recourse liability accounts
should be reported in Schedule RC-G, item 4, "All other liabilities."
For comprehensive guidance on the maintenance of an appropriate allowance for loan and lease losses,
banks should refer to the Interagency Policy Statement on the Allowance for Loan and Lease Losses
dated December 13, 2006. For guidance on the design and implementation of allowance methodologies
and supporting documentation practices, banks should refer to the interagency Policy Statement on
Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings
Associations, which was published on July 6, 2001. National banks should also refer to the Office of the
Comptroller of the Currency's Handbook for National Bank Examiners discussing the allowance for loan
and lease losses. Information on the application of ASC Topic 310, Receivables, to the determination of
an allowance for loan and lease losses on those loans covered by that accounting standard is provided
in the Glossary entry for "loan impairment."
For information on reporting on foreclosed and repossessed assets, see the Glossary entry for
"foreclosed assets."
Amortized Cost Basis: The amortized cost basis is the amount at which a financing receivable or
investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization
of premium, discount and net deferred fees or costs, collection of cash, write-offs,1 foreign exchange,
and fair hedge accounting adjustments.
See also the Glossary entries for “accrued interest receivable,” “loan,” “loan fees,” “nonaccrual status,”
and “securities activities.”
Applicable Income Taxes: See "income taxes."
Associated Company: See "subsidiaries."
ATS Account: See "deposits."
Bankers Acceptances: A banker's acceptance, for purposes of these reports, 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 that institution at a future date that is specified in the instrument. Funds are advanced to the
drawer of the acceptance by the discounting of the accepted draft either by the accepting bank or by
FFIEC 051
A-6
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Bankers Acceptances (cont.):
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, who has advanced
funds either by initial discount or subsequent purchase, presents the accepted draft to the accepting bank
for payment.
The accepting bank has an unconditional obligation to put the holder in funds (to pay the holder the
face amount of the draft) on presentation on the specified date. The account party (customer) has an
unconditional obligation to put the accepting bank in funds at or before the maturity date specified in
the instrument.
The following paragraphs address the reporting of bankers acceptances in the Consolidated Report of
Condition in three situations: (1) acceptances that have been executed by the reporting bank, that is,
those drafts that have been drawn on and accepted by it; (2) "participations" in acceptances, that is,
"participations" in the accepting bank's obligation to put the holder of the acceptance in funds at
maturity, or participations in the accepting bank's risk of loss in the event of default by the account
party; and (3) acceptances owned by the reporting bank, that is, those acceptances – whether
executed by the reporting bank or by others – that the bank has discounted or purchased.
(1) Acceptances executed by the reporting bank – With certain exceptions, the accepting bank must
report on its balance sheet the full amount of the acceptance in both (1) the liability item, "Other
liabilities" (Schedule RC, item 20), reflecting the accepting bank's obligation to put the holder of the
acceptance in funds at maturity, and (2) the asset item, "Other assets" (Schedule RC, item 11),
reflecting the account party's liability to put the accepting bank in funds at or before maturity. The
acceptance liability and acceptance asset must also be reported in both Schedule RC-G, item 4,
“All other liabilities,” and Schedule RC-F, item 6, “All other assets,” respectively. For further
information, including a description of the exceptions, refer to the section of the Glossary entry for
“bankers acceptances” on “Acceptances executed by the reporting bank” in the instructions for the
FFIEC 031 and FFIEC 041 Call Reports.
(2) "Participations" in acceptances1 – The existence of a participation or other agreement does not
reduce the accepting bank's obligation to honor the full amount of the acceptance at maturity nor
change the requirement for the accepting bank to report the full amount of the acceptance in the
liability and asset items described above.
The existence of such participations is not to be recorded on the balance sheet (Schedule RC) of
the accepting bank that conveys shares in its obligation, and similarly is not to be recorded on the
balance sheets (Schedule RC) of the other banks that are party to, or acquire, such participations.
However, in such cases of agreements to participate, the nonaccepting bank acquiring the
participation will report the participation in Schedule RC-R, Part II, item 17, “All other off-balance
sheet liabilities.” For further information, refer to the section of the Glossary entry for “bankers
acceptances” on “’Participations’ in acceptances” in the instructions for the FFIEC 031 and
FFIEC 041 Call Reports.
(3) Acceptances owned by the reporting bank – The treatment of acceptances owned or held by the
reporting bank (whether acquired by initial discount or subsequent purchase) depends upon
whether the acceptances are held for trading, for sale, or in portfolio and upon whether the
acceptances held have been accepted by the reporting bank or by other banks.
All acceptances held for trading by the reporting bank (whether acceptances of the reporting bank
or of other banks) are to be reported in Schedule RC, item 5, "Trading assets."
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."
FFIEC 051
A-7
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Bankers Acceptances (cont.):
The reporting bank's holdings of acceptances other than those held for trading (whether
acceptances of the reporting bank or of other banks) are to be reported in Schedule RC, item 4.a,
"Loans and leases held for sale," or in item 4.b, "Loans and leases held for investment," as
appropriate, and in Schedule RC-C, Part I, “Loans and Leases.”
In Schedule RC-C, Part I, the reporting bank's holdings of other banks' acceptances, other than
those held for trading, are to be reported in "Loans to depository institutions and acceptances of
other banks" (item 2). On the other hand, the bank's holdings of its own acceptances, other than
those held for trading, are to be reported in Schedule RC-C, Part I, according to the account party
of the draft. Thus, holdings of own acceptances for which the account parties are commercial or
industrial enterprises are to be reported in Schedule RC-C, Part I, in "Commercial and industrial
loans" (item 4); holdings of own acceptances for which the account parties are other banks (e.g., in
connection with the refinancing of another acceptance or for the financing of dollar exchange) are
to be reported in Schedule RC-C, Part I, in "Loans to depository institutions and acceptances of
other banks" (item 2); and holdings of own acceptances for which the account parties are foreign
governments or official institutions (e.g., for the financing of dollar exchange) are to be reported in
Schedule RC-C, Part I, "Other loans" (item 9.b).
The difference in treatment between holdings of own acceptances and holdings of other banks'
acceptances reflects the fact that, for other banks' acceptances, the holding bank's immediate
claim is on the accepting bank, regardless of the account party or of the purpose of the loan.
On the other hand, for its holdings of its own acceptances, the bank's immediate claim is on the
account party named in the accepted draft.
If the account party prepays its acceptance liability on an acceptance of the reporting bank that is
held by the reporting bank (in the held-for-sale account, in the loan portfolio, or as trading assets)
so as to immediately reduce its indebtedness to the reporting bank, the recording of the holding –
in "Commercial and industrial loans," "Loans to depository institutions and acceptances of other
banks," or "Trading assets," as appropriate – is reduced by the prepayment.
Bank-Owned Life Insurance: ASC Subtopic 325-30, Investments-Other – Investments in Insurance
Contracts (formerly FASB Technical Bulletin No. 85-4, Accounting for Purchases of Life Insurance, and
Emerging Issues Task Force (EITF) Issue No. 06-5, Accounting for Purchases of Life Insurance–
Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin
No. 85-4) addresses the accounting for bank-owned life insurance. According to ASC Subtopic
325-30, only the amount that could be realized under the insurance contract as of the balance sheet
date should be reported as an asset. In general, this amount is the cash surrender value reported to
the institution by the insurance carrier less any applicable surrender charges not reflected by the
insurance carrier in the reported cash surrender value, i.e., the net cash surrender value. An institution
should also consider any additional amounts included in the contractual terms of the policy in
determining the amount that could be realized under the insurance contract in accordance with
ASC Subtopic 325-30.
Because there is no right of offset, an investment in bank-owned life insurance should be reported as
an asset separately from any related deferred compensation liability.
Banks that have entered into split-dollar life insurance arrangements should follow the guidance on the
accounting for the deferred compensation and postretirement benefit aspects of such arrangements in
ASC Subtopic 715-60, Compensation-Retirement Benefits – Defined Benefit Plans-Other
Postretirement (formerly EITF Issue No. 06-4, “Accounting for Deferred Compensation and
Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” and EITF
Issue No. 06-10, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Collateral Assignment Split-Dollar Life Insurance Arrangements”). In general, in an endorsement
split-dollar arrangement, a bank owns and controls the insurance policy on the employee, whereas in a
FFIEC 051
A-8
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Bank-Owned Life Insurance (cont.):
collateral assignment split-dollar arrangement, the employee owns and controls the insurance policy.
According to ASC Subtopic 715-60, a bank should recognize a liability for the postretirement benefit
related to a split-dollar life insurance arrangement if, based on the substantive agreement with the
employee, the bank has agreed to maintain a life insurance policy during the employee's retirement or
provide the employee with a death benefit. This liability should be measured in accordance with either
ASC Topic 715, Compensation-Retirement Benefits (formerly FASB Statement No. 106, “Employers’
Accounting for Postretirement Benefits Other Than Pensions”) (if, in substance, a postretirement
benefit plan exists) or ASC Subtopic 710-10, Compensation-General – Overall (formerly Accounting
Principles Board Opinion No. 12, “Omnibus Opinion – 1967,” as amended by FASB Statement
No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”) (if the
arrangement is, in substance, an individual deferred compensation contract), and reported on the
balance sheet in Schedule RC, item 20, “Other liabilities,” and in Schedule RC-G, item 4, "All other
liabilities." In addition, for a collateral assignment split-dollar arrangement, ASC Subtopic 715-60
states that an employer such as a bank should recognize and measure an insurance asset based on
the nature and substance of the arrangement.
The amount that could be realized under bank-owned life insurance policies as of the report date
should be reported on the balance sheet in Schedule RC, item 11, “Other assets,” and in
Schedule RC-F, item 5, “Life insurance assets.” The net earnings (losses) on or the net increases
(decreases) in the bank’s life insurance assets should be reported in the income statement in
Schedule RI, item 5.l, "Other noninterest income." Alternatively, the gross earnings (losses) on or
increases (decreases) in these life insurance assets may be reported in Schedule RI, item 5.l, and the
life insurance policy expenses may be reported in Schedule RI, Item 7.d, "Other noninterest expense."
In the December report only, if the absolute value of the earnings (losses) on, or the increases
(decreases) in, the bank’s life insurance assets reported in Schedule RI, item 5.l, “Other noninterest
income,” is greater than $100,000 and exceeds 7 percent of “Other noninterest income,” this amount
should be reported in Schedule RI-E, item 1.b.
Banks, U.S. and Foreign: In the classification of banks as customers of the reporting bank, distinctions
are drawn for purposes of the Consolidated Reports of Condition and Income 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 bank, the term "United States" covers the 50 states of the United States, the
District of Columbia, Puerto Rico, and U.S. territories and possessions. (This is in contrast to the
usage with respect to the offices of the reporting bank, where U.S.-domiciled Edge and Agreement
subsidiaries and IBFs are included in "foreign" offices. Furthermore, for banks chartered and
headquartered in the 50 states of the United States and the District of Columbia, offices of the reporting
bank in Puerto Rico and U.S. territories and possessions are also included in “foreign” offices, but, for
banks chartered and headquartered in Puerto Rico and U.S. territories and possessions, offices of the
reporting bank in Puerto Rico and U.S. territories and possessions are included in “domestic” offices.)
U.S. banks – The term "U.S. banks" covers both the U.S. and foreign branches of banks chartered and
headquartered in the U.S. (including U.S.-chartered banks owned by foreigners), but excluding U.S.
branches and agencies of foreign banks. On the other hand, the term "banks in the U.S." or
"commercial banks in the U.S." (the institutional coverage of which is described in detail later in this
entry) covers the U.S. offices of U.S. banks (including their IBFs) and the U.S. branches and agencies
of foreign banks, but excludes the foreign branches of U.S. banks.
Foreign banks – Similarly, the term "foreign banks" covers all branches of banks chartered and
headquartered in foreign countries (including foreign banks owned by U.S. nationals and institutions),
including their U.S.-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.
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Banks, U.S. and Foreign (cont.):
The following table summarizes these contrasting categories of banks considered as customers as
used in the Consolidated Reports of Condition and Income ("X" indicates inclusion; no entry indicates
exclusion.)
"U.S.
banks"
U.S. branches
of U.S. banks
(including IBFs)
X
Foreign branches
of U.S. banks
X
"Commercial
banks in
the U.S."
"Banks in
foreign
countries"
X
X
Foreign branches
of foreign banks
U.S. branches and
agencies of foreign
banks
"Foreign
banks"
X
X
X
X
Commercial banks in the U.S. – The detailed institutional composition of "commercial banks in the
U.S." includes:
(1)
the U.S.-domiciled head offices and branches of:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(2)
national banks;
state-chartered commercial banks;
trust companies that perform a commercial banking business;
industrial banks;
private or unincorporated banks;
International Banking Facilities (IBFs) of U.S. banks;
Edge and Agreement corporations; and
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
commercial banks in the U.S. are branches located in foreign countries of U.S. banks.
U.S. savings and loan associations and savings banks are treated as "other depository institutions in
the U.S." for purposes of the Consolidated Reports of Condition and Income.
U.S. branches and agencies of foreign banks – U.S. branches of foreign banks include any offices or
places of business of foreign banks that are located in the United States at which deposits are
accepted. U.S. agencies of foreign banks include any offices or places of business of foreign banks
that are located in the United States at which credit balances are maintained incidental to or arising out
of the exercise of banking powers but at which deposits may not be accepted from citizens or residents
of the United States.
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Banks, U.S. and Foreign (cont.):
For purposes of the Consolidated Reports of Condition and Income, the term "U.S. branches and
agencies of foreign banks" covers:
(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
(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.
Banks in foreign countries –The institutional composition of "banks in foreign countries" includes:
(1) the foreign-domiciled head offices 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;
(c) nationalized banks not functioning either as central banks, as foreign development banks, or
as banks of issue;
(d) other similar foreign institutions that accept short-term deposits; and
(2) the foreign-domiciled branches of U.S. banks.
See also "International Banking Facility (IBF)."
Banks in Foreign Countries: See "banks, U.S. and foreign."
Bill-of-Lading Draft: See "commodity or bill-of-lading draft."
Brokered Deposits: As defined in Section 337.6(a) of the FDIC’s regulations, the term “brokered
deposit” means “any deposit that is obtained, directly or indirectly, by or through any deposit broker.”
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.
The meaning of the term “brokered deposit” depends on the meaning of the term “deposit broker.”
The term “deposit broker” is defined broadly in Section 29(g) of the Federal Deposit Insurance Act
and Section 337.6(a) of the FDIC’s regulations and means:
(1) any person engaged in the business of placing deposits, or facilitating the placement of deposits,
of third parties with insured depository institutions, or the business of placing deposits with insured
depository institutions for the purpose of selling interests in those deposits to third parties, and
(2) an agent or trustee who establishes a deposit account to facilitate a business arrangement with an
insured depository institution to use the proceeds of the account to fund a prearranged loan.
Section 337.6(a) of the FDIC’s regulations further provides that the definition of “deposit broker” is
subject to a list of exceptions. According to the list of exceptions, the following parties are not treated
as a deposit broker:
(1) an insured depository institution, with respect to funds placed with that depository institution;
(2) an employee of an insured depository institution, with respect to funds placed with the employing
depository institution;
(3) a trust department of an insured depository institution, if the trust or other fiduciary relationship in
question has not been established for the primary purpose of placing funds with insured
depository institutions;
(4) the trustee of a pension or other employee benefit plan, with respect to funds of the plan;
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Brokered Deposits (cont.):
(5) a person acting as a plan administrator or an investment adviser in connection with a pension plan
or other employee benefit plan provided that that person is performing managerial functions with
respect to the plan;
(6) the trustee of a testamentary account;
(7) the trustee of an irrevocable trust (other than a trustee who establishes a deposit account to
facilitate a business arrangement with an insured depository institution to use the proceeds of the
account to fund a prearranged loan), as long as the trust in question has not been established for
the primary purpose of placing funds with insured depository institutions;
(8) a trustee or custodian of a pension or profit-sharing plan qualified under Section 401(d) or 403(a)
of the Internal Revenue Code of 1986;
(9) an agent or nominee whose primary purpose is not the placement of funds with depository
institutions;1 or
(10) an insured depository institution acting as an intermediary or agent of a U.S. government
department or agency for a government sponsored minority or women-owned depository
institution deposit program.
Notwithstanding these ten exceptions, the term “deposit broker” (as amended on September 23, 1994,
by the Riegle Community Development and Regulatory Improvement Act of 1994) includes any insured
depository institution that is not well capitalized (as defined in Section 38 of the Federal Deposit
Insurance Act, Prompt Corrective Action), and any employee of any such institution, which engages,
directly or indirectly, in the solicitation of deposits by offering rates of interest (with respect to such
deposits) which are significantly higher than the prevailing rates of interest on deposits offered by other
insured depository institutions in such depository institution's normal market area.2 Only those deposits
accepted, renewed, or rolled over on or after June 16, 1992, in connection with this form of deposit
solicitation are to be reported as brokered deposits. For further information on the solicitation and
acceptance of brokered deposits by insured depository institutions, see Section 337.6(b) of the FDIC's
regulations.
In addition, deposit instruments of the reporting bank that are sold to brokers, dealers, or underwriters
(including both bank affiliates of the reporting bank and nonbank subsidiaries of the reporting bank's
parent holding company) who then reoffer and/or resell these deposit instruments to one or more
investors, regardless of the minimum denomination which the investor must purchase, are considered
brokered deposits.
In some cases, brokered deposits are issued in the name of the depositor whose funds have been
placed in a bank by a deposit broker. In other cases, a bank’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 exceptions from the “deposit broker”
definition in Section 29 of the Federal Deposit Insurance Act and Section 337.6(a) of the FDIC’s
regulations, these custodial accounts should be reported as brokered deposits in Schedule RC-E,
Deposit Liabilities.
1
For purposes of applying this ninth exception from the definition of deposit broker, "primary purpose" does not
mean "primary activity," but should be construed as "primary intent." Whether the “primary purpose” exception
applies should be determined based on the meaning of this exception as stated in the FDIC’s regulations and as
interpreted in the FDIC’s guidance.
2
Any deposit accepted, renewed, or rolled over by a well capitalized institution before September 23, 1994, in
connection with this form of deposit solicitation should continue to be reported as a brokered deposit as long as the
deposit remains outstanding under the terms in effect before September 23, 1994. Notwithstanding the amendment
to the "deposit broker" definition, all institutions that obtain deposits, directly or indirectly, by or through any other
deposit broker must report such funds as brokered deposits in the Consolidated Report of Condition.
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Brokered Deposits (cont.):
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 RC-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.
Section 202 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted on
May 24, 2018, amends Section 29 of the Federal Deposit Insurance Act to except a capped amount of
reciprocal deposits from treatment as, and from being reported as, brokered deposits for qualifying
institutions. The FDIC has amended its regulations to conform to the treatment of reciprocal deposits
set forth in Section 202. As defined in Section 337.6(e)(2)(v) of the FDIC’s regulations, “reciprocal
deposits” means “deposits received by an agent institution through a deposit placement network with
the same maturity (if any) and in the same aggregate amount as covered deposits placed by the agent
institution in other network member banks.” As defined in Section 327.8(q) of the FDIC’s regulations,
“brokered reciprocal deposits” are “reciprocal deposits as defined in Section 337.6(e)(2)(v) of the
FDIC’s regulations that are not excepted from an institution’s brokered deposits pursuant to
Section 337.6(e)” of the FDIC’s regulations. Brokered reciprocal deposits should be reported as
(1) brokered deposits and included in Schedule RC-E, Memorandum item 1.b, and, if applicable,
Memorandum items 1.c and 1.d, and (2) brokered reciprocal deposits and included in Schedule RC-O,
item 9 and, if applicable, item 9.a. An institution should report its total reciprocal deposits,
including any reciprocal deposits that are reported as brokered deposits, in Schedule RC-E,
Memorandum item 1.g. For further information on reciprocal deposits and brokered reciprocal
deposits, see the instructions for Schedule RC-E, Memorandum items 1.b and 1.g, and the examples
after the instructions for Schedule RC-E, Memorandum item 5.
Fully insured brokered deposits are brokered deposits (including brokered deposits that represent
retirement deposit accounts as defined in Schedule RC-O, Memorandum item 1) with balances of
$250,000 or less or with balances of more than $250,000 that have been participated out by the
deposit broker in shares of $250,000 or less. As more fully described in the instructions for
Schedule RC-E, Memorandum item 1.c, fully insured brokered deposits also include (a) certain
brokered certificates of deposit issued in $1,000 amounts under a master certificate of deposit issued
by a bank to a deposit broker in an amount that exceeds $250,000 and (b) certain brokered transaction
accounts and money market deposit accounts denominated in amounts of $0.01 and established and
maintained by the deposit broker (or its agent) as agent, custodian, or other fiduciary for the broker’s
customers.
For additional information on brokered deposits, refer to the FDIC’s “Identifying, Accepting and Reporting
Brokered Deposits: Frequently Asked Questions.”
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.
Business Combinations: The accounting and reporting standards for business combinations are set
forth in ASC Topic 805, Business Combinations (formerly FASB Statement No. 141 (revised 2007),
"Business Combinations"). ASC Topic 805 requires that all business combinations, which are defined
as the acquisition of assets and assumption of liabilities that constitute a business, be accounted for
using the acquisition method of accounting. The formation of a joint venture, the acquisition of a group
of assets that do not constitute a business, and a transfer of net assets or exchange of equity interests
between entities under common control are not considered business combinations and therefore are
not accounted for using the acquisition method of accounting.
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Business Combinations (cont.):
Acquisition method – Under the acquisition method, the acquirer in a business combination shall
measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in
the acquiree at their acquisition-date fair values (with limited exceptions specified in ASC Topic 805)
using the definition of fair value in ASC Topic 820, Fair Value Measurement (formerly FASB Statement
No. 157, “Fair Value Measurements”). The acquisition date is generally the date on which the acquirer
legally transfers the consideration, acquires the assets, and assumes the liabilities of the acquiree,
i.e., the closing date. ASC Topic 805 requires the acquirer to measure acquired receivables, including
loans, at their acquisition-date fair values. If ASC Topic 326, Financial Instruments–Credit Losses, has
not been adopted, the acquirer may not recognize a separate valuation allowance (e.g., allowance for
loan and lease losses) for the contractual cash flows that are deemed to be uncollectible as of that
date.
If ASC Topic 326 has been adopted, an institution is required to determine whether any acquired
financial assets meet the definition of a purchased credit-deteriorated (PCD) asset. For a financial
asset that meets the definition of a PCD asset, the institution applies the gross-up approach and
records the acquired financial asset at its purchase price plus acquisition-date allowance for credit
losses, which establishes the initial amortized cost basis of the PCD asset. For acquired financial
assets that are not PCD assets, the acquirer records the purchased financial assets at their acquisitiondate fair values. Additionally, for those acquired financial assets within the scope of ASC Subtopic
326-20 that are not PCD financial assets, an allowance is initially recorded with a corresponding
charge to the provision for credit losses expense in the reporting period that includes the acquisition
date. See also the Glossary entries for “allowance for credit losses” and “purchased credit-deteriorated
assets."
The consideration transferred in a business combination shall be calculated as the sum of the
acquisition-date fair values of the assets (including any cash) transferred by the acquirer, the liabilities
incurred by the acquirer to former owners of the acquiree, and the equity interests issued by the
acquirer. Acquisition-related costs are costs the acquirer incurs to effect a business combination such
as finder’s fees; advisory, legal, accounting, valuation, and other professional or consulting fees; and
general administrative costs. The acquirer shall account for acquisition-related costs as expenses in
the periods in which the costs are incurred and the services received. The cost to register and issue
debt or equity securities shall be recognized in accordance with other applicable generally accepted
accounting principles.
At the acquisition date, an acquirer generally will not have obtained all of the information necessary to
measure the fair values of the identifiable assets acquired, liabilities assumed, any noncontrolling
interest in the acquiree, and consideration transferred for the acquiree. Under ASC Topic 805, if the
initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the acquirer should report provisional amounts in its Consolidated Reports of
Condition and Income for the items for which the accounting is incomplete. Provisional amounts
should be based on the best information available. During the measurement period,1 the acquirer is
required to adjust the provisional amounts recognized at the acquisition date, with a corresponding
adjustment to goodwill, to reflect new information obtained about facts and circumstances that existed
as of the acquisition date that, if known, would have affected the measurement of the amounts
recognized as of that date. Topic 805 further requires an acquirer to recognize adjustments to
provisional amounts identified during the measurement period in the reporting period in which
adjustment amounts are determined. The acquirer also must recognize in the income statement for the
same reporting period the effect on earnings, if any, resulting from the adjustments to the provisional
1
In general, the measurement period in a business combination is the period after the acquisition date during which
the acquirer may adjust provisional amounts recognized for a business combination. The measurement period ends
as soon as the acquirer receives the information it was seeking about facts and circumstances that existed as of the
acquisition date or learns that more information is not obtainable. However, the measurement period shall not
exceed one year from the acquisition date.
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GLOSSARY
Business Combinations (cont.):
amounts as if the accounting for the business combination had been completed as of the acquisition
date. See ASC Topic 805 for additional guidance on the measurement period and adjustments to
provisional amounts during this period.
ASC Topic 805 provides guidance for recognizing particular assets acquired and liabilities assumed in
a business combination. Acquired assets may be tangible (such as securities or fixed assets) or
intangible, as discussed in the following paragraph. An acquiring entity must not recognize the
goodwill, if any, or the deferred income taxes recorded by an acquired entity before the business
combination. However, a deferred tax liability or asset must be recognized for differences between the
carrying values assigned in the business combination and the tax bases of the recognized assets
acquired and liabilities assumed, in accordance with ASC Topic 740, Income Taxes (formerly FASB
Statement No. 109, "Accounting for Income Taxes," and FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes”). (For further information, see the Glossary entry for "income taxes.")
Under ASC Topic 805, an intangible asset must be recognized separately from goodwill if it arises
from contractual or other legal rights, regardless of whether the rights are transferable or separable.
Otherwise, an intangible asset must be recognized separately from goodwill only if it is capable of
being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged
individually or together with a related contract, identifiable asset, or liability. Examples of intangible
assets that must be recognized separately from goodwill are core deposit intangibles, purchased
credit card relationships, servicing assets, favorable leasehold rights, trademarks, trade names,
internet domain names, and noncompetition agreements. However, an institution that is a private
company, as defined in U.S. GAAP, may elect the private company accounting alternative for the
recognition of certain identifiable intangible assets acquired in a business combination provided by
ASC Subtopic 805-20, Business Combinations – Identifiable Assets and Liabilities, and Any
Noncontrolling Interest, if it also has adopted the private company goodwill accounting alternative
provided by ASC Subtopic 350-20, Intangibles–Goodwill and Other – Goodwill. Intangible assets that
are recognized separately from goodwill must be reported in Schedule RC, item 10, "Intangible assets,"
and in Schedule RC-M, item 2.a or 2.c, as appropriate. Refer to the Glossary entry for “goodwill” for
further information on the private company accounting alternative for identifiable intangible assets.
See also the Glossary entries for “private company” and “public business entity.”
In general, the amount recognized as goodwill in a business combination is the excess of the sum of
the consideration transferred and the fair value of any noncontrolling interest in the acquiree over the
net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Goodwill is reported in Schedule RC, item 10, and in Schedule RC-M, item 2.b. An acquired intangible
asset that does not meet the criteria described in the preceding paragraph must be treated as goodwill.
After initial recognition, goodwill must be accounted for in accordance with ASC Topic 350, IntangiblesGoodwill and Other (formerly FASB Statement No. 142, "Goodwill and Other Intangible Assets") and
the Glossary entry for “goodwill.”
In contrast, if the total acquisition-date amount of the identifiable net assets acquired exceeds the
consideration transferred plus the fair value of any noncontrolling interest in the acquiree (i.e., a
bargain purchase), the acquirer shall reassess whether it has correctly identified all of the assets
acquired and all the liabilities assumed and shall recognize any additional assets or liabilities that are
identified in that review. If that excess remains after the review, the acquirer shall recognize that
excess in earnings as a gain attributable to the acquirer on the acquisition date and report the amount
in Schedule RI, item 5.l, "Other noninterest income."
Under the acquisition method, the historical equity capital balances of the acquired business are not to
be carried forward to the acquirer’s consolidated balance sheet. The operating results of the acquiree
are to be included in the income and expenses of the acquirer only from the acquisition date. In
addition, if the ownership interests in the acquiree were obtained in a series of purchase transactions,
the equity interest in the acquiree previously held by the acquirer is remeasured at its acquisition-date
fair value and any resulting gain or loss is recognized in the acquirer’s earnings.
FFIEC 051
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GLOSSARY
Business Combinations (cont.):
Pushdown accounting – Pushdown accounting is an acquiree’s establishment of a new accounting
basis in its separate financial statements when an acquirer obtains control of the acquired entity. On
November 18, 2014, the FASB issued ASU No. 2014-17, “Pushdown Accounting,” which amended
ASC Subtopic 805-50, Business Combinations–Related Issues, and took effect upon issuance. Under
ASU 2014-17, an acquiree (e.g., an acquired institution) that retains its separate corporate existence
may apply pushdown accounting upon a change-in-control event. A change-in-control event occurs
when an acquirer obtains a controlling financial interest, as defined by ASC Subtopic 810-10,
Consolidation–Overall (formerly Accounting Research Bulletin No. 51, “Consolidated Financial
Statements”), in the acquiree. A controlling financial interest typically requires ownership of more than
50 percent of the voting rights in an acquired entity.
An acquired institution that retains its separate corporate existence may, for purposes of its Call
Report, elect pushdown accounting in accordance with ASU 2014-17 if the change-in-control event for
the business combination occurred on or after October 1, 2014. Prior to the issuance of ASU 2014-17,
pushdown accounting for business combinations, including those involving collaborative groups, was
permitted for Call Report purposes when 80 percent or more voting control was obtained and required
when voting control was 95 percent or more. An institution acquired in a business combination before
October 1, 2014, that retained its separate legal existence should not change the pushdown treatment
applied to the acquisition because of the issuance of ASU 2014-17. It should be noted that after a
parent obtains a controlling financial interest in an entity through a business combination, any
subsequent increase in the parent’s ownership interest in the acquiree is not a change in control.
However, if a parent’s ownership becomes a noncontrolling interest and the parent later regains control
of the acquiree, the latter transaction would be a change-in-control event at which a new pushdown
election could be made in accordance with ASC Subtopic 805-50.
When an acquired institution that retains its separate corporate existence elects pushdown accounting,
it must report in its Call Report the new basis of accounting established by the acquirer under which the
acquired institution’s identifiable assets, liabilities, and noncontrolling interests are restated to their
acquisition-date fair values (with limited exceptions specified in ASC Topic 805) using the definition of
fair value in ASC Topic 820. The assets acquired, including goodwill, and liabilities assumed,
measured at their acquisition-date fair values, are reported in the Call Report balance sheet
(Schedule RC) of the acquired institution and the consolidated financial statements of the institution's
parent.
In addition, the pushdown adjusting entries must zero out the acquired institution’s retained earnings
account (Schedule RC, item 26.a). Therefore, the retained earnings of the acquired institution before
the change-in-control event will not be available for the payment of dividends after the change-incontrol event. When recording the pushdown adjusting entries, the acquired institution's common
stock account should reflect the par value of its issued common shares. The acquired institution’s
surplus (additional paid-in capital) account should represent the difference between the restated
amount of the institution’s net assets (i.e., its assets less its liabilities) and the sum of the par value of
its issued common shares and the amount of any perpetual preferred stock outstanding. The effect of
any bargain purchase gain recognized by the acquirer should be reflected in the acquisition-date
measurement of the acquired institution’s surplus (additional paid-in capital) account, not in the
acquired institution’s income statement (Schedule RI).
In the Call Report for the remainder of the year in which an acquired institution elects to apply
pushdown accounting, the institution shall report the initial increase or decrease in its equity capital that
results from the application of pushdown accounting in item 7, "Changes incident to business
combinations, net," of Schedule RI-A, Changes in Bank Equity Capital. In addition, in the year an
acquired institution elects pushdown accounting, its income statements (Schedule RI) for periods after
its acquisition should only include amounts from the acquisition date through the end of the calendar
year-to-date reporting period. No income or expense for the portion of the calendar year prior to the
date of the change-in-control event should be included in these income statements. Also, when
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Business Combinations (cont.):
pushdown accounting is elected, the acquired institution should report the date of its acquisition in
Schedule RI, Memoranda item 7, for each report date on or after the date of the change-in-control
event through the end of the calendar year in which the acquisition took place.
The agencies note that the pushdown accounting election available under ASU 2014-17 can be used
to produce a particular result in the Call Report that may not be reflective of the economic substance of
the underlying business combination. Therefore, an institution’s primary federal regulator reserves the
right to require or prohibit the institution’s use of pushdown accounting for Call Report purposes based
on the regulator’s evaluation of whether the election best reflects the facts and circumstances of the
business combination.
Transactions between entities under common control – A transaction in which net assets or equity
interests (e.g., voting shares) that constitute a business are transferred between entities under
common control is not accounted for as a business combination. The method used to account for such
transactions is similar to the pooling-of-interests method. In accordance with ASC Subtopic 805-50,
when applying a method similar to the pooling-of-interests method to a transfer of net assets or an
exchange of equity interests between entities under common control, the entity that receives the net
assets or equity interests shall initially measure the recognized assets and liabilities transferred at their
carrying amounts in the accounts of the transferring entity at the date of transfer. If the carrying
amounts of the assets and liabilities transferred differ from the historical cost of the parent of the
entities under common control, for example, because pushdown accounting had not been applied, then
the financial statements of the receiving entity shall reflect the transferred assets and liabilities at the
historical cost of the parent of the entities under common control. Consequently, and without regard to
the pushdown accounting election made by the acquiree, if a parent transfers the acquiree to another
entity under common control or merges the acquiree with another entity under common control, the
receiving entity accounts for the acquiree using the parent’s historical cost for the net assets or
equity interests in the acquiree. The parent’s historical cost includes the values of the acquiree’s
assets (including goodwill) and liabilities that were remeasured at fair value on the acquisition date
of the business combination. If there has been a change in reporting entity as defined by ASC
Subtopic 250-10, Accounting Changes and Error Corrections–Overall (formerly FASB Statement
No. 154, “Accounting Changes and Error Corrections”), for the year in which a transaction between
entities under common control occurs, income and expenses must be reported in Schedule RI,
Income Statement, as though the entities had combined at the beginning of the year. The portion of
the adjustment necessary to conform the accounting methods applicable to the current period must
also be allocated to income and expense for the period.
Call Option: See "derivative contracts."
Capital Contributions of Cash and Notes Receivable: An institution may receive cash or a note
receivable as a contribution to its equity capital. The transaction may be a sale of capital stock or
a contribution to paid-in capital (surplus), both of which are referred to hereafter as capital
contributions. The accounting for capital contributions in the form of notes receivable is set forth in
ASC Subtopic 505-10, Equity – Overall (formerly EITF Issue No. 85-1, “Classifying Notes Received
for Capital Stock”) and SEC Staff Accounting Bulletin No. 107 (Topic 4.E., Receivables from Sale
of Stock, in the Codification of Staff Accounting Bulletins). This Glossary entry does not address
other forms of capital contributions, for example, nonmonetary contributions to equity capital such
as a building.
A capital contribution of cash should be recorded in an institution’s financial statements and
Consolidated Reports of Condition and Income when received. Therefore, a capital contribution of
cash prior to a quarter-end report date should be reported as an increase in equity capital in the
institution’s reports for that quarter (in Schedule RI-A, item 5 or 11, as appropriate). A contribution of
cash after quarter-end should not be reflected as an increase in the equity capital of an earlier reporting
period.
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Capital Contributions of Cash and Notes Receivable (cont.):
When an institution receives a note receivable rather than cash as a capital contribution, ASC
Subtopic 505-10 states that it is generally not appropriate to report the note as an asset. As a
consequence, the predominant practice is to offset the note and the capital contribution in the equity
capital section of the balance sheet, i.e., the note receivable is reported as a reduction of equity capital.
In this situation, the capital stock issued or the contribution to paid-in capital should be reported in
Schedule RC, item 23, 24, or 25, as appropriate, and the note receivable should be reported as a
deduction from equity capital in Schedule RC, item 26.c, “Other equity capital components.” No net
increase in equity capital should be reported in Schedule RI-A, Changes in Bank Equity Capital. In
addition, when a note receivable is offset in the equity capital section of the balance sheet, accrued
interest receivable on the note also should be offset in equity (and reported as a deduction from equity
capital in Schedule RC, item 26.c), consistent with the guidance in ASC Subtopic 505-10. Because a
nonreciprocal transfer from an owner or another party to an institution does not typically result in the
recognition of income or expense, the accrual of interest on a note receivable that has been reported
as a deduction from equity capital should be reported as additional paid-in capital rather than interest
income.
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Capital Contributions of Cash and Notes Receivable (cont.):
However, ASC Subtopic 505-10 provides that an institution may record a note received as a capital
contribution as an asset, rather than a reduction of equity capital, only if the note is collected in cash
“before the financial statements are issued.” The note receivable must also satisfy the existence
criteria described below, along with any applicable laws and regulations.1 When these conditions are
met, the note receivable should be reported separately from an institution’s other loans and receivables
in Schedule RC-F, item 6, “All other assets,” and individually itemized and described in accordance
with the instructions for item 6, if appropriate.
For purposes of these reports, the financial statements are considered issued at the earliest of the
following dates:
(1) The submission deadline for the Consolidated Reports of Condition and Income (30 calendar
days after the quarter-end report date, except for an institution that has more than one foreign
office, other than a “shell” branch or an International Banking Facility, for which the deadline is
35 calendar days after quarter-end);
(2) Any other public financial statement filing deadline to which the institution or its parent holding
company is subject; or
(3) The actual filing date of the institution’s public financial reports, including the filing of its
Consolidated Reports of Condition and Income or a public securities filing by the institution or its
parent holding company.
To be reported as an asset, rather than a reduction of equity capital, as of a quarter-end report date,
a note received as a capital contribution (that is collected in cash as described above) must meet the
definition of an asset under generally accepted accounting principles by satisfying all of the following
existence criteria:
(1) There must be written documentation providing evidence that the note was contributed to the
institution prior to the quarter-end report date by those with authority to make such a capital
contribution on behalf of the issuer of the note (e.g., if the contribution is by the institution’s parent
holding company, those in authority would be the holding company’s board of directors or its chief
executive officer or chief financial officer);
(2) The note must be a legally binding obligation of the issuer to fund a fixed and stated dollar amount
by a specified date; and
(3) The note must be executed and enforceable before quarter-end.
Although an institution’s parent holding company may have a general intent to, or may have entered
into a capital maintenance agreement with the institution that calls for it to, maintain the institution’s
capital at a specified level, this general intent or agreement alone would not constitute evidence that a
note receivable existed at quarter-end. Furthermore, if a note receivable for a capital contribution
obligates the note issuer to pay an amount that is variable or otherwise not specifically stated, the
institution must offset the note and equity capital. Similarly, an obligor’s issuance of several notes
having fixed face amounts, taken together, would be considered a single note receivable having a
variable payment amount, which would require all the notes to be offset in equity capital as of the
quarter-end report date.
Capitalization of Interest Costs: Interest costs associated with the construction of a building shall, if
material, be capitalized as part of the cost of the building. Such interest costs include both the actual
interest incurred when the construction funds are borrowed and the interest costs imputed to internal
financing of a construction project.
1
For example, for national banks, 12 U.S.C. § 57 and 12 CFR § 5.46.
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Capitalization of Interest Costs (cont.):
The interest rate utilized to capitalize interest on internally financed projects in a reporting period shall
be the rate(s) applicable to the bank's borrowings outstanding during the period. For this purpose, a
bank's borrowings include interest-bearing deposits and other interest-bearing liabilities.
The interest capitalized shall not exceed the total amount of interest cost incurred by the bank during
the reporting period.
For further information, see ASC Subtopic 835-20, Interest – Capitalization of Interest (formerly FASB
Statement No. 34, "Capitalization of Interest Costs," as amended).
Carrybacks and Carryforwards: See "income taxes."
Cash Management Arrangements: A cash management arrangement is a group of related transaction
accounts of a single type maintained in the same right and capacity by a customer (a single legal
entity), whereby the customer and the financial institution understand that payments from one account
will be honored so long as a net credit balance exists in the group of related transaction accounts taken
as a whole. Such accounts function as, and will be regarded for reporting and deposit insurance
assessment purposes as, one account rather than separate accounts, provided adequate
documentation of the arrangement is maintained as discussed below. (Note: For reporting and
deposit insurance assessment purposes, transaction accounts of affiliates and subsidiaries of a parent
company that are separate legal entities may not be offset because accounts of separate legal entities
are not permitted within a bona fide cash management arrangement.)
"Transaction accounts of a single type" means demand deposit accounts or NOW accounts, but not a
combination thereof. For purposes of cash management arrangements, the terms "right" and
"capacity" relate to the form of legal ownership such as being held in an agency or trust capacity, as a
joint tenant, or as an individual. "Single legal entity" means a natural person, partnership, corporation,
trust, or estate.
The reporting bank must maintain readily available records that will allow for the verification of cash
management arrangements. Such documentation must provide account numbers, account titles,
ownership of accounts, and the terms and conditions surrounding the management of the accounts,
and must also clearly show that both the customer and the reporting bank have agreed to such terms
and conditions. These terms and conditions must clearly indicate the understanding that payments
from one account will be honored as long as a net credit balance exists within the group of related
transaction accounts taken as a whole and maintained in the same right and capacity. A written cash
management agreement, signed by both the customer (a single legal entity) and the reporting bank,
accurately maintained and incorporating the above information, will be acceptable evidence of a bona
fide cash management arrangement. In addition, the reporting bank must maintain readily available
records that will allow for the verification of account balances within cash management arrangements.
See "deposits" for the definitions of transaction account, demand deposit, and NOW account. See also
"overdraft."
Certificate of Deposit: See "deposits."
Changes in Accounting Estimates: See "accounting changes."
Changes in Accounting Principles: See "accounting changes."
Clearing Accounts: See "suspense accounts."
Commercial Banks in the U.S.: See "banks, U.S. and foreign."
Commercial Letter of Credit: See "letter of credit."
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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 RC-B, normally in item 6, "Other debt
securities," unless held for trading and therefore reportable in Schedule RC, item 5, "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.
Common Stock of Unconsolidated Subsidiaries, Investments in: See “equity method of accounting”
and "subsidiaries."
Continuing Contract: See "federal funds transactions."
Corporate Joint Venture: See "subsidiaries."
Corrections of Accounting Errors: See "accounting changes."
Coupon Stripping, Treasury Receipts, and STRIPS: Coupon stripping occurs when a security holder
physically detaches unmatured coupons from the principal portion of a security and sells either the
detached coupons or the ex-coupon security separately. (Such transactions are generally considered
by federal bank supervisory agencies to represent "improper investment practices" for banks.) In
accounting for such transactions, the carrying amount of the security must be allocated between the
ex-coupon security and the detached coupons based on their relative fair values at the date of the sale
in accordance with ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," as
amended). (See the Glossary entry for "transfers of financial assets.")
Detached U.S. Government security coupons and ex-coupon U.S. Government securities that are held
for purposes other than trading, whether resulting from the coupon stripping activities of the reporting
bank or from its purchase of stripped securities, shall be reported as "Other domestic debt securities" in
Schedule RC-B, item 6.a. The amount of any discount or premium relating to the detached coupons or
ex-coupon securities must be amortized. (See the Glossary entry for "premiums and discounts.")
A variation of coupon stripping has been developed by several securities firms which have marketed
instruments with such names as CATS (Certificates of Accrual on Treasury Securities),
TIGR (Treasury Investment Growth Receipts), COUGAR (Certificates on Government Receipts),
LION (Lehman Investment Opportunity Notes), and ETR (East Treasury Receipts). A securities dealer
purchases U.S. Treasury securities, delivers them to a trustee, and sells receipts representing the
rights to future interest and/or principal payments on the U.S. Treasury securities held by the trustee.
Such Treasury receipts are not an obligation of the U.S. Government and, when held for purposes
other than trading, shall be reported as "Other domestic debt securities" in Schedule RC-B, item 6.a.
The discount on these Treasury receipts must be accreted.
Under a program called Separate Trading of Registered Interest and Principal of Securities (STRIPS),
the U.S. Treasury has issued certain long-term note and bond issues that are maintained in the
book-entry system operated by the Federal Reserve Banks in a manner that permits separate trading
and ownership of the interest and principal payments on these issues. Even after the interest or
principal portions of U.S. Treasury STRIPS have been separately traded, they remain obligations of the
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Coupon Stripping, Treasury Receipts, and STRIPS (cont.):
U.S. Government. STRIPS held for purposes other than trading shall be reported as U.S. Treasury
securities in Schedule RC-B, item 1. The discount on separately traded portions of STRIPS must be
accreted.
Detached coupons, ex-coupon securities, Treasury receipts, and U.S. Treasury STRIPS held for
trading purposes shall be reported at fair value in Schedule RC, item 5.
Custody Account: A custody account is one in which securities or other assets are held by a bank 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 bank nor are such accounts to be reflected as a liability.
Assets of the reporting bank held in custody accounts at other banks are to be reported on the reporting
bank's balance sheet in the appropriate asset categories as if held in the physical custody of the
reporting bank.
Dealer Reserve Account: A dealer reserve account arises when a bank purchases at full face value a
dealer's installment note receivables, but credits less than the full face value directly to the dealer's
account. The remaining amount is credited to a separate dealer reserve account. That account is held
by the bank as collateral for the installment notes and, for reporting purposes, is treated as a deposit in
the appropriate items of Schedule RC-E. The bank will subsequently disburse to the dealer
predetermined portions of the reserve as the purchased notes are paid in a timely manner.
For example, if a bank purchases $100,000 in notes from a dealer for the full face amount ($100,000)
and pays to the dealer $90,000 in cash or credits to his/her deposit account, the remaining $10,000,
which is held as collateral security, would be credited to the dealer reserve account.
See also "deposits."
Debt Issuance Costs: Debt issuance costs include the underwriting, legal, accounting, printing, and
other direct costs incurred in connection with the issuance of debt. ASC Subtopic 835-30, Interest −
Imputation of Interest, requires debt issuance costs associated with a recognized debt liability (not
measured at fair value under a fair value option) to be presented as a direct deduction from the face
amount of the related debt liability, similar to debt discounts. Debt issuance costs, like debt discounts,
in effect reduce the proceeds of the borrowing, thereby increasing the effective interest rate on the
debt.
For purposes of these reports, institutions should report debt issuance costs as a direct deduction from
the appropriate balance sheet liability category in Schedule RC, e.g., item 16, “Other borrowed money,”
or item 19, “Subordinated notes and debentures.” However, debt issuance costs associated with a
recognized liability reported at fair value under a fair value option should be expensed as incurred.
Debt issuance costs should be amortized using the effective interest method. The amortization of debt
issuance costs should be reported as interest expense in the income statement category appropriate to
the related liability in Schedule RI, e.g., item 2.c, “Other interest expense.”
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Debt Issuance Costs (cont.):
The guidance in ASC Subtopic 835-30 does not address the presentation or subsequent measurement
of debt issuance costs related to line-of-credit arrangements. The agencies would not object to an
institution deferring and presenting debt issuance costs related to a line-of-credit arrangement as an
“Other asset” and subsequently amortizing the deferred debt issuance costs ratably over the term of
the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit
arrangement.
Deferred Compensation Agreements: Institutions often enter into deferred compensation agreements
with selected employees as part of executive compensation and retention programs. These
agreements are generally structured as nonqualified retirement plans for federal income tax purposes
and are based upon individual agreements with selected employees. Institutions purchase life
insurance in connection with many of these agreements. Bank-owned life insurance may produce
attractive tax-equivalent yields that offset some or all of the costs of the agreements.
Deferred compensation agreements with select employees under individual contracts generally do not
constitute postretirement income plans (i.e., pension plans) or postretirement health and welfare
benefit plans. The accounting for individual contracts that, when taken together, do not represent a
postretirement plan should follow ASC Subtopic 710-10, Compensation-General – Overall (formerly
Accounting Principles Board Opinion No. 12, “Omnibus Opinion – 1967,” as amended by FASB
Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”). If the
individual contracts, taken together, are equivalent to a plan, the plan should be accounted for under
ASC Topic 715, Compensation-Retirement Benefits (formerly FASB Statement No. 87, "Employers’
Accounting for Pensions," or Statement No. 106).
ASC Subtopic 710-10 requires that an employer’s obligation under a deferred compensation
agreement be accrued according to the terms of the individual contract over the required service period
to the date the employee is fully eligible to receive the benefits, i.e., the “full eligibility date.” Depending
on the individual contract, the full eligibility date may be the employee’s expected retirement date, the
date the employee entered into the contract, or a date between these two dates. ASC Subtopic 710-10
does not prescribe a specific accrual method for the benefits under deferred compensation contracts,
stating only that the “cost of those benefits shall be accrued over that period of the employee’s service
in a systematic and rational manner.” The amounts to be accrued each period should result in a
deferred compensation liability at the full eligibility date that equals the then present value of the
estimated benefit payments to be made under the individual contract.
ASC Subtopic 710-10 does not specify how to select the discount rate to measure the present value of
the estimated benefit payments. Therefore, other relevant accounting literature must be considered in
determining an appropriate discount rate. For purposes of these reports, an institution’s incremental
borrowing rate1 and the current rate of return on high-quality fixed-income debt securities2 are
acceptable discount rates to measure deferred compensation agreement obligations. An institution
must select and consistently apply a discount rate policy that conforms with generally accepted
accounting principles.
For each deferred compensation agreement to be accounted for in accordance with ASC Subtopic
710-10, an institution should calculate the present value of the expected future benefit payments under
1
ASC Subtopic 835-30, Interest – Imputation of Interest (formerly APB Opinion No. 21, "Interest on Receivables and
Payables," paragraph 13), states in part that “the rate used for valuation purposes will normally be at least equal to
the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction.”
2
Paragraph 186 in the Basis for Conclusions of former FASB Statement No. 106 states that “[t]he objective of
selecting assumed discount rates is to measure the single amount that, if invested at the measurement date in a
portfolio of high-quality debt instruments, would provide the necessary future cash flows to pay the accumulated
benefits when due.”
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Deferred Compensation Agreements (cont.):
the agreement at the employee’s full eligibility date. The expected future benefit payments can be
reasonably estimated and should be based on reasonable and supportable assumptions. The
estimated amount of these benefit payments should be discounted because the benefits will be paid in
periodic installments after the employee retires.
For deferred compensation agreements commonly referred to as revenue neutral or indexed retirement
plans,1 the expected future benefits should include both the "primary benefit" and, if the employee is
entitled to "excess earnings" that are earned after retirement, the "secondary benefit." The number of
periods the primary and any secondary benefit payments should be discounted may differ because the
discount period for each type of benefit payment should be based upon the length of time during which
each type of benefit will be paid as specified in the deferred compensation agreement.
After the present value of the expected future benefit payments has been determined, an institution
should accrue an amount of compensation expense and a liability each year from the date the
employee enters into the deferred compensation agreement until the full eligibility date. The amount of
these annual accruals should be sufficient to ensure that a deferred compensation liability equal to the
present value of the expected benefit payments is recorded by the full eligibility date. Any method of
deferred compensation accounting that does not recognize some expense in each year from the date
the employee enters into the agreement until the full eligibility date is not systematic and rational. (For
indexed retirement plans, some expense should be recognized for the primary benefit and any
secondary benefit in each of these years.)
Vesting provisions should be reviewed to ensure that the full eligibility date is properly determined
because this date is critical to the measurement of the liability estimate. Because ASC Subtopic
710-10 requires that the present value of the expected benefit payments be recorded by the full
eligibility date, institutions also need to consider changes in market interest rates to appropriately
measure deferred compensation liabilities. Therefore, institutions should periodically review their
estimates of the expected future benefits under deferred compensation agreements and the discount
rates used to compute the present value of the expected benefit payments and revise the estimates
and rates, when appropriate.
Deferred compensation agreements may include noncompete provisions or provisions requiring
employees to perform consulting services during postretirement years. If the value of the noncompete
provisions cannot be reasonably and reliably estimated, no value should be assigned to the
noncompete provisions in recognizing the deferred compensation liability. Institutions should allocate a
portion of the future benefit payments to consulting services to be performed in postretirement years
only if the consulting services are determined to be substantive. Factors to consider in determining
whether postretirement consulting services are substantive include, but are not limited to, whether the
services are required to be performed, whether there is an economic benefit to the institution, and
whether the employee forfeits the benefits under the agreement for failure to perform such services.
1
Revenue neutral and indexed retirement plans are deferred compensation agreements that are typically designed
so that the spread each year, if any, between the tax-equivalent earnings on bank-owned life insurance covering an
individual employee and a hypothetical earnings calculation is deferred and paid to the employee as a postretirement
benefit. This spread is commonly referred to as “excess earnings.” The hypothetical earnings are computed based
on a pre-defined variable index rate (e.g., cost of funds or federal funds rate) times a notional amount. The
agreement for this type of plan typically requires the excess earnings that accrue before an employee’s retirement to
be recorded in a separate liability account. Once the employee retires, the balance in the liability account is generally
paid to the employee in equal annual installments over a set number of years (e.g., 10 or 15 years). These payments
are commonly referred to as the “primary benefit” or “preretirement benefit.” The employee may also receive the
excess earnings that are earned after retirement. This benefit may continue until his or her death and is commonly
referred to as the “secondary benefit” or “postretirement benefit.” The secondary benefit is paid annually, once the
employee has retired, in addition to the primary benefit.
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Deferred Compensation Agreements (cont.):
Deferred compensation liabilities should be reported on the balance sheet in Schedule RC, item 20,
“Other liabilities,” and in Schedule RC-G, item 4, “All other liabilities.” In the Call Reports for June and
December, if this amount is greater than $100,000 and exceeds 25 percent of the amount reported in
Schedule RC-G, item 4, it should be reported in Schedule RC-G, item 4.b. The annual compensation
expense (service component and interest component) related to deferred compensation agreements
should be reported in the income statement in Schedule RI, item 7.a, "Salaries and employee benefits."
See also "bank-owned life insurance."
Deferred Income Taxes: See "income taxes."
Defined Benefit Postretirement Plans: The accounting and reporting standards for defined benefit
postretirement plans, such as pension plans and health care plans, are set forth in ASC Topic 715,
Compensation-Retirement Benefits (formerly FASB Statement No. 87, “Employers’ Accounting for
Pensions”; FASB Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than
Pensions”; and FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans”). ASC Topic 715 requires an institution that sponsors a single-employer
defined benefit postretirement plan to recognize the funded status of each such plan on its balance
sheet. The funded status of a benefit plan is measured as of the end of an institution’s fiscal year as
the difference between plan assets at fair value (with limited exceptions) and the benefit obligation. An
overfunded plan is recognized as an asset, which should be reported in Schedule RC-F, item 6, “All
other assets,” while an underfunded plan is recognized as a liability, which should be reported in
Schedule RC-G, item 4, “All other liabilities.”
An institution should measure the net period benefit cost of a defined benefit plan for a reporting period
in accordance with ASC Subtopic 715-30 (formerly FASB Statement No. 87) for pension plans and
ASC Subtopic 715-60 (formerly FASB Statement No. 106) for other postretirement benefit plans. This
cost should be reported in Schedule RI, item 7.a, “Salaries and employee benefits.” However, an
institution must recognize certain gains and losses and prior service costs or credits that arise on a
defined benefit plan during each reporting period, net of tax, as a component of other comprehensive
income (Schedule RI-A, item 10) and, hence, accumulated other comprehensive income (AOCI)
(Schedule RC, item 26.b). Postretirement plan amounts carried in AOCI are adjusted as they are
subsequently recognized in earnings as components of a plan’s net periodic benefit cost.
For further information on accounting for defined benefit postretirement plans, institutions should refer
to ASC Topic 715.
Impact on Regulatory Capital – An institution that has made the AOCI opt-out election in
Schedule RC-R, Part I, item 3.a, should reverse the effects on AOCI of ASC Topic 715 (formerly
FASB Statement No. 158) for purposes of reporting and measuring the numerators and denominators
for the leverage and risk-based capital ratios. The intent of the reversal is to neutralize for regulatory
capital purposes the effects on AOCI of the application of ASC Topic 715. The instructions for
Schedule RC-R, Part I, items 9.d and 26, and Schedule RC-R, Part II, item 8, provide guidance on how
to report adjustments to Tier 1 capital and risk-weighted and total assets to reverse the effects of
applying ASC Topic 715 for regulatory capital purposes.
Demand Deposits: See "deposits."
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Depository Institutions in the U.S.: Depository institutions in the U.S. consist of:
(1) U.S. branches and agencies of foreign banks;
(2) U.S.-domiciled head offices and branches of U.S. banks, i.e.,
(a) national banks,
(b) state-chartered commercial banks,
(c) trust companies that perform a commercial banking business,
(d) industrial banks,
(e) private or unincorporated banks,
(f) Edge and Agreement corporations, and
(g) International Banking Facilities (IBFs) of U.S. banks; and
(3) U.S.-domiciled head offices and branches of other depository institutions in the U.S., i.e.,
(a) mutual or stock savings banks,
(b) savings or building and loan associations,
(c) cooperative banks,
(d) credit unions,
(e) homestead associations,
(f) other similar depository institutions in the U.S., and
(g) International Banking Facilities (IBFs) of other depository institutions in the U.S.
Deposits: The basic statutory and regulatory definitions of "deposits" are contained in Section 3(l) 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 purposes of these reports, 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 the Consolidated
Reports of Condition and Income are discussed below under the following headings:
(I) FDI Act definition of deposits.
(II) Transaction-nontransaction deposit distinction.
(III) Interest-bearing-noninterest-bearing deposit distinction.
(I)
FDI Act definition of deposits – Section 3(l) 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 conditionally or unconditionally, to a commercial, checking, savings, time, or
thrift account, or which is evidenced by its certificate of deposit, thrift certificate, investment
certificate, certificate of indebtedness, or other similar name, or a check or draft drawn
against a deposit account and certified by the bank or 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 or savings association for collection,
(2) trust funds as defined in this Act received or held by such bank or savings association,
whether held in the trust department or held or deposited in any other department of such
bank or savings association,
(3) money received or held by a bank or savings association, or the credit given for money or its
equivalent received or held by a bank or savings association, in the usual course of business
for a special or specific purpose, regardless of the legal relationship thereby established,
FFIEC 051
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GLOSSARY
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GLOSSARY
Deposits (cont.):
including without being limited to, escrow funds, funds held as security for an obligation due
to the bank or savings association or others (including funds held as dealers reserves) or for
securities loaned by the bank or savings association, funds deposited by a 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 or savings association for immediate
application to the reduction of an indebtedness to the receiving bank or savings association,
or under condition that the receipt thereof immediately reduces or extinguishes such an
indebtedness,
(4) outstanding draft (including advice or authorization to charge a bank's or a savings
association's balance in another bank or savings association), cashier's check, money order,
or other officer's check issued in the usual course of business for any purpose, including
without being limited to those issued in payment for services, dividends, or purchases, and
(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 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 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 title 26 [the Internal Revenue Code].
(II) Transaction-nontransaction deposit distinction – The Monetary Control Act of 1980 and the current
Federal Reserve Regulation D, "Reserve Requirements of Depository Institutions," establish, for
purposes of federal reserve requirements on deposit liabilities, a category of deposits designated
as "transaction accounts." All deposits that are not transaction accounts are "nontransaction
accounts."
(1) Transaction accounts – With the exceptions noted below, a "transaction account," as defined
in Regulation D and in these instructions, is a deposit or account from which the depositor or
account holder is permitted to make transfers or withdrawals by negotiable or transferable
instruments, payment orders of withdrawal, telephone transfers, or other similar devices for
the purpose of making payments or transfers to third persons or others or from which the
depositor may make third party payments at an automated teller machine (ATM), a remote
service unit (RSU), or another electronic device, including by debit card.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
Excluded from transaction accounts are savings deposits (both money market deposit
accounts (MMDAs) and other savings deposits) as defined below in the nontransaction
account category, even though such deposits permit some third-party transfers. However, an
account that otherwise meets the definition of a savings deposit but that authorizes or permits
the depositor to exceed the transfer limitations specified for that account shall be reported as
a transaction account. (Please refer to the definition of savings deposits for further detail.)
NOTE: Under the Federal Reserve's current Regulation D, no transaction account,
regardless of its other characteristics, is classified either as a savings deposit or as a time
deposit. Thus, those transaction accounts that are not demand deposits – NOW accounts,
ATS (Automatic Transfer Service) accounts, and telephone and preauthorized transfer
accounts – are excluded from Regulation D time and savings deposits. For all items in the
Consolidated Reports of Condition and Income involving time or savings deposits, a strict
distinction, based on Regulation D definitions, is to be maintained between transaction
accounts and time and savings accounts.
Transaction accounts consist of the following types of deposits: (a) demand deposits;
(b) NOW accounts; (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 issuance of a negotiable or transferable instrument.
NOW accounts, as authorized by federal law, are limited to accounts held by:
(i)
Individuals or sole proprietorships;
(ii)
Organizations that are operated primarily for religious, philanthropic, charitable,
educational, or other similar purposes and that are not operated for profit. These
include organizations, partnerships, corporations, or associations that are not
organized for profit and are described in section 501(c)(3) through (13) and (19)
and section 528 of the Internal Revenue Code of the Internal Revenue Code, such
as church organizations; professional associations; trade associations; labor
unions; fraternities, sororities and similar social organizations; and nonprofit
recreational clubs; or
(iii) Governmental units including the federal government and its agencies and
instrumentalities; state governments; county and municipal governments and their
political subdivisions; the District of Columbia; the Commonwealth of Puerto Rico,
American Samoa, Guam, and any territory or possession of the United States and
their political subdivisions.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
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)
FFIEC 051
Deposits or accounts maintained in connection with an arrangement that permits
the depositor to obtain credit directly or indirectly through the drawing of a
negotiable or nonnegotiable check, draft, order or instruction or other similar device
(including telephone or electronic order or instruction) on the issuing institution that
can be used for the purpose of making payments or transfers to third parties or
others, or to another deposit account of the depositor.
A-27
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GLOSSARY
FFIEC 051
GLOSSARY
Deposits (cont.):
(ii)
The balance of deposits or accounts that otherwise meet the definition of time
deposits, but from which payments may be made to third parties by means of a
debit card, an automated teller machine, remote service unit or other electronic
device, regardless of the number of payments made.
However, an account is not a transaction account merely by virtue of arrangements that
permit the following types of transfers or withdrawals, regardless of the number:
(i)
Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).
(ii)
Transfers of funds from this account to another account of the same depositor at
the same depository institution when made by mail, messenger, automated teller
machine, or in person.
(iii) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).
(2) Nontransaction accounts – All deposits that are not transaction accounts (as defined above)
are nontransaction accounts. Nontransaction accounts include: (a) savings deposits ((i)
money market deposit accounts (MMDAs) and (ii) other savings deposits) and (b) time
deposits ((i) time certificates of deposit and (ii) time deposits, open account). Regulation D
no longer distinguishes between money market deposit accounts (MMDAs) and other
savings deposits. However, these two types of accounts are defined below for purposes of
these reports, which call for separate data on each in Schedule RC-E, Memorandum
items 2.a.(1) and (2).
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.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
There are no regulatory restrictions on the following types of transfers or withdrawals
from a savings deposit account, regardless of the number:
(1) Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).
(2) Transfers of funds from this account to another account of the same depositor at
the same institution when made by mail, messenger, automated teller machine, or
in person.
(3) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).
Further, for a savings deposit account, no minimum balance is required by regulation,
there is no regulatory limitation on the amount of interest that may be paid, and no
minimum maturity is required (although depository institutions must reserve the right to
require at least seven days' written notice prior to withdrawal as stipulated above for a
savings deposit).
Any depository institution may place restrictions and requirements on savings deposits
in addition to those stipulated above. In the case of such further restrictions, the
account would still be reported as a savings deposit.
On the other hand, an account that otherwise meets the definition of a savings deposit
but that authorizes or permits the depositor to exceed the six-transfer/withdrawal rule
shall be reported as a transaction account, as follows:
(1) If the depositor is ineligible to hold a NOW account, such an account is considered
a demand deposit.
(2) If the depositor is eligible to hold a NOW account, the account will be considered
either a NOW account, a telephone or preauthorized transfer account, or an ATS
account:
(a) If withdrawals or transfers by check, draft, or similar instrument are permitted
or authorized, the account is considered a NOW account.
(b) If withdrawals or transfers by check, draft, or similar instrument are not
permitted or authorized, the account is considered either an ATS account or a
telephone or preauthorized transfer account.
Regulation D no longer distinguishes between money market deposit accounts
(MMDAs) and other savings deposits. However, these two types of accounts are
defined as follows for purposes of these reports, which call for separate data on each.
(1) Money market deposit accounts (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.
(2) Other savings deposits are deposits or accounts that meet the above definition of a
savings deposit but that permit no transfers by check, draft, debit card, or similar
order made by the depositor and payable to third parties. Other savings deposits
are commonly known as passbook savings or statement savings accounts.
FFIEC 051
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GLOSSARY
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GLOSSARY
Deposits (cont.):
Examples illustrating distinctions between MMDAs and other savings deposits for
purposes of these reports are provided at the end of this Glossary entry.
(b) Time deposits are deposits that the depositor does not have a right, and is not
permitted, to make withdrawals from within six days after the date of deposit unless the
deposit is subject to an early withdrawal penalty of at least seven days' simple interest
on amounts withdrawn within the first six days after deposit. A time deposit from which
partial early withdrawals are permitted must impose additional early withdrawal penalties
of at least seven days' simple interest on amounts withdrawn within six days after each
partial withdrawal. If such additional early withdrawal penalties are not imposed, the
account ceases to be a time deposit. The account may become a savings deposit if it
meets the requirements for a savings deposit; otherwise it becomes a demand deposit.
NOTE: The above prescribed penalties are the minimum required by Federal Reserve
Regulation D. Institutions may choose to require penalties for early withdrawal in
excess of the regulatory minimums.
Time deposits take two forms:
(i)
Time certificates of deposit (including rollover certificates of deposit) are deposits
evidenced by a negotiable or nonnegotiable instrument, or a deposit in book entry
form evidenced by a receipt or similar acknowledgement issued by the bank, that
provides, on its face, that the amount of such deposit is payable to the bearer, to
any specified person, or to the order of a specified person, as follows:
(1) on a certain date not less than seven days after the date of deposit,
(2) at the expiration of a specified period not less than seven days after the date
of the deposit, or
(3) upon written notice to the bank 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:
(1) the date of maturity which shall be not less than seven days after the date of
the deposit, or
(2) 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:
(1) 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
FFIEC 051
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GLOSSARY
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GLOSSARY
Deposits (cont.):
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.
(2) 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 banks have established “retail sweep
arrangements” or “retail sweep programs.” In a retail sweep arrangement, a depository
institution transfers funds between a customer’s transaction account(s) and that customer’s
nontransaction account(s) (usually savings deposit account(s)) by means of preauthorized or
automatic transfers, typically in order to reduce transaction account reserve requirements
while providing the customer with unlimited access to the funds.
There are three key criteria for retail sweep programs to comply with the Federal Reserve
Regulation D definitions of “transaction account” and “savings deposit:”
(1) A depository institution must establish by agreement with its transaction account
customer two legally separate accounts: a transaction account (a NOW account or
demand deposit account) and a savings deposit account, including those sometimes
called a “money market deposit account” or “MMDA”;
(2) The swept funds must actually be moved from the customer’s transaction account to the
customer’s savings deposit account on the official books and records of the depository
institution as of the close of the business on the day(s) on which the depository
institution intends to report the funds in question as savings deposits and not transaction
accounts, and vice versa. In addition to actually moving the customer’s funds between
accounts and reflecting this movement at the account level:
(a) If the depository institution’s general ledger is sufficiently disaggregated to
distinguish between transaction and savings deposit accounts, the aforementioned
movement of funds between the customer’s transaction account and savings
deposit account must be reflected on the general ledger.
(b) If the depository institution’s general ledger is not sufficiently disaggregated, the
distinction may be reflected in supplemental records or systems, but only if such
supplemental records or systems constitute official books and records of the
institution and are subject to the same prudent managerial oversight and controls as
the general ledger.
A retail sweep program may not exist solely in records or on systems that do not
constitute official books and records of the depository institution and that are not used
for any purpose other than generating its Report of Transaction Accounts, Other
Deposits and Vault Cash (FR 2900) for submission to the Federal Reserve; and
(3) The maximum number of preauthorized or automatic funds transfers (“sweeps”) out of a
savings deposit account and into a transaction account in a retail sweep program is
limited to not more than six per month. Transfers out of the transaction account and into
the savings deposit account may be unlimited in number.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
If any of the three criteria is not met, all swept funds must continue to be reported as
transaction accounts, both for purposes of these reports and of FR 2900 deposit reports. All
three criteria must be met in order to report the nontransaction account component of a retail
sweep program as a nonreservable savings deposit account.
Further, for purposes of the Consolidated Reports of Condition and Income, if all three of the
criteria above are met, a bank must report the transaction account and nontransaction
account components of a retail sweep program separately when it reports its quarter-end
deposit information in Schedules RC, RC-E, and RC-O; its quarterly averages in Schedule
RC-K; and its interest expense (if any) in Schedule RI. Thus, when reporting quarterly
averages in Schedule RC-K, a bank should include the amounts held in the transaction
account (if interest-bearing) and the nontransaction savings account components of retail
sweep arrangements each day or each week in the appropriate separate items for average
deposits. In addition, if the bank pays interest on accounts involved in retail sweep
arrangements, the interest expense reported in Schedule RI should be allocated between the
transaction account and the nontransaction (savings) account based on the balances in
these accounts during the reporting period.
For additional information, refer to the Federal Reserve Board staff guidance relating to the
requirements for a retail sweep program under Regulation D at
http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/2007/20070501/200705
01.pdf.
(III) Interest-bearing-noninterest-bearing deposit distinction –
(a) 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.
(b) 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.
Noninterest-bearing deposit accounts include (i) matured time deposits that are not
automatically renewable (unless the deposit agreement provides for the funds to be
transferred at maturity to another type of account) and (ii) deposits with a zero percent stated
interest rate that are issued at face value.
See also "brokered deposits" and "hypothecated deposits."
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GLOSSARY
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GLOSSARY
Deposits (cont.):
Examples Illustrating Distinctions Between
MONEY MARKET DEPOSIT ACCOUNTS (MMDAs) and OTHER SAVINGS DEPOSITS
Example 1
A savings deposit account permits no transfers of any type to other accounts or to third parties.
Report this account as an other savings deposit.
Example 2
A savings deposit permits up to six, but no more than six, "preauthorized, automatic, or
telephonic" transfers to other accounts or to third parties. None of the third-party payments may be
made by check, draft, or similar order (including debit card).
Report this account as an other savings deposit.
Example 3
A savings deposit permits no more than six "preauthorized, automatic, or telephonic" transfers to
other accounts or to third parties, any or all which may be by check, draft, debit card or similar order
made by the depositor and payable to third parties.
Report this account as an MMDA.
Derivative Contracts: Banks 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 FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended), which banks
must follow for purposes of these reports. 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 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.
(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.
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GLOSSARY
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GLOSSARY
Derivative Contracts (cont.):
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.
ASC Topic 815 has special criteria for determining whether commitments to originate loans meet the
definition of a derivative. Commitments to originate mortgage loans that will be held for sale are
accounted for as derivatives. Commitments to originate mortgage loans that will be held for investment
are not accounted for as derivatives. Also, all commitments to originate loans other than mortgage
loans are not accounted for as derivatives. Commitments to purchase loans must be evaluated to
determine whether the commitment meets the definition of a derivative under ASC Topic 815.
Types of Derivatives
The most common types of freestanding derivatives are forwards, futures, swaps, options, caps, floors,
and collars.
Forward contracts are agreements that obligate two parties to purchase (long) and sell (short) a
specific financial instrument, foreign currency, or commodity at a specified price with delivery and
settlement at a specified future date.
Futures contracts are standardized forward contracts that are traded on organized exchanges.
Exchanges in the U.S. are registered with and regulated by the Commodity Futures Trading
Commission. The deliverable financial instruments underlying interest-rate future contracts are
specified investment-grade financial instruments, such as U.S. Treasury securities or mortgage-backed
securities. Foreign currency futures contracts involve specified deliverable amounts of a particular
foreign currency. The deliverable products under commodity futures contracts are specified amounts
and grades of commodities such as gold bullion. Equity futures contracts are derivatives that have a
portion of their return linked to the price of a particular equity or to an index of equity prices, such as the
Standard and Poor's 500.
Other forward contracts are traded over the counter and their terms are not standardized. Such
contracts can only be terminated, other than by receipt of the underlying asset, by agreement of both
buyer and seller. A forward rate agreement is a forward contract that specifies a reference interest rate
and an agreed on interest rate (one to be paid and one to be received), an assumed principal 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, 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
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Derivative Contracts (cont.):
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, i.e., bifurcated, 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 a
considered a derivative.
An embedded derivative instrument in which the underlying is an interest rate or interest rate index that
alters net interest payments that otherwise would be paid or received on an interest-bearing host
contract is considered to be clearly and closely related to the host contract unless either of the
following conditions exist:
(1) The hybrid instrument can contractually be settled in such a way that the investor (holder) would
not recover substantially all of its initial recorded investment,
or
(2) The embedded derivative could at least double the investor’s initial rate of return on the host
contract 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.
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Derivative Contracts (cont.):
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 these reports, 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 on the balance sheet 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 bank 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 bank 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 bank should recognize all of its derivative instruments on its balance sheet as either assets or
liabilities at fair value. As defined in ASC Topic 820, Fair Value Measurement (formerly FASB
Statement No. 157, “Fair Value Measurements”), fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. For further information, see the Glossary entry for “fair value.”
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.
(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.
(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
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Derivative Contracts (cont.):
outside of earnings as a component of other comprehensive income and subsequently reclassified
into earnings in the same period or periods during which the hedged transaction affects earnings.
The remaining gain or loss on the derivative instrument, if any, (i.e., the ineffective portion of the
gain or loss and any component of the gain or loss excluded from the assessment of hedge
effectiveness) should be recognized currently in earnings.
(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 part of the cumulative translation adjustment. For a derivative
designated as a hedge of the foreign currency exposure of an unrecognized firm commitment or an
available-for-sale security, the accounting for a fair value hedge should be applied. Similarly, for a
derivative designated as a hedge of the foreign currency exposure of a 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 rate;1 (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:
(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 a 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.
1
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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Derivative Contracts (cont.):
In a cash flow hedge, the individual cash flows related to a recognized asset or liability and the cash
flows related to a forecasted transaction are both referred to as a forecasted transaction. Thus, a
forecasted transaction is eligible for designation as a hedged transaction if the forecasted transaction is
specifically identified as a single transaction or a group of individual transactions, the occurrence of the
forecasted transaction is probable, and certain other criteria specified in ASC Topic 815 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.
When this occurs for a cash flow hedge, the net gain or loss on the derivative should remain in
“Accumulated other comprehensive income” and be reclassified into earnings in the periods during
which the hedged forecasted transaction affects earnings. However, if it is probable that the forecasted
transaction will not occur by the end of the originally specified time period (as documented at the
inception of the hedging relationship) or within an additional two-month period of time thereafter
(except as noted in ASC Topic 815), the derivative gain or loss reported in “Accumulated other
comprehensive income” should be reclassified into earnings immediately.
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 in the Call Report
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 the balance sheet (Schedule RC).
Each institution must report whether it has any derivative contracts in Schedule SU, item 1. If the
institution has derivative contracts, it must complete items 1.a through 1.d of Schedule SU, as
appropriate, to report separately the notional amounts of interest rate derivatives and all other
derivatives, distinguishing between derivatives held for trading and derivatives not held for trading.
Trading derivatives with positive fair values should be reported as trading assets in Schedule RC,
item 5. Trading derivatives with negative fair values should be reported as trading liabilities in
Schedule RC, item 15. Changes in the fair value of (that is, gains and losses on) trading derivatives
should be recognized currently in earnings and included as trading revenue in Schedule RI, item 5.l,
“Other noninterest income.”
Freestanding derivatives held for purposes other than trading (and embedded derivatives that are
accounted for separately under ASC Topic 815, which the bank has chosen to present separately from
the host contract on the balance sheet) that have positive fair values should be included in
Schedule RC-F, item 6, "All other assets." In the Call Reports for June and December, if the total fair
value of these derivatives is greater than $100,000 and exceeds 25 percent of "All other assets" this
amount should be disclosed in Schedule RC-F, item 6.c. Freestanding derivatives held for purposes
other than trading (and embedded derivatives that are accounted for separately under ASC Topic 815,
which the bank has chosen to present separately from the host contract on the balance sheet) that have
negative fair values should be included in Schedule RC-G, item 4, "All other liabilities." In the
Call Reports for June and December, if the total fair value of these derivatives is greater than $100,000
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Derivative Contracts (cont.):
and exceeds 25 percent of "All other liabilities," this amount should be disclosed in Schedule RC-G,
item 4.d. Net gains (losses) on derivatives held for purposes other than trading that are not designated
as hedging instruments in hedging relationships that qualify for hedge accounting in accordance with
ASC Topic 815 should be recognized currently in earnings and reported consistently as either “Other
noninterest income” or “Other noninterest expense” in Schedule RI, item 5.l or item 7.d, respectively.
Netting of derivative assets and liabilities is prohibited on the balance sheet 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."
Discounts: See "premiums and discounts."
Dividends: Cash dividends are payments of cash to stockholders in proportion to the number of shares
they own. Cash dividends on preferred and common stock are to be reported on the date they are
declared by the bank's board of directors (the declaration date) by debiting "retained earnings" and
crediting "dividends declared not yet payable," which is to be reported in other liabilities. Upon
payment of the dividend, "dividends declared not yet payable" is debited for the amount of the cash
dividend with an offsetting credit, normally in an equal amount, to "dividend checks outstanding" which
is reportable in the "demand deposits" category of the bank's deposit liabilities.
A liability for dividends payable may not be accrued in advance of the formal declaration of a dividend
by the board of directors. However, the bank may segregate a portion of retained earnings in the form
of a net worth reserve in anticipation of the declaration of a dividend.
Stock dividends are distributions of additional shares to stockholders in proportion to the number of
shares they own. Stock dividends are to be reported by transferring an amount equal to the fair value
of the additional shares issued from retained earnings to a category of permanent capitalization
(common stock and surplus). However, the amount transferred from retained earnings must be
reduced by the amount of any mandatory and discretionary transfers previously made (such as those
from retained earnings to surplus for increasing the bank's legal lending limit) provided such transfers
have not already been used to record a stock dividend. In any event, the amount transferred from
retained earnings may not be less than the par or stated value of the additional shares being issued.
Property dividends, also known as dividends in kind, are distributions to stockholders of assets other
than cash. The transfer of securities of other companies, real property, or any other asset owned by
the reporting bank to a stockholder or related party is to be recorded at the fair value of the asset on
the declaration date of the dividend. A gain or loss on the transferred asset must be recognized in the
same manner as if the property had been disposed of in an outright sale at or near the declaration
date. In those instances where a bank transfers bank premises to a parent holding company in the
form of a property dividend and the parent immediately enters into a sale-leaseback transaction with a
third party, the gain must be deferred by the bank and amortized over the life of the lease.
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Domestic Office: For purposes of these reports, a domestic office of the reporting bank is a branch or
consolidated subsidiary (other than an Edge or Agreement subsidiary) located in the 50 states of the
United States or the District of Columbia or a branch on a U.S. military facility wherever located.
However, if the reporting bank is chartered and headquartered in Puerto Rico or a U.S. territory or
possession, a branch or consolidated subsidiary located in the 50 states of the United States, the
District of Columbia, Puerto Rico, or a U.S. territory or possession is a domestic office. The domestic
offices of the reporting bank exclude all International Banking Facilities (IBFs); all offices of Edge and
Agreement subsidiaries, including their U.S. offices; and all branches and other consolidated
subsidiaries of the bank located in foreign countries.
Due Bills: A due bill is an obligation that results when a bank 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 RC, item 16, "Other borrowed money," by the issuing bank.
Conversely, when the reporting bank is the holder of a due bill, the outstanding due bill obligation of the
seller shall be reported as a loan to that party.
Edge and Agreement Corporation: An Edge corporation is a federally-chartered corporation organized
under Section 25A 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.
A reporting bank's Edge or Agreement subsidiary, i.e., the bank's majority-owned Edge or Agreement
corporation, is treated for purposes of these reports as a "foreign" office of the reporting bank.
Equity-Indexed Certificates of Deposit: Under ASC Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended), a certificate of deposit that pays "interest" based on changes in an equity securities index is
a hybrid instrument with an embedded derivative that must be accounted for separately from the host
contract, i.e., the certificate of deposit. For further information, see the Glossary entry for "Derivative
Contracts." Examples of equity-indexed certificates of deposit include the "Index Powered® CD" and
the “Dow Jones Industrials Indexed Certificate of Deposit.”
At the maturity date of a typical equity-indexed certificate of deposit, the holder of the certificate of
deposit receives the original amount invested in the deposit plus some or all of the appreciation, if any,
in an index of stock prices over the term of the certificate of deposit. Thus, the equity-indexed
certificate of deposit contains an embedded equity call option. To manage the market risk of its equityindexed certificates of deposit, a bank that issues these deposits normally enters into one or more
separate freestanding equity derivative contracts with an overall term that matches the term of the
certificates of deposit. At maturity, these separate derivatives are expected to provide the bank with a
cash payment in an amount equal to the amount of appreciation, if any, in the same stock price index
that is embedded in the certificates of deposit, thereby providing the bank with the funds to pay the
"interest" on the equity-indexed certificates of deposit. During the term of the separate freestanding
equity derivative contracts, the bank will periodically make either fixed or variable payments to the
counterparty on these contracts.
When a bank issues an equity-indexed certificate of deposit, it must either account for the written
equity call option embedded in the deposit separately from the certificate of deposit host contract or
irrevocably elect to account for the hybrid instrument (the equity-indexed certificate of deposit) in its
entirety at fair value.
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Equity-Indexed Certificates of Deposit (cont.):
• If the bank accounts for the written equity call option separately from the certificate of deposit, the
fair value of this embedded derivative on the date the certificate of deposit is issued must be
deducted from the amount the purchaser invested in the deposit, creating a discount on the
certificate of deposit that must be amortized to interest expense over the term of the deposit using
the effective interest method. This interest expense should be reported in the income statement in
the appropriate subitem of Schedule RI, item 2.a, "Interest on deposits." The equity call option
must be "marked to market" at least quarterly with any changes in the fair value of the option
recognized in earnings. On the balance sheet, the carrying value of the certificate of deposit host
contract and the fair value of the embedded equity derivative may be combined and reported
together as a deposit liability on the balance sheet (Schedule RC) and in the deposit schedule
(Schedule RC-E).
•
If the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
no discount is to be recorded on the certificate of deposit. Rather, the equity-indexed certificate of
deposit must be “marked to market” at least quarterly, with changes in the instrument’s fair value
reported in the income statement consistently in either item 5.l, "Other noninterest income," or
item 7.d, "Other noninterest expense”, excluding interest expense incurred that is reported in the
appropriate subitem of Schedule RI, item 2.a, "Interest on deposits."
As for the separate freestanding derivative contracts the bank enters into to manage its market risk,
these derivatives must be carried on the balance sheet as assets or liabilities at fair value and "marked
to market" at least quarterly with changes in their fair value recognized in earnings. The fair value of
the freestanding derivatives should not be netted against the fair value of the embedded equity
derivatives for balance sheet purposes because these two derivatives have different counterparties.
The periodic payments to the counterparty on these freestanding derivatives must be accrued with the
expense reported in earnings along with the change in the derivative's fair value. In the income
statement (Schedule RI), the changes in the fair value of the embedded and freestanding derivatives,
including the effect of the accruals for the payments to the counterparty on the freestanding
derivatives, should be netted and reported consistently in either item 5.l, "Other noninterest income," or
item 7.d, "Other noninterest expense."
Unless the bank that issues the equity-indexed certificate of deposit elects to account for the certificate
of deposit in its entirety at fair value, the notional amount of the embedded equity call option must be
reported in Schedule SU, item 1.d. The notional amount of the freestanding equity derivative also must
be reported in Schedule SU, item 1.d. The equity derivative embedded in the equity-indexed certificate
of deposit is a written option, which is not covered by the agencies' risk-based capital standards.
However, the freestanding equity derivative is covered by these standards.
For deposit insurance assessment purposes, if the carrying value of the certificate of deposit host
contract and the fair value of the embedded equity derivative are combined and reported together as a
deposit liability on the balance sheet, the difference between these combined amounts and the face
amount of the certificate of deposit should be treated as an unamortized premium or discount, as
appropriate, for purposes of reporting total deposit liabilities in Schedule RC-O, item 1. If these two
amounts are not combined and only the carrying value of the certificate of deposit host contract is
reported as a deposit liability on the balance sheet, the difference between the carrying value and the
face amount of the certificate of deposit should be treated as an unamortized discount in
Schedule RC-O, item 1. If the bank elects to account for the equity-indexed certificate of deposit in its
entirety at fair value, the difference between the fair value and the face amount of the certificate of
deposit should be treated as an unamortized premium or discount, as appropriate, in Schedule RC-O,
item 1.
A bank that purchases an equity-indexed certificate of deposit for investment purposes must either
account for the embedded purchased equity call option separately from the certificate of deposit host
contract or irrevocably elect to account for the hybrid instrument (the equity-indexed certificate of
deposit) in its entirety at fair value.
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GLOSSARY
Equity-Indexed Certificates of Deposit (cont.):
• If the bank accounts for the purchased equity call option separately from the certificate of deposit,
the fair value of this embedded derivative on the date of purchase must be deducted from the
purchase price of the certificate, creating a discount on the deposit that must be accreted into
income over the term of the deposit using the effective interest method. This accretion should be
reported in the income statement in Schedule RI, item 1.c. The embedded equity derivative must
be "marked to market" at least quarterly with any changes in its fair value recognized in earnings.
These fair value changes should be reported consistently in Schedule RI in either item 5.l, "Other
noninterest income," or item 7.d, "Other noninterest expense." The carrying value of the certificate
of deposit host contract and the fair value of the embedded equity derivative may be combined and
reported together as interest-bearing balances due from other depository institutions on the
balance sheet in Schedule RC, item 1.b.
•
If the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
no discount is to be recorded on the certificate of deposit. Rather, the equity-indexed certificate of
deposit must be “marked to market” at least quarterly, with changes in the instrument’s fair value
reported in the income statement consistently in either item 5.l, "Other noninterest income," or
item 7.d, "Other noninterest expense,” excluding interest income that is reported in Schedule RI,
item 1.c.
Unless the bank that purchases the equity-indexed certificate of deposit elects to account for the
certificate of deposit in its entirety at fair value, the notional amount of the embedded equity derivative
must be reported in Schedule SU, item 1.d, . The embedded equity derivative in the equity-indexed
certificate of deposit is a purchased option, which is subject to the agencies' risk-based capital
standards unless the fair value election has been made.
Equity Method of Accounting: The equity method of accounting shall be used to account for:
(1) Investments in subsidiaries that have not been consolidated; associated companies; and corporate
joint ventures, unincorporated joint ventures, and general partnerships over which the bank
exercises significant influence; and
(2) Noncontrolling investments in:
(a) Limited partnerships; and
(b) Limited liability companies that maintain “specific ownership accounts” for each investor and
are within the scope of ASC Subtopic 323-30, Investments-Equity Method and Joint Ventures –
Partnerships, Joint Ventures, and Limited Liability Entities (formerly EITF Issue No. 03-16,
“Accounting for Investments in Limited Liability Companies”)
unless the investment in the limited partnership or limited liability company is so minor that the
limited partner or investor may have virtually no influence over the operating and financial policies
of the partnership or company. Consistent with guidance in ASC Subtopic 323-30,
Investments-Equity Method and Joint Ventures – Partnerships, Joint Ventures, and Limited Liability
Entities (formerly EITF Topic D-46, “Accounting for Limited Partnership Investments”),
noncontrolling investments of more than 3 to 5 percent are considered to be more than minor.
The entities in which these investments have been made are collectively referred to as “investees.”
Under the equity method, the carrying value of a bank’s investment in an investee is originally recorded
at cost but is adjusted periodically to record as income the bank’s proportionate share of the investee’s
earnings or losses and decreased by the amount of cash dividends or similar distributions received
from the investee. For purposes of these reports, the date through which the carrying value of the
bank’s investment in an investee has been adjusted should, to the extent practicable, match the report
date of the Consolidated Report of Condition, but in no case differ by more than 93 days from the
report.
See also "subsidiaries."
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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 requirement.
The reporting of an EBA by participants and agents differs from the required reporting of a passthrough 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 RC, item 1.b,
“Interest-bearing balances” due from depository institutions. For risk-based capital purposes, the
participant’s balance in an EBA is accorded a zero percent risk weight and should be reported in
Schedule RC-R, Part II, item 1, “Cash and balances due from depository institutions,” column C. A
participant should not include its balance in an EBA in Schedule RC, item 3.a, “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 RC, item 1.b, “Interest-bearing balances” due from depository
institutions; Schedule RC, item 13.a.(2), “Interest-bearing” deposits; or Schedule RC-R, Part II, item 1,
“Cash and balances due from depository institutions.”
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 405-20, a bank 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 bank 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 bank's reacquiring its
outstanding debt.
(2) The bank is legally released from being the primary obligor under the liability, either judicially or by
the creditor.
Banks should aggregate their gains and losses from the extinguishment of liabilities (debt), including
losses resulting from the payment of prepayment penalties on borrowings such as Federal Home Loan
Bank advances, and consistently report the net amount in item 7.d, "Other noninterest expense," of the
income statement (Schedule RI). Only if a bank's debt extinguishments normally result in net gains
over time should the bank consistently report its net gains (losses) in Schedule RI, item 5.l, "Other
noninterest income."
In addition, under ASC Subtopic 470-50, Debt – Modifications and Extinguishments (formerly FASB
EITF Issue No. 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments”), the
accounting for the gain or loss on the modification or exchange of debt depends on whether the original
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Extinguishments of Liabilities (cont.):
and the new debt instruments are substantially different. If they are substantially different, the
transaction is treated as an extinguishment of debt and the gain or loss on the modification or
exchange is reported immediately in earnings as discussed in the preceding paragraph. If the original
and new debt instruments are not substantially different, the gain or loss on the modification or
replacement of the debt is deferred and recognized over time as an adjustment to the interest expense
on the new borrowing. ASC Subtopic 470-50 provides guidance on how to determine whether the
original and the new debt instruments are substantially different.
Fails: When a bank 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 bank 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 the Reports of Condition and Income.
Fair Value: ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157, “Fair Value
Measurements”), defines fair value and establishes a framework for measuring fair value. ASC
Topic 820 should be applied when other accounting topics require or permit fair value measurements.
For further information, refer to ASC Topic 820.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants in the asset’s or liability’s principal (or most
advantageous) market at the measurement date. This value is often referred to as an “exit” price.
An orderly transaction is a transaction that assumes exposure to the market for a period prior to the
measurement date to allow for marketing activities that are usual and customary for transactions
involving such assets or liabilities; it is not a forced liquidation or distressed sale.
ASC Topic 820 establishes a three level fair value hierarchy that prioritizes inputs used to measure
fair value based on observability. The highest priority is given to Level 1 (observable, unadjusted) and
the lowest priority to Level 3 (unobservable). The broad principles for the hierarchy follow.
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. In addition, a
Level 1 fair value measurement of a liability can also include the quoted price for an identical liability
when traded as an asset in an active market when no adjustments to the quoted price of the asset are
required.
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 measurement to a Level 3 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 develop 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 bank’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.
Refer to ASC Topic 820 for additional fair value measurement guidance, including considerations
related to holding large positions (blocks), the existence of multiple active markets, and the use of
practical expedients.
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Fair Value (cont.):
Measurement of Fair Values in Stressed Market Conditions – The measurement of various assets and
liabilities on the balance sheet – including trading assets and liabilities, available-for-sale securities,
loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed
assets – involves the use of fair values. During periods of market stress, the fair values of some
financial instruments and nonfinancial assets may be difficult to determine. Institutions are reminded
that, under such conditions, fair value measurements should be determined consistent with the
objective of fair value set forth in ASC Topic 820.
ASC Topic 820 provides guidance on determining fair value when the volume and level of activity for
an asset or liability have significantly decreased when compared with normal market activity for the
asset or liability (or similar assets or liabilities). According to ASC Topic 820, if there has been such a
significant decrease, transactions or quoted prices may not be determinative of fair value because, for
example, there may be increased instances of transactions that are not orderly. In those
circumstances, further analysis of transactions or quoted prices is needed, and a significant adjustment
to the transactions or quoted prices may be necessary to estimate fair value in accordance with ASC
Topic 820.
Federal Funds Transactions: For purposes of the Consolidated Reports of Condition and Income,
federal funds transactions involve the reporting bank's lending (federal funds sold) or borrowing
(federal funds purchased) in domestic offices of 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 bank can either use or dispose of on the
same business day that the transaction giving rise to the receipt or disposal of the funds is executed.
The borrowing and lending of immediately available funds has an original maturity of one business day
if the funds borrowed on one business day are to be repaid or the transaction reversed on the next
business day, that is, if immediately available funds borrowed today are to be repaid tomorrow (in
tomorrow's immediately available funds). Such transactions include those made on a Friday to mature
or be reversed the following Monday and those made on the last business day prior to a holiday (for
either or both of the parties to the transaction) to mature or be reversed on the first business day
following the holiday.
A continuing contract is a contract or agreement that remains in effect for more than one business day,
but has no specified maturity and does not require advance notice of either party to terminate. Such
contracts may also be known as rollovers or as open-ended agreements.
Federal funds may take the form of the following two types of transactions in domestic offices 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 "fed 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.
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Federal Funds Transactions (cont.):
Any borrowing or lending of immediately available funds in domestic offices 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.
Fees, Loan: See "loan fees."
Foreclosed Assets: The accounting and reporting standards for the receipt and holding of foreclosed
assets are set forth in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors
(formerly FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings"), and ASC Topic 360, Property, Plant, and Equipment (formerly FASB Statement
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"). Subsequent to the
issuance of Statement No. 144, AICPA Statement of Position (SOP) No. 92-3, "Accounting for
Foreclosed Assets," was rescinded. Certain provisions of SOP 92-3 are not present in Statement
No. 144, but the application of these provisions represents prevalent practice in the banking industry
and is consistent with safe and sound banking practices and the accounting objectives set forth in
Section 37(a) of the Federal Deposit Insurance Act. These provisions of SOP 92-3 have been
incorporated into this Glossary entry, which institutions must follow for purposes of preparing their
Consolidated Reports of Condition and Income.
An institution that receives from a borrower in full satisfaction of a loan either receivables from a third
party, an equity interest in the borrower, or another type of asset (except a long-lived asset that will be
sold) shall initially measure the asset received at its fair value at the time of the restructuring. When an
institution receives a long-lived asset, such as real estate, from a borrower in full satisfaction of a loan,
the long-lived asset is rebuttably presumed to be held for sale and the institution shall initially measure
this asset at its fair value less cost to sell. The fair value (less cost to sell, if applicable) of the asset
received in full satisfaction of the loan becomes the "cost" of the asset. The amount, if any, by which
the recorded investment in the loan (or the amortized cost basis of the loan, if the institution has
adopted ASC Topic 326, Financial Instruments–Credit Losses)1 exceeds the fair value (less cost to
sell, if applicable) of the asset is a loss which must be charged to the allowance for loan and lease
losses at the time of restructuring, foreclosure, or repossession. In those cases where property is
received in full satisfaction of an asset other than a loan (e.g., a debt security), the loss should be
reported on the income statement in a manner consistent with the balance sheet classification of the
asset satisfied.
If an asset is sold shortly after it is received in a restructuring, foreclosure, or repossession, it would
generally be appropriate to substitute the value received in the sale (net of the cost to sell for a longlived asset, such as real estate, that has been sold) for the fair value (less cost to sell for a long-lived
asset, such as real estate, that will be sold) that had been estimated at the time of restructuring,
foreclosure, or repossession. Any adjustments should be made to the loss charged against the
allowance.
1
The recorded investment in the loan is the loan balance adjusted for any unamortized premium or discount
and unamortized loan fees or costs, less any amount previously charged off, plus recorded accrued interest.
For institutions that have adopted ASC Topic 326, the term “amortized cost basis” is used in place of “recorded
investment.” See the Glossary entry for “amortized cost basis.”
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Foreclosed Assets (cont.):
An asset received in partial satisfaction of a loan should be initially measured as described above and
the recorded investment in, or amortized cost basis of, the loan, as applicable, should be reduced by
the fair value (less cost to sell, if applicable) of the asset at the time of restructuring, foreclosure, or
repossession.
The measurement and accounting subsequent to acquisition for real estate received in full or partial
satisfaction of a loan, including through foreclosure or repossession, is discussed below in this
Glossary entry. For other types of assets that an institution receives in full or partial satisfaction of a
loan, the institution generally should subsequently measure and account for such assets in accordance
with other applicable generally accepted accounting principles and regulatory reporting instructions for
such assets.
For purposes of these reports, foreclosed assets include loans (other than residential real estate
property collateralizing a consumer mortgage loan) where an institution, as creditor, has received
physical possession of a borrower's assets, regardless of whether formal foreclosure proceedings take
place. An institution, as creditor, is considered to have received physical possession (resulting from an
in-substance repossession or foreclosure) of residential real estate property collateralizing a consumer
mortgage loan only upon the occurrence of either of the following:
(1) The institution obtains legal title to the residential real estate property upon completion of a
foreclosure even if the borrower has redemption rights that provide the borrower with a legal right
for a period of time after a foreclosure to reclaim the real estate property by paying certain amounts
specified by law, or
(2) The borrower conveys all interest in the residential real estate property to the bank to satisfy the
loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The
deed in lieu of foreclosure or similar legal agreement is completed when agreed-upon terms and
conditions have been satisfied by both the borrower and the creditor.
In situations where physical possession is received, the secured loan should be recategorized on the
balance sheet in the asset category appropriate to the underlying collateral (e.g., as other real estate
owned for real estate collateral) and accounted for as described above, except for foreclosures on
certain fully and partially government-guaranteed mortgage loans, which are to be reported in
Schedule RC-F, item 6, “All other assets,” as discussed below in this Glossary entry.
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 RC-M, item 5.b, "Other
borrowings."
After foreclosure, each foreclosed real estate asset (including any real estate for which the institution
receives physical possession) 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 paragraphs).
This determination must be made on an asset-by-asset basis. If the fair value of a foreclosed real
estate asset minus the estimated costs to sell the asset is less than the asset's cost, the deficiency
must be recognized as a valuation allowance against the asset which is created through a charge to
expense. The valuation allowance should thereafter be increased or decreased (but not below zero)
through charges or credits to expense for changes in the asset's fair value or estimated selling costs.
If a foreclosed real estate asset is held for more than a short period of time, any declines in value after
foreclosure and any gain or loss from the sale or disposition of the asset shall not be reported as a loan
or lease loss or recovery and shall not be debited or credited to the allowance for loan and lease
losses (or allowance for credit losses, if the institution has adopted ASC Topic 326). Such additional
declines in value and the gain or loss from the sale or disposition shall be reported net on the income
statement in Schedule RI, item 5.j, “Net gains (losses) on sales of other real estate owned.”
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Foreclosed Assets (cont.):
Reporting Certain Government-Guaranteed Mortgage Loans upon Foreclosure – ASC Subtopic 310-40
clarifies the conditions under which a creditor must derecognize a government-guaranteed mortgage
loan and recognize a separate “other receivable” upon foreclosure (that is, when a creditor receives
physical possession of real estate property collateralizing a mortgage loan). When these conditions
are met, other real estate owned should not be recognized by an institution.
An institution should derecognize a mortgage loan and record a separate other receivable upon
foreclosure of the real estate collateral if all of the following conditions are met:
•
•
•
The loan has a government guarantee that is not separable from the loan before foreclosure.
At the time of foreclosure, the institution has the intent to convey the property to the guarantor
and make a claim on the guarantee and it has the ability to recover under that claim.
At the time of foreclosure, any amount of the claim that is determined on the basis of the fair
value of the real estate is fixed (that is, the real estate property has been appraised for purposes
of the claim and thus the institution is not exposed to changes in the fair value of the property).
This guidance is applicable to fully and partially government-guaranteed mortgage loans provided the
three conditions identified above have been met. In such situations, upon foreclosure, the separate
other receivable should be measured based on the amount of the loan balance (principal and interest)
expected to be recovered from the guarantor. This other receivable should be reported in
Schedule RC-F, item 6, “All other assets.” Any interest income earned on the other receivable should
be reported in Schedule RI, item 1.g, “Other interest income.”
Dispositions of Foreclosed Real Estate – Until the effective date of ASU 2014-09 “Revenue from
Contracts with Customers,” which includes amendments to ASC Subtopic 610-20, Other Income –
Gains and Losses from the Derecognition of Nonfinancial Assets, the primary accounting guidance for
sales of foreclosed real estate is ASC Subtopic 360-20, Property, Plant, and Equipment – Real Estate
Sales (formerly FASB Statement No. 66, "Accounting for Sales of Real Estate"). When it takes effect,
ASC Subtopic 610-20 supersedes ASC Subtopic 360-20 for real estate sales not accompanied by a
leaseback and becomes the primary accounting guidance for sales of foreclosed real estate.
This Glossary entry presents a summary of the methods included in ASC Subtopic 360-20 for
institutions that have not yet adopted ASC 610-20. For institutions that have adopted ASC Subtopic
610-20, this Glossary entry also presents a summary of the provisions of ASC Subtopic 610-20, which
requires the application of specified portions of ASC Topic 606, Revenue from Contracts with
Customers, to an institution’s sale of repossessed nonfinancial assets such as foreclosed real estate
(also referred to as other real estate owned or OREO).
Effective Date of ASU 2014-09, including ASC Subtopic 610-20 (and ASC Topic 606) – For institutions
that are public business entities, these standards are effective for fiscal years beginning after
December 15, 2017, including interim reporting periods within those fiscal years. For institutions that
are not public business entities (i.e., that are private companies), the standards are effective for fiscal
years beginning after December 15, 2018, and interim reporting periods within fiscal years beginning
after December 15, 2019. For further information, see the Glossary entries for “public business entity”
and “private company.” Early application of these standards is permitted for all institutions for fiscal
years beginning after December 15, 2016, and interim reporting periods as prescribed in the standards.
An institution that early adopts these standards must apply them (including all of ASC Topic 606 on
revenue recognition) in their entirety. If an institution chooses to early adopt these standards for
financial reporting purposes, the institution should implement them in its Call Report for the same
quarter-end report date.
Accounting under ASC Subtopic 360-20 – This subtopic, which applies to all transactions in which the
seller provides financing to the buyer of the real estate, establishes the following methods to account
for dispositions of real estate. If a profit is involved in the sale of real estate, each method sets forth
the manner in which the profit is to be recognized. Regardless of which method is used, however, any
losses on the disposition of real estate should be recognized immediately.
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Foreclosed Assets (cont.):
(1) Full Accrual Method – Under the full accrual method, the disposition is recorded as a sale. Any
profit resulting from the sale is recognized in full and the asset resulting from the seller's financing
of the transaction is reported as a loan. This method may be used when the following conditions
have been met:
(a) A sale has been consummated;
(b) The buyer's initial investment (down payment) and continuing investment (periodic payments)
are adequate to demonstrate a commitment to pay for the property;
(c) The receivable is not subject to future subordination; and
(d) The usual risks and rewards of ownership have been transferred.
Guidelines for the minimum down payment that must be made in order for a transaction to qualify
for the full accrual method are set forth in ASC Subtopic 360-20. These vary from five percent to
25 percent of the property's sales value. These guideline percentages vary by type of property and
are primarily based on the inherent risk assumed for the type and characteristics of the property.
To meet the continuing investment criteria, the contractual loan payments must be sufficient to
repay the loan over the customary loan term for the type of property involved. Such periods may
range up to 30 years for loans on single family residential property.
(2) Installment Method – Dispositions of foreclosed real estate that do not qualify for the full accrual
method may qualify for the installment method. This method recognizes a sale and the
corresponding loan. Any profits on the sale are only recognized as the institution receives
payments from the purchaser/borrower. Interest income is recognized on an accrual basis, when
appropriate.
The installment method is used when the buyer's down payment is not adequate to allow use of
the full accrual method but recovery of the cost of the property is reasonably assured if the buyer
defaults. Assurance of recovery requires careful judgment on a case-by-case basis. Factors which
should be considered include: the size of the down payment, loan-to-value ratios, projected cash
flows from the property, recourse provisions, and guarantees.
Since default on the loan usually results in the seller's reacquisition of the real estate, reasonable
assurance of cost recovery may often be achieved with a relatively small down payment. This is
especially true in situations involving loans with recourse to borrowers who have verifiable net
worth, liquid assets, and income levels. Reasonable assurance of cost recovery may also be
achieved when the purchaser/borrower pledges additional collateral.
(3) Cost Recovery Method – Dispositions of foreclosed real estate that do not qualify for either the
full accrual or installment methods are sometimes accounted for using the cost recovery method.
This method recognizes a sale and the corresponding loan, but all income recognition is deferred.
Principal payments are applied as a reduction of the loan balance and interest increases the
unrecognized gross profit. No profit or interest income is recognized until either (1) the aggregate
payments by the borrower exceed the recorded investment in, or the amortized cost basis of, the
loan, as applicable, or (2) a change to another accounting method is appropriate (e.g., installment
method). Consequently, the loan is maintained in nonaccrual status while this method is being
used.
(4) Reduced-Profit Method – This method is used in certain situations where the institution receives an
adequate down payment, but the loan amortization schedule does not meet the requirements for
use of the full accrual method. The method recognizes a sale and the corresponding loan.
However, like the installment method, any profit is apportioned over the life of the loan as
payments are received. The method of apportionment differs from the installment method in that
profit recognition is based on the present value of the lowest level of periodic payments required
under the loan agreement.
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Foreclosed Assets (cont.):
Since sales with adequate down payments are generally not structured with inadequate loan
amortization requirements, this method is seldom used in practice.
(5) Deposit Method – The deposit method is used in situations where a sale of the foreclosed real
estate has not been consummated. It may also be used for dispositions that could be accounted
for under the cost recovery method. Under this method a sale is not recorded and the asset
continues to be reported as foreclosed real estate. Further, no profit or interest income is
recognized. Payments received from the borrower are reported as a liability in Schedule RC-G,
item 4, “All other liabilities,” until sufficient payments or other events have occurred which allow the
use of one of the other methods.
Accounting under ASC Subtopic 610-20 (and ASC Topic 606) – The amendments to ASC Subtopic
610-20, when effective as a result of ASU 2014-09 (as discussed above), eliminate the prescriptive
criteria and methods for sale accounting and gain recognition for dispositions of OREO set forth in ASC
Subtopic 360-20. Under ASC Subtopic 610-20, if the buyer of the OREO is a legal entity, an institution
should first assess whether it has a controlling financial interest in the legal entity buying the OREO by
applying the guidance in ASC Topic 810, Consolidation. If an institution determines that it has a
controlling financial interest in the buying legal entity, it should not derecognize the OREO and should
apply the guidance in ASC Subtopic 810-10. When an institution does not have a controlling financial
interest in the buying legal entity or the OREO buyer is not a legal entity, which is expected to be the
case for most sales of OREO, the institution will recognize the entire gain or loss, if any, and
derecognize the OREO at the time of sale if the transaction meets certain requirements of ASC
Topic 606. Otherwise, the institution generally will continue reporting the OREO as an asset, with any
cash payments or other consideration received from the individual or entity acquiring the OREO (i.e.,
any down payment and any subsequent payments of principal or interest) reported as a liability in
Schedule RC-G, item 4, “All other liabilities,” until it becomes appropriate to recognize the revenue and
the sale of the OREO in accordance with ASC Subtopic 610-20 and ASC Topic 606.1
When applying ASC Subtopic 610-20 and Topic 606, an institution will need to exercise judgment in
determining whether a contract (within the meaning of Topic 606) exists for the sale or transfer of
OREO, whether the institution has performed its obligations identified in the contract, and what the
transaction price is for calculation of the amount of gain or loss. These standards apply to all sales or
transfers of real estate by institutions, but greater judgment will generally be required for seller-financed
sales of OREO.
Under ASC Subtopic 610-20, when an institution does not have a controlling financial interest in the
buying legal entity or the OREO buyer is not a legal entity, the institution’s first step in assessing
whether it can derecognize an OREO asset and recognize revenue upon the sale or transfer of the
OREO is to determine whether a contract exists under the provisions of Topic 606. In the context of an
OREO sale or transfer, in order for an institution’s transaction with the party acquiring the property to
be a contract under ASC Topic 606, it must meet all the following criteria:
(a) The parties to the contract have approved the contract (in writing, orally, or in accordance with
other customary business practices) and are committed to perform their respective obligations;
(b) The institution can identify each party’s rights regarding the OREO to be transferred;
(c) The institution can identify the payment terms for the OREO to be transferred;
(d) The contract has commercial substance (that is, the risk, timing, or amount of the institution’s
future cash flows is expected to change as a result of the contract); and
(e) It is probable that the institution will collect substantially all of the consideration to which it will be
entitled in exchange for OREO that will be transferred to the buyer, i.e. the transaction price. In
1
Although ASC Topic 606 describes the consideration received (including any cash payments) using such terms a
“liability,” “deposit,” and “deposit liability,” for regulatory reporting purposes these amounts should be reported in
Schedule RC-G, item 4, and not as a deposit in Schedule RC, item 13.
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Foreclosed Assets (cont.):
evaluating whether collectability of an amount of consideration is probable, an institution shall
consider only the buyer’s ability and intention to pay that amount of consideration when it is due.
These five criteria require careful analysis for seller-financed sales of OREO. In particular, criteria (a)
and (e) may require significant judgment. When determining whether the buyer is committed to
perform its obligations under criterion (a) and collectability under criterion (e), a selling institution
should consider all facts and circumstances related to the buyer’s ability and intent to pay the
transaction price, which may include:
•
•
•
•
•
Amount of cash paid as a down payment;
Existence of recourse provisions;
Credit standing of the buyer;
Age and location of the property;
Cash flow from the property;
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Foreclosed Assets (cont.):
• Payments by the buyer to third parties;
• Other amounts paid to the selling institution, including current or future contingent payments;
• Transfer of noncustomary consideration (i.e., consideration other than cash and a note receivable);
• Other types of financing involved with the property or transaction;
• Financing terms of the loan (reasonable and customary terms, amortization, any graduated
payments, any balloon payment);
• Underwriting inconsistent with the institution’s underwriting policies for loans not involving OREO
sales; and
• Future subordination of the selling institution’s receivable.
Although ASC Subtopic 610-20 does not include the prescriptive minimum down payment
requirements in ASC Subtopic 360-20, the amount and character of a buyer’s equity (typically the down
payment) and recourse provisions remain important factors when evaluating criteria (a) and (e).
Specifically, the buyer’s initial equity in the property immediately after the sale is an important
consideration in determining whether a buyer is committed to perform its obligations under criterion (a).
Furthermore, the buyer’s initial equity is a factor to consider under criterion (e) when evaluating the
collectability of consideration that the institution is entitled to receive from the buyer.
In applying the revenue recognition principles in ASC Topic 606, all relevant factors are to be weighed
collectively in evaluating whether the five contract criteria have been met as the first step in
determining the appropriate accounting for a seller-financed OREO transaction. However, the
agencies consider the down payment and financing terms to be of particular importance when making
this determination. A transaction with an insignificant down payment and nonrecourse financing
generally would not meet the definition of a contract (within the meaning of Topic 606) unless there is
considerable support from other factors. The need for support from other factors recedes in
importance for a transaction with a substantial down payment and recourse financing to a buyer with
adequate capacity to repay.
If the five contract criteria in ASC Topic 606 have not been met, the institution generally may not
derecognize the OREO asset or recognize revenue (gain or loss) as an accounting sale has not
occurred. The institution should continue to assess the transaction to determine whether the contract
criteria have been met in a later period. Until that time, any consideration the institution has received
from the buyer should generally be recorded as a deposit liability. In addition, if the transaction price is
less than the carrying amount of the OREO, the institution should consider whether this indicates a
decline in fair value of the OREO that should be recognized as a valuation allowance, or an increase in
an existing valuation allowance, and through a charge to expense as discussed above in this Glossary
entry.
If an institution determines the contract criteria in ASC Topic 606 have been met, it must then
determine whether it has satisfied its performance obligations as identified in the contract by
transferring control of the asset to the buyer. Control of an asset refers to the ability to direct the use
of, and obtain substantially all of the remaining benefits from, the asset. As it relates to an institution’s
sale of OREO, ASC Topic 606 includes the following indicators of the transfer of control:
(a)
(b)
(c)
(d)
(e)
The institution has a present right to payment for the asset;
The buyer has legal title to the asset;
The institution has transferred physical possession of the asset;
The buyer has the significant risks and rewards of ownership of the asset; and
The buyer has accepted the asset.
For seller-financed sales of OREO, the transfer of control generally occurs on the closing date of the
sale when the institution obtains the right to receive payment for the property and transfers legal title to
the buyer. However, an institution must consider all relevant facts and circumstances to determine
whether control of the OREO has transferred, which may include the selling institution’s:
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Foreclosed Assets (cont.):
• Involvement with the property following the transaction;
• Obligation to repurchase the property in the future;
• Obligation to provide support for the property following the sale transaction; and
• Retention of an equity interest in the property.
In particular, if an institution has the obligation or right to repurchase the OREO, the buyer does not
obtain control of the OREO because the buyer is limited in its ability to direct the use of, and obtain
substantially all of the remaining benefits from, the asset even though it may have physical possession.
In this situation, an institution should account for the contract as either (1) a lease in accordance with
ASC Topic 840, Leases, or ASC Topic 842, Leases, as applicable, or (2) a financing arrangement in
accordance with ASC Topic 606. In addition, situations may exist where the selling institution has legal
title to the OREO, while the borrower whose property was foreclosed upon under the original loan still
has redemption rights to reclaim the property in the future. If such redemption rights exist, the selling
institution may not be able to transfer control to the buyer of the OREO and recognize revenue until the
redemption period expires.
When a contract exists and an institution has transferred control of the property, the institution should
derecognize the OREO asset and recognize a gain or loss for the difference between the transaction
price and the carrying amount of the OREO asset. Generally, the transaction price in a sale of OREO
will be the contract amount in the purchase/sale agreement, including for a seller-financed sale
financed at market terms. However, the transaction price may differ from the amount stated in the
contract due to the existence of a significant financing component. Under the new standard, a
significant financing component exists if the timing of the buyer’s payments explicitly or implicitly
provides the selling institution or the buyer with a significant benefit of financing the transfer of the
OREO. A seller-financed transaction of OREO at off-market terms generally indicates the existence of
a significant financing component. If a significant financing component exists, the contract amount
should be adjusted for the time value of money to reflect what the cash selling price of the OREO
would have been at the time of its transfer to the buyer. The discount rate used in adjusting for the
time value of money should be a market rate of interest considering the credit characteristics of the
buyer and the terms of the financing.
Foreign Banks: See "banks, U.S. and foreign."
Foreign Currency Transactions and Translation: Foreign currency transactions are transactions
occurring in the ordinary course of business (e.g., purchases, sales, borrowings, and lendings)
denominated in a currency other than the office's functional currency (as described below).
Foreign currency translation, on the other hand, is the process of translating financial statements from
the foreign office's functional currency into the reporting currency. Such translation normally is
performed only at reporting dates.
A functional currency is the currency of the primary economic environment in which an office operates.
For banks filing the FFIEC 051, the functional currency is the U.S. dollar.
Accounting for foreign currency transactions – A change in exchange rates between the functional
currency and the currency in which a transaction is denominated will increase or decrease the amount
of the functional currency expected to be received or paid. These increases or decreases in the
expected functional currency cash flow are foreign currency transaction gains and losses and are to be
included in the determination of the income of the period in which the transaction takes place, or if the
transaction has not yet settled, the period in which the rate change takes place.
Except for foreign currency derivatives and transactions described in the following paragraphs, banks
should consistently report net gains (losses) from foreign currency transactions other than trading
transactions in Schedule RI, item 5.l, "Other noninterest income," or item 7.d, "Other noninterest
expense." Net gains (losses) from foreign currency trading transactions should be reported as trading
revenue in Schedule RI, item 5.l, “Other noninterest income.”
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Foreign Currency Transactions and Translation (cont.):
Foreign currency transaction gains or losses on intercompany foreign currency transactions of a
long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future),
when the parties to the transaction are consolidated, combined, or accounted for by the equity method
in the bank’s Consolidated Reports of Condition and Income are to be excluded from the determination
of net income. For further information, refer to the Glossary entry for “foreign currency transactions and
translation” in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.:
In addition, the entire change in the fair value of foreign-currency-denominated available-for-sale debt
securities should not be included in “Realized gains (losses) on available-for-sale debt securities”
(Schedule RI, item 6.b), but should be reported in Schedule RI-A, item 10, "Other comprehensive
income." These fair value changes should be accumulated in the "Net unrealized holding gains
(losses) on available-for-sale securities” component of "Accumulated other comprehensive income" in
Schedule RC, item 26.b. However, if a decline in fair value of a foreign-currency-denominated
available-for-sale debt 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 and the amount of the write-down shall
be included in earnings (Schedule RI, item 6.b).
See the Glossary entry for "derivative contracts" for information on the accounting and reporting for
foreign currency derivatives.
For further guidance, refer to ASC Topic 830, Foreign Currency Matters (formerly FASB Statement
No. 52, "Foreign Currency Translation").
Foreign Debt Exchange Transactions: Foreign debt exchange transactions generally fall into three
categories: (1) loan swaps, (2) debt/equity swaps, and (3) debt-for-development swaps. These
transactions are to be reported in the Consolidated Reports of Condition and Income in accordance
with generally accepted accounting principles. Generally accepted accounting principles require that
these transactions be reported at their fair value. For further information on these transactions, see the
Glossary entry for “Foreign debt exchange transactions” in the instructions for the FFIEC 031 and
FFIEC 041 Call Reports.
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 these reports, other government-owned enterprises are
not included.
Also included as foreign official institutions are international, regional, and treaty organizations, such
as the International Monetary Fund, the International Bank for Reconstruction and Development
(World Bank), the Bank for International Settlements, the Inter-American Development Bank, and the
United Nations.
Foreign Office: For purposes of these reports, a foreign office of the reporting bank is a branch or
consolidated subsidiary located in a foreign country; an Edge or Agreement subsidiary, including both
its U.S. and its foreign offices; or an IBF. In addition, if the reporting bank is chartered and
headquartered in the 50 states of the United States and the District of Columbia, a branch or
consolidated subsidiary located in Puerto Rico or a U.S. territory or possession is a foreign office.
Branches on U.S. military facilities wherever located are treated as domestic offices, not foreign offices.
Forward Contracts: See "derivative contracts."
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GLOSSARY
Functional Currency: See "foreign currency transactions and translation."
Futures Contracts: See "derivative contracts."
Goodwill: According to ASC Topic 805, Business Combinations (formerly FASB Statement No. 141
(revised 2007), “Business Combinations”), goodwill is an asset representing the future economic
benefits arising from other assets acquired in a business combination that are not individually identified
and separately recognized. The private company accounting alternative for identifiable intangible
assets acquired in a business combination is discussed in a subsection of this Glossary entry. In
addition, see "acquisition method" in the Glossary entry for "business combinations" for guidance on
the recognition and initial measurement of goodwill acquired in a business combination.
Subsequent Measurement of Goodwill – Goodwill should not be amortized, but must be tested for
impairment at the reporting unit level at least annually, unless an institution meets the definition of a
private company, as defined in U.S. GAAP, and elects the goodwill amortization accounting alternative
described below. Any impairment losses recognized on goodwill during the year-to-date reporting
period should be reported in Schedule RI, item 7.c.(1), “Goodwill impairment losses,” except those
impairment losses associated with discontinued operations, which should be reported on a net-of-tax
basis in Schedule RI, item 11. Goodwill, net of any impairment losses, should be reported on the
balance sheet in Schedule RC, item 10, and in Schedule RC-M, item 2.b.
Private Company Accounting Alternative for Goodwill – ASC Subtopic 350-20, Intangibles-Goodwill
and Other – Goodwill (formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”),
generally permits a private company, as defined in U.S. GAAP, to elect an accounting alternative for
goodwill under which goodwill is amortized on a straight-line basis over a period of ten years (or less
than ten years if more appropriate) and a simplified impairment model is applied to goodwill. In
addition, if a private company chooses to adopt the goodwill accounting alternative, the private
company is required make an accounting policy election to test goodwill for impairment at either the
entity level or the reporting unit level. Goodwill must be tested for impairment when a triggering event
occurs that indicates that the fair value of an entity or a reporting unit, as appropriate under the private
company’s accounting policy election, may be below its carrying amount. U.S. GAAP for a public
business entity does not permit goodwill to be amortized, instead requiring goodwill to be tested for
impairment at the reporting unit level annually and between annual tests in certain circumstances. For
information on the distinction between a private company and a public business entity, see the
Glossary entry for “public business entity.”
A bank or savings association that meets the definition of a private company is permitted, but not
required to adopt the goodwill amortization accounting alternative. If a private institution issues U.S.
GAAP financial statements and chooses to adopt the private company alternative, it should apply the
goodwill accounting alternative in its Call Report in a manner consistent with its reporting of goodwill in
its financial statements.
Goodwill amortization expense should be reported in item 7.c.(1) of the Call Report income statement
(Schedule RI) unless the amortization is associated with a discontinued operation, in which case
the goodwill amortization should be included within the results of discontinued operations and reported
in Schedule RI, item 11.
Goodwill Impairment Testing – ASC Subtopic 350-20 provides guidance for testing and reporting
goodwill impairment losses, a summary of which follows. Impairment is the condition that exists when
the carrying amount of goodwill exceeds its implied fair value. Because the fair value of goodwill can
be measured only as a residual and cannot be measured directly, ASC Subtopic 350-20 includes a
methodology for estimating the implied fair value of goodwill for impairment measurement purposes.
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Goodwill (cont.):
Whether or not the reporting institution is a subsidiary of a holding company or other company, the
institution’s goodwill must be tested for impairment using the institution’s reporting units (unless the
institution is a private company that has elected the goodwill accounting alternative and has made an
accounting policy election to test goodwill for impairment at the entity level). Goodwill should be
assigned to reporting units in accordance with ASC Subtopic 350-20. The institution itself may be a
reporting unit.
Goodwill of a reporting unit must be tested for impairment annually and between annual tests upon the
occurrence of a triggering event, i.e., if an event occurs or circumstances change that would more likely
than not reduce the fair value of a reporting unit below its carrying amount. However, if an institution is
a private company that has elected the goodwill accounting alternative, goodwill must be tested for
impairment only upon the occurrence of a triggering event. Examples of such events or circumstances
include a significant adverse change in the business climate, unanticipated competition, a loss of key
personnel, and a more-likely-than-not expectation that a reporting unit or a significant portion of a
reporting unit will be sold or otherwise disposed of. In addition, goodwill must be tested for impairment
after a portion of goodwill has been allocated to a business to be disposed of.
When testing the goodwill of a reporting unit1 for impairment, an institution has the option of first
assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative
goodwill impairment test described in ASC Subtopic 350-20. If determined to be necessary, the twostep impairment test shall be used to identify potential goodwill impairment and measure the amount of
a goodwill impairment loss to be recognized (if any). However, an institution may choose to bypass the
qualitative assessment option for any reporting unit in any period and proceed directly to performing
the two-step quantitative goodwill impairment test described below.
Qualitative Assessment – If an institution performs a qualitative assessment and, after considering all
relevant events and circumstances, determines it is not more likely than not that the fair value of a
reporting unit is less than its carrying amount (including goodwill), then the institution does not need to
perform the two-step quantitative goodwill impairment test. In other words, if it is more likely than not
that the fair value of a reporting unit is greater than its carrying amount; an institution would not have to
quantitatively test the unit’s goodwill for impairment.
However, if the institution instead concludes that the opposite is true (that is, it is more likely than not
that the fair value of a reporting unit is less than its carrying amount), then it is required to perform the
two-step quantitative goodwill impairment test described below.
ASC Subtopic 350-20 includes examples of events and circumstances that an institution should
consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. Because the examples are not all-inclusive, other relevant events and
circumstances also must be considered.
1
For purposes of the discussions of goodwill impairment testing, the qualitative assessment, and the quantitative
impairment test, if an institution is a private company that has elected the goodwill accounting alternative and also
has elected to test goodwill for impairment at the entity level, references to the reporting unit should be read as
references to the entity.
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Goodwill (cont.):
Quantitative Impairment Test –
•
Step 1: The first step of the goodwill impairment test compares the fair value of a reporting unit1
with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater
than zero2 and its fair value exceeds its carrying amount, the reporting unit’s goodwill is
considered not impaired and the second step of the impairment test is unnecessary. However, if
the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment test must be performed to measure the amount of impairment loss, if any.
•
Step 2: The second step of the goodwill impairment test compares the implied fair value of the
reporting unit’s goodwill3 with the carrying amount of that goodwill. If the implied fair value of the
reporting unit’s goodwill exceeds the carrying amount of that goodwill, the goodwill is considered
not impaired. In contrast, if the carrying amount of the reporting unit’s goodwill exceeds the
implied fair value of that goodwill, an impairment loss must be recognized in earnings in an
amount equal to that excess. The loss recognized cannot exceed the carrying amount of the
reporting unit’s goodwill.
After an impairment loss is recognized on a reporting unit’s goodwill, the adjusted carrying amount of
that goodwill (i.e., the carrying amount of the goodwill before recognizing the impairment loss less the
amount of the impairment loss) shall be its new accounting basis. Subsequent reversal of a previously
recognized goodwill impairment loss is prohibited once the measurement of that loss is completed.
Disposal of a Reporting Unit or a Business – When a reporting unit is to be disposed of in its entirety,
goodwill of that reporting unit must be included in the carrying amount of the reporting unit when
determining the gain or loss on disposal. When a portion of a reporting unit (or a portion of the entity if
the institution is a private company that has elected the goodwill accounting alternative and also has
elected to test goodwill for impairment at the entity level) that constitutes a business is to be disposed
of, goodwill associated with that business must be included in the carrying amount of the business in
determining the gain or loss on disposal. Otherwise, an institution may not remove goodwill from its
balance sheet, for example, by "selling" or "dividending" this asset to its parent holding company or
another affiliate.
Accounting by Private Companies for Identifiable Intangible Assets Acquired in a Business Combination –
ASC Subtopic 805-20, Business Combinations – Identifiable Assets and Liabilities, and Any
Noncontrolling Interest, provides an accounting alternative that permits a private company, as defined in
U.S. GAAP, to simplify the accounting for certain intangible assets. This accounting alternative applies
when a private company is required to recognize or otherwise consider the fair value of intangible assets
as a result of certain transactions, including when applying the acquisition method to a business
combination under ASC Topic 805. A private company that elects the accounting alternative for
identifiable intangible assets should no longer recognize separately from goodwill:
•
•
Customer-related intangible assets unless they are capable of being sold or licensed
independently from the other assets of a business, and
Noncompetition agreements.
1 The fair value of a reporting unit is the price that would be received to sell the unit as a whole in an orderly
transaction between market participants at the measurement date.
2
An institution should refer ASC Subtopic 350-20 for guidance on applying the quantitative impairment test if the
carrying amount of a reporting unit is zero or negative.
3
The implied fair value of goodwill should be determined in the same manner as the amount of goodwill recognized
in a business combination is determined. That is, an institution must assign the fair value of a reporting unit to all of
the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been
acquired in a business combination.
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Goodwill (cont.):
However, because mortgage servicing rights and core deposit intangibles are regarded as capable of
being sold or licensed independently, a private company that elects this accounting alternative must
recognize these intangible assets separately from goodwill, initially measure them at fair value, and
subsequently measure them in accordance with ASC Topic 350.
A private company that elects the accounting alternative for identifiable intangible assets in ASC
Subtopic 805-20 also must adopt the private company goodwill accounting alternative in ASC
Subtopic 350-20, which is described above in this Glossary entry. However, a private company that
elects the goodwill accounting alternative in ASC Subtopic 350-20 is not required to adopt the
accounting alternative for identifiable intangible assets.
A private company’s decision to adopt the accounting alternative for identifiable intangible assets
must be made upon the occurrence of the first business combination (or other transaction within the
scope of the alternative) in fiscal years beginning after December 15, 2015. The effective date of the
private company’s decision to adopt the accounting alternative for identifiable intangible assets
depends on the timing of that first transaction as described in the applicable transition guidance in ASC
Subtopic 805-20.1 Customer-related intangible assets and noncompetition agreements that exist as of
the beginning of the period of adoption should continue to be accounted for separately from goodwill,
i.e., such existing intangible assets should not be combined with goodwill.
If an institution that is a private company issues U.S. GAAP financial statements and adopts the
accounting alternative for identifiable intangible assets, it should apply this accounting alternative in its
Call Report in a manner consistent with its reporting of intangible assets in its financial statements.
Hypothecated Deposit: A hypothecated deposit is the aggregation of periodic payments on an
installment contract received by a reporting institution in a state in which, under law, such payments
are not immediately used to reduce the unpaid balance of the installment note, but are accumulated
until the sum of the payments equals the entire amount of principal and interest on the contract, at
which time the loan is considered paid in full. For purposes of these reports, hypothecated deposits
are to be netted against the related loans.
Deposits that simply serve as collateral for loans are not considered hypothecated deposits for
purposes of these reports.
See also "deposits."
IBF: See "International Banking Facility (IBF)."
1
If the first transaction occurs in the private company’s first fiscal year beginning after December 15, 2015, the
adoption of the accounting alternative will be effective for that fiscal year’s annual financial reporting period and all
interim and annual periods thereafter. If the first transaction occurs in a fiscal year beginning after December 15,
2016, the adoption of the accounting alternative will be effective in the interim period that includes the date of the
transaction and subsequent interim and annual periods thereafter. Early application of the intangibles accounting
alternative is permitted for any annual or interim period for which a private company’s financial statements have not
yet been made available for issuance.
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Income Taxes: All banks, regardless of size, are required to report income taxes (federal, state, and
local) in the Consolidated Reports of Condition and Income on an accrual basis. Note that, in almost
all cases, applicable income taxes as reported on the Consolidated Report of Income will differ from
amounts reported to taxing authorities. The applicable income tax expense or benefit that is reflected
in the Consolidated Report of Income should include both taxes currently paid or payable (or
receivable) and deferred income taxes. The following discussion of income taxes is based on ASC
Topic 740, Income Taxes (formerly FASB Statement No. 109, "Accounting for Income Taxes," and
FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”).
Applicable income taxes in the year-end Consolidated Report of Income shall be the sum of the
following:
(1) Taxes currently paid or payable (or receivable) for the year determined from the bank's federal,
state, and local income tax returns for that year. Since the bank's tax returns will not normally be
prepared until after the year-end Consolidated Reports of Condition and Income have been
completed, the bank must estimate the amount of the current income tax liability (or receivable)
that will ultimately be reported on its tax returns. Estimation of this liability (or receivable) may
involve consultation with the bank's tax advisers, a review of the previous year's tax returns, the
identification of significant expected differences between items of income and expense reflected on
the Consolidated Report of Income and on the tax returns, and the identification of expected tax
credits.)
and
(2) Deferred income tax expense or benefit measured as the change in the net deferred tax assets or
liabilities for the period reported. Deferred tax liabilities and assets represent the amount by which
taxes payable (or receivable) are expected to increase or decrease in the future as a result of
"temporary differences" and net operating loss or tax credit carryforwards that exist at the reporting
date.
The actual tax liability (or receivable) calculated on the bank's tax returns may differ from the estimate
reported as currently payable or receivable on the year-end Consolidated Report of Income. An
amendment to the bank's year-end and subsequent Consolidated Reports of Condition and Income
may be appropriate if the difference is significant. Minor differences should be handled as accrual
adjustments to applicable income taxes in Consolidated Reports of Income during the year the
differences are detected. The reporting of applicable income taxes in the Consolidated Report of
Income for report dates other than year-end is discussed below under "interim period applicable
income taxes."
When determining the current and deferred income tax assets and liabilities to be reported in any
period, a bank’s income tax calculation contains an inherent degree of uncertainty surrounding the
realizability of the tax positions included in the calculation. The term “tax position” refers to a position
in a previously filed tax return or a position expected to be taken in a future tax return that is reflected
in measuring current or deferred income tax assets and liabilities. A tax position can result in a
permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable
to future years, or a change in the expected realizability of deferred tax assets. For each tax position
taken or expected to be taken in a tax return, a bank must evaluate whether the tax position is more
likely than not, i.e., more than a 50 percent probability, to be sustained upon examination by the
appropriate taxing authority, including resolution of any related appeals or litigation processes, based
on the technical merits of the position. In evaluating whether a tax position has met the more-likelythan-not recognition threshold, a bank should presume that the taxing authority examining the position
will have full knowledge of all relevant information. A bank’s assessment of the technical merits of a
tax position should reflect consideration of all relevant authoritative sources, e.g., tax legislation and
statutes, legislative intent, regulations, rulings, and case law, and reflect the bank’s determination of
the applicability of these sources to the facts and circumstances of the tax position. A bank must
evaluate each tax position without consideration of the possibility of an offset or aggregation with other
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Income Taxes (cont.):
positions. No tax benefit can be recorded for a tax position that fails to meet the more-likely-than-not
recognition threshold.
Each tax position that meets the more-likely-than-not recognition threshold should be measured to
determine the amount of benefit to recognize in the Consolidated Reports of Condition and Income.
The tax position is measured as the largest amount of tax benefit that is greater than 50 percent likely
of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant
information. When measuring the tax benefit, a bank must consider the amounts and probabilities of
the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and
information available at the reporting date. A bank may not use the valuation allowance associated
with any deferred tax asset as a substitute for measuring this tax benefit or as an offset to this amount.
If a bank’s assessment of the merits of a tax position subsequently changes, the bank should adjust
the amount of tax benefit it has recognized and accrue interest and penalties for any underpayment of
taxes in accordance with the tax laws of each applicable jurisdiction. In this regard, a tax position that
previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first
subsequent quarterly reporting period in which the threshold is met. A previously recognized tax
position that no longer meets the more-likely-than-not recognition threshold should be derecognized in
the first subsequent quarterly reporting period in which the threshold is no longer met.
Temporary differences result when events are recognized in one period on the bank's books but are
recognized in another period on the bank's tax return. These differences result in amounts of income
or expense being reported in the Consolidated Report of Income in one period but in another period in
the tax returns. There are two types of temporary differences. Deductible temporary differences
reduce taxable income in future periods. Taxable temporary differences result in additional taxable
income in future periods.
For example, a bank's provision for loan and lease losses is expensed for financial reporting purposes
in one period. However, for some banks, this amount may not be deducted for tax purposes until the
loans are actually charged off in a subsequent period. This deductible temporary difference
"originates" when the provision for loan and lease losses is recorded in the financial statements and
"turns around" or "reverses" when the loans are subsequently charged off, creating tax deductions.
Other deductible temporary differences include writedowns of other real estate owned, the recognition
of loan origination fees, and other postemployment benefits expense.
Depreciation can result in a taxable temporary difference if a bank uses the straight-line method to
determine the amount of depreciation expense to be reported in the Consolidated Report of Income but
uses an accelerated method for tax purposes. In the early years, tax depreciation under the
accelerated method will typically be larger than book depreciation under the straight-line method.
During this period, a taxable temporary difference originates. Tax depreciation will be less than book
depreciation in the later years when the temporary difference reverses. Therefore, in any given year,
the depreciation reported in the Consolidated Report of Income will differ from that reported in the
bank's tax returns. However, total depreciation taken over the useful life of the asset will be the same
under either method. Other taxable temporary differences include the undistributed earnings of
unconsolidated subsidiaries and associated companies and amounts funded to pension plans that
exceed the recorded expense.
Some events do not have tax consequences and therefore do not give rise to temporary differences.
Certain revenues are exempt from taxation and certain expenses are not deductible. These events
were previously known as "permanent differences." Examples of such events (for federal income tax
purposes) are interest received on certain obligations of states and political subdivisions in the U.S.,
premiums paid on officers' life insurance policies where the bank is the beneficiary, and 50 percent1
of cash dividends received on the corporate stock of domestic U.S. corporations owned less than
20 percent.
1
The percentage is 70 percent for tax years beginning before January 1, 2018.
FFIEC 051
A-59
(9-18)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
Deferred tax assets shall be calculated at the report date by applying the "applicable tax rate" (defined
below) to the bank's total deductible temporary differences and operating loss carryforwards. A
deferred tax asset shall also be recorded for the amount of tax credit carryforwards available to the
bank. Based on the estimated realizability of the deferred tax asset, a valuation allowance should be
established to reduce the recorded deferred tax asset to the amount that is considered "more likely
than not" (i.e., greater than 50 percent chance) to be realized.
Deferred tax liabilities should be calculated by applying the "applicable tax rate" to total taxable
temporary differences at the report date.
Net operating loss carrybacks and carryforwards and tax credit carryforwards ‒ When a bank's
deductions exceed its income for income tax purposes, it has sustained a net operating loss. To the
extent permitted under a taxing authority’s laws and regulations, a net operating loss that occurs in a
year following periods when the bank had taxable income may be carried back to recover income taxes
previously paid. The tax effects of any loss carrybacks that are realizable through a refund of taxes
previously paid is recognized in the year the loss occurs. In this situation, the applicable income taxes
on the Consolidated Report of Income will reflect a credit rather than an expense. For tax years
beginning before January 1, 2018, a bank may carry back net operating losses for two years for federal
income tax purposes. However, in general, for tax years beginning on or after January 1, 2018, a bank
may no longer carry back operating losses to recover taxes paid in prior tax years.
Generally, a net operating loss that occurs when loss carrybacks are not available becomes a net
operating loss carryforward. For tax years beginning before January 1, 2018, a bank may carry
operating losses forward 20 years for federal income tax purposes. For tax years beginning on or after
January 1, 2018, net operating losses can be carried forward indefinitely for federal income tax
purposes; however, for net operating losses arising in such tax years, the amount of loss that can be
carried forward and deducted in a particular year is limited to 80 percent of a bank’s taxable income in
that year.
Tax credit carryforwards are tax credits which cannot be used for tax purposes in the current year, but
which can be carried forward to reduce taxes payable in a future period.
Deferred tax assets are recognized for net operating loss and tax credit carryforwards just as they are
for deductible temporary differences. As a result, a bank can recognize the benefit of a net operating
loss for tax purposes or a tax credit carryforward to the extent the bank determines that a valuation
allowance is not considered necessary (i.e., if the realization of the benefit is more likely than not).
Applicable tax rate ‒ The income tax rate to be used in determining deferred tax assets and liabilities is
the rate under current tax law that is expected to apply to taxable income in the periods in which the
deferred tax assets or liabilities are expected to be realized or paid. For tax years beginning on or after
January 1, 2018, the federal corporate tax rate is a flat 21 percent rate. This flat rate replaced the
graduated federal corporate tax rate structure that applied in prior tax years. If a bank is subject to
graduated tax rates and the bank's income level is such that graduated tax rates are a significant
factor, then the bank shall use the average graduated tax rate applicable to the amount of estimated
taxable income in the period in which the deferred tax asset or liability is expected to be realized or
settled.
When the tax law changes, banks shall determine the effect of the change, adjust the deferred tax
asset or liability and include the effect of the change in Schedule RI, item 9, "Applicable income taxes
(on item 8.c)."
Valuation allowance – A valuation allowance must be recorded, if needed, to reduce the amount of
deferred tax assets to an amount that is more likely than not to be realized. Changes in the valuation
allowance generally shall be reported in Schedule RI, item 9, "Applicable income taxes (on item 8.c)."
The following discussion of the valuation allowance relates to the allowance, if any, included in the
FFIEC 051
A-60
(9-18)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
amount of net deferred tax assets or liabilities to be reported on the balance sheet (Schedule RC) and
in Schedule RC-F, item 2, or Schedule RC-G, item 2. This discussion does not address the
determination of the amount of deferred tax assets, if any, that is disallowed for regulatory capital
purposes and reported in Schedule RC-R, Part I, items 8 and 15.
Banks must consider all available evidence, both positive and negative, in assessing the need for a
valuation allowance. The future realization of deferred tax assets ultimately depends on the existence
of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Four sources of taxable income may be available to realize the deferred tax assets:
(1)
(2)
(3)
(4)
Taxable income in carryback years (which can be offset to recover taxes previously paid),
Reversing taxable temporary differences,
Future taxable income (exclusive of reversing temporary differences and carryforwards.
Tax-planning strategies.
In general, positive evidence refers to the existence of one or more of the four sources of taxable
income. To the extent evidence about one or more sources of income is sufficient to support a
conclusion that a valuation allowance is not necessary (i.e., the bank can conclude that the deferred
tax asset is more likely than not to be realized), other sources need not be considered. However, if a
valuation allowance is needed, each source of income must be evaluated to determine the appropriate
amount of the allowance needed.
Evidence used in determining the valuation allowance should be subject to objective verification. The
weight given to evidence when both positive and negative evidence exist should be consistent with the
extent to which it can be verified. Sources (1) and (2) listed above are more susceptible to objective
verification and, therefore, may provide sufficient evidence regardless of future events.
The consideration of future taxable income (exclusive of reversing temporary differences and
carryforwards) as a source for the realization of deferred tax assets will require subjective estimates
and judgments about future events which may be less objectively verifiable.
Examples of negative evidence include:
•
•
•
•
•
Cumulative losses in recent years.
A history of operating loss or tax credit carryforwards expiring unused.
Losses expected in early future years by a presently profitable bank.
Unsettled circumstances that, if unfavorably resolved, would adversely affect future profit levels.
A brief carryback or carryforward that would limit the ability to realize the deferred tax asset.
Examples of positive evidence include:
•
•
•
A strong earnings history exclusive of the loss that created the future deductible amount (tax loss
carryforward or deductible temporary difference) coupled with evidence indicating that the loss is
an aberration rather than a continuing condition.
Existing contracts that will generate significant income.
An excess of appreciated asset value over the tax basis of an entity's net assets in an amount
sufficient to realize the deferred tax asset.
When realization of a bank's deferred tax assets is dependent upon future taxable income, the
reliability of a bank's projections is very important. The bank's record in achieving projected results
under an actual operating plan will be a strong measure of this reliability. Other factors a bank should
consider in evaluating evidence about its future profitability include but are not limited to current and
expected economic conditions, concentrations of credit risk within specific industries and geographical
areas, historical levels and trends in past due and nonaccrual assets, historical levels and trends in
loan loss reserves, and the bank's interest rate sensitivity.
FFIEC 051
A-61
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
When strong negative evidence, such as the existence of cumulative losses, exists, it is extremely
difficult for a bank to determine that no valuation allowance is needed. Positive evidence of significant
quality and quantity would be required to counteract such negative evidence.
For purposes of determining the valuation allowance, a tax-planning strategy is a prudent and feasible
action that would result in realization of deferred tax assets and that management ordinarily might not
take, but would do so to prevent an operating loss or tax credit carryforward from expiring unused. For
example, a bank could accelerate taxable income to utilize carryforwards by selling or securitizing loan
portfolios, selling appreciated securities, or restructuring nonperforming assets. Actions that
management would take in the normal course of business are not considered tax-planning strategies.
Significant expenses to implement the tax-planning strategy and any significant losses that would result
from implementing the strategy shall be considered in determining any benefit to be realized from the
tax-planning strategy. Also, banks should consider all possible consequences of any tax-planning
strategies. For example, loans pledged as collateral would not be available for sale.
The determination of whether a valuation allowance is needed for deferred tax assets should be made
for total deferred tax assets, not for deferred tax assets net of deferred tax liabilities. In addition, the
evaluation should be made on a jurisdiction-by-jurisdiction basis. Separate analyses should be
performed for amounts related to each taxing authority (e.g., federal, state, and local).
Deferred tax assets (net of the valuation allowance) and deferred tax liabilities related to a particular
tax jurisdiction (e.g., federal, state, and local) may be offset against each other for reporting purposes.
A resulting debit balance shall be included in "Other assets" and reported in Schedule RC-F, item 2. A
resulting credit balance shall be included in "Other liabilities" and reported in Schedule RC-G, item 2.
(A bank may report a net deferred tax debit, or asset, for one tax jurisdiction (e.g., federal taxes) and
also report a net deferred tax credit, or liability, for another tax jurisdiction (e.g., state taxes).
Interim period applicable income taxes – When preparing its year-to-date Consolidated Report of
Income as of the end of March, June, and September ("interim periods"), a bank generally should
determine its best estimate of its effective annual tax rate for the full year, including both current and
deferred portions and considering all tax jurisdictions (e.g., federal, state and local). To arrive at its
estimated effective annual tax rate, a bank should divide its estimated total applicable income taxes
(current and deferred) for the year by its estimated pretax income for the year (excluding discontinued
operations). This rate would then be applied to the year-to-date pretax income to determine the
year-to-date applicable income taxes at the interim date.
Intraperiod allocation of income taxes – When the Consolidated Report of Income for a period includes
the results of "Discontinued operations" that are reportable in Schedule RI, item 11, the total amount of
the applicable income taxes for the year to date shall be allocated in Schedule RI between item 9,
"Applicable income taxes (on item 8.c)," and item 11, "Discontinued operations, net of applicable
income taxes."
The applicable income taxes on operating income (item 9) shall be the amount that the total applicable
income taxes on pretax income, including both current and deferred taxes (calculated as described
above), would have been for the period had the results of "Discontinued operations" been zero.
The difference between item 9, "Applicable income taxes (on item 8.c)," and the total amount of the
applicable taxes shall then be reflected in item 11 as applicable income taxes on discontinued
operations.
Tax calculations by tax jurisdiction – Separate calculations of income taxes, both current and deferred
amounts, are required for each tax jurisdiction. However, if the tax laws of the state and local
jurisdictions do not significantly differ from federal income tax laws, then the calculation of deferred
income tax expense can be made in the aggregate. The bank would calculate both current and
deferred tax expense considering the combination of federal, state, and local income tax rates. The
rate used should consider whether amounts paid in one jurisdiction are deductible in another
FFIEC 051
A-62
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
jurisdiction. For example, since state and local taxes are deductible for federal purposes, the
aggregate combined rate would generally be (1) the federal tax rate plus (2) the state and local tax
rates minus (3) the federal tax effect of the deductibility of the state and local taxes at the federal tax
rate.
Income taxes of a bank subsidiary of a holding company – A bank should generally report income tax
amounts in its Consolidated Reports of Condition and Income as if it were a separate entity. A bank's
separate entity taxes include taxes of subsidiaries of the bank that are included with the bank in a
consolidated tax return. In other words, when a bank has subsidiaries of its own, the bank and its
consolidated subsidiaries are treated as one separate taxpayer for purposes of computing the bank's
applicable income taxes. This treatment is also applied in determining net deferred tax asset
limitations for regulatory capital purposes.
During profitable periods, a bank subsidiary of a holding company that files a consolidated tax return
should record current tax expense for the amount that would be due on a separate entity basis.
Certain adjustments resulting from the consolidated status may, however, be made to the separate
entity calculation as long as these adjustments are made on a consistent and equitable basis. For
example, the consolidated group's single surtax exemption may be allocated among the holding
company affiliates if such an allocation is equitable and applied consistently. Such allocations should
be reflected in the bank's applicable income taxes, rather than as "Other transactions with stockholders
(including a parent holding company)" in Schedule RI-A, Changes in Bank Equity Capital.
In addition, bank subsidiaries should first compute their taxes on a separate entity basis without
considering the alternative minimum tax (AMT).1 The AMT should be determined on a consolidated
basis, and if it exceeds the regular tax on a consolidated basis, the holding company should allocate
that excess to its affiliates on an equitable and consistent basis. The allocation method must be based
upon the portion of tax preferences, adjustments, and other items causing the AMT to be applicable at
the consolidated level that are generated by the parent holding company and each bank and nonbank
subsidiary. In no case should amounts be allocated to bank subsidiaries that have not generated any
tax preference or positive tax adjustment items. Furthermore, the AMT allocated to banks within the
consolidated group should not exceed the consolidated AMT in any year.
In future years when a consolidated AMT credit carryforward is utilized, the credit must be reallocated
to the subsidiary banks. The allocation should be done on an equitable and consistent basis based
upon the amount of AMT giving rise to the credit that had been previously allocated. In addition, the
amount of AMT credit reallocated to affiliates within the consolidated group should not exceed the
consolidated AMT credit in any year. All AMT allocations should be reflected in the bank's applicable
income taxes, rather than as "Other transactions with stockholders (including a parent holding
company)" in Schedule RI-A, Changes in Bank Equity Capital.
Similarly, bank subsidiaries incurring a loss should record an income tax benefit and receive an
equitable refund from their parent, if appropriate. The refund should be based on the amount they
would have received on a separate entity basis, adjusted for statutory tax considerations, and shall be
made on a timely basis.
An exception to this rule is made when the bank, on a separate entity basis, would not be entitled to a
current refund because it has exhausted benefits available through carryback on a separate entity
basis, yet the holding company can utilize the bank's tax loss to reduce the consolidated liability for the
current year. In this situation, realization of the tax benefit is assured. Accordingly, the bank may
1 The 2017 federal tax law known as the Tax Cuts and Jobs Act eliminates the corporate AMT for tax years
beginning on or after January 1, 2018. The law also provides for the use of existing AMT credits to offset a bank’s
regular tax liability for tax years beginning in 2018, 2019, and 2020, with any remaining AMT credit carryforwards fully
refundable in the tax year beginning in 2021.
FFIEC 051
A-63
(9-18)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
recognize a current tax benefit in the year in which the operating loss occurs, provided the holding
company reimburses the bank on a timely basis for the amount of benefit recognized. Any such tax
benefits recognized in the loss year should be reflected in the bank's applicable income taxes. If timely
reimbursement is not made, the bank cannot recognize the tax benefit in the current year. Rather, the
tax loss becomes a net operating loss carryforward for the bank.
A parent holding company shall not adopt an arbitrary tax allocation policy within its consolidated group
if it results in a significantly different amount of subsidiary bank applicable income taxes than would
have been provided on a separate entity basis. If a holding company forgives payment by the
subsidiary of all or a significant portion of the current portion of the applicable income taxes computed
in the manner discussed above, such forgiveness should be treated as a capital contribution and
reported in Schedule RI-A, item 11, "Other transactions with stockholders (including a parent holding
company)," and in Schedule RI-E, item 5.
Further, if the subsidiary bank pays an amount greater than its separate entity current tax liability
(calculated as previously discussed), the excess should be reported as a cash dividend to the holding
company in Schedule RI-A, item 9. Payment by the bank of its deferred tax liability, in addition to its
current tax liability, is considered an excessive payment of taxes. As a result, the deferred portion
should likewise be reported as a cash dividend. Failure to pay the subsidiary bank an equitable refund
attributable to the bank's net operating loss should also be considered a cash dividend paid by the
bank to the parent holding company.
Purchase business combinations -- In purchase business combinations (as described in the Glossary
entry for "business combinations"), banks shall recognize as a temporary difference the difference
between the tax basis of acquired assets or liabilities and the amount of the purchase price allocated to
the acquired assets and liabilities (with certain exceptions specified in ASC Topic 740). As a result, the
acquired asset or liability shall be recorded gross and a deferred tax asset or liability shall be recorded
for any resulting temporary difference.
In a purchase business combination, a deferred tax asset shall generally be recognized at the date of
acquisition for deductible temporary differences and net operating loss and tax credit carryforwards of
either company in the transaction, net of an appropriate valuation allowance. The determination of the
valuation allowance should consider any provisions in the tax law that may restrict the use of an
acquired company's carryforwards.
Subsequent recognition (i.e., by elimination of the valuation allowance) of the benefit of deductible
temporary differences and net operating loss or tax credit carryforwards not recognized at the
acquisition date will depend on the source of the benefit. If the valuation allowance relates to
deductible temporary differences and carryforwards of the acquiring company established before the
acquisition, then subsequent recognition is reported as a reduction of income tax expense. If the
benefit is related to the acquired company's deductible temporary differences and carryforwards, then
the benefit is subsequently recognized by first reducing any goodwill related to the acquisition, then by
reducing all other noncurrent intangible assets related to the acquisition, and finally, by reducing
income tax expense.
Alternative Minimum Tax1 – Any taxes a bank must pay in accordance with the alternative minimum tax
(AMT) shall be included in the bank's current tax expense. Amounts of AMT paid can be carried
forward in certain instances to reduce the bank's regular tax liability in future years. The bank may
record a deferred tax asset for the amount of the AMT credit carryforward, which shall then be
evaluated in the same manner as other deferred tax assets to determine whether a valuation allowance
is needed.
1
See the footnote on the alternative minimum tax on page A-63.
FFIEC 051
A-64
(9-18)
GLOSSARY
FFIEC 051
GLOSSARY
Income Taxes (cont.):
Other tax effects – A bank may have transactions or items that are reportable in particular items in
Schedule RI-A of the Consolidated Report of Income such as "Restatements due to corrections of
material accounting errors and changes in accounting principles," and “Other comprehensive income.”
These transactions or other items may enter into the determination of taxable income in some year (not
necessarily the current year), but are not included in the pretax income reflected in Schedule RI of the
Consolidated Report of Income. They shall be reported in Schedule RI-A net of related income tax
effects. These effects may increase or decrease the bank's total tax liability calculated on its tax
returns for the current year or may be deferred to one or more future periods.
For further information, see ASC Topic 740.
Intangible Assets: See "business combinations" and the instructions to Consolidated Report of
Condition Schedule RC-M, item 2.
Interest-Bearing Account: See "deposits."
Interest Capitalization: See "capitalization of interest costs."
Interest Rate Swaps: See "derivative contracts."
Internal-Use Computer Software: 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-use computer software is software that meets both of the following characteristics:
(1) The software is acquired, internally developed, or modified solely to meet the bank's internal
needs; and
(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 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/operation stage. Upgrades
of and enhancements to existing internal-use software, i.e., modifications to software that result in
additional functionality, also go through the three aforementioned stages of development.
FFIEC 051
A-65
(12-18)
GLOSSARY
FFIEC 051
GLOSSARY
Internal-Use Computer Software (cont.):
Computer software costs that are incurred in the preliminary project stage should be expensed as
incurred.
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
software costs generally should be amortized on a straight-line basis over the estimated useful life of
the software.
Only the following application development stage costs should be capitalized:
(1) External direct costs of materials and services consumed in developing or obtaining internal-use
software;
(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 internal-use 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.
General and administrative costs and overhead costs should not be capitalized as internal-use
software costs.
During the post-implementation/operation stage, internal and external training costs and maintenance
costs should be expensed as incurred.
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 Long-Lived 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, a bank 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): 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 Regulation D. 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. For further information, see the Glossary entry for
“International Banking Facility (IBF)” in the instructions for the FFIEC 031 and FFIEC 041 Call Reports.
FFIEC 051
A-66
(12-18)
GLOSSARY
FFIEC 051
GLOSSARY
Interoffice Accounts: See "suspense accounts."
Investments in Common Stock of Unconsolidated Subsidiaries: See “equity method of accounting”
and “subsidiaries.”
Joint Venture: See "subsidiaries."
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.
Since the creation of the ASC by the FASB, standards for lease accounting have been set forth in
ASC Topic 840, Leases. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which added
ASC Topic 842, Leases. The FASB has since issued various codification improvements for leases in
ASU 2018-10, “Codification Improvements to Topic 842, Leases”; ASU 2018-11, “Leases (Topic 842):
Targeted Improvements”; ASU 2018-20, “Leases (Topic 842): Narrow-Scope Improvements for
Lessors”; and ASU 2019-01, “Leases (Topic 842): Codification Improvements”; hereafter referred to
collectively as the “Standard” or ASC Topic 842. Upon an institution’s adoption of the Standard, based
on the effective dates below, ASC Topic 842 supersedes ASC Topic 840, Leases. Accordingly,
institutions that are required to adopt or have elected to early adopt ASC Topic 842 should follow the
guidance in that section of this Glossary entry.
For institutions that are public business entities as defined in U.S. GAAP, ASC Topic 842 is effective
for fiscal years beginning after December 15, 2018, including interim reporting periods within those
fiscal years. Thus, for institutions that are public business entities, ASC Topic 842 is currently in effect.
(For further information, see the Glossary entry for “Public Business Entity.”) For institutions that are
not public business entities, the FASB issued ASU 2020-05, “Effective Dates for Certain Entities,” on
June 3, 2020, to defer the effective date of ASC Topic 842 by one year. As amended by ASU 2020-05,
ASC Topic 842 will take effect for entities that are not public business entities for fiscal years
beginning after December 15, 2021, and interim reporting periods within fiscal years beginning after
December 15, 2022. Early application of the Standard is permitted for all institutions. An institution
that early adopts the Standard must apply it in its entirety to all lease-related transactions. If an
institution chooses to early adopt the Standard for financial reporting purposes, the institution should
implement the new Standard in its Call Report for the same quarter-end report date.
ASC Topic 842 does not fundamentally change the lessor accounting in ASC Topic 840; however,
ASC Topic 842 aligns terminology between lessee and lessor accounting and brings key aspects of
lessor accounting into alignment with the FASB’s new revenue recognition guidance in ASC Topic 606,
Revenue from Contracts with Customers. As a result, the classification difference between direct
financing leases and sales-type leases for lessors in ASC Topic 840 moves from a risk-and-rewards
principle to a transfer-of-control principle. There is no longer a distinction in the treatment of real estate
and non-real estate leases by lessors in ASC Topic 842.
The most significant change that ASC Topic 842 makes, upon its adoption by an institution, is to lessee
accounting. Under the predecessor accounting standard (ASC Topic 840), lessees recognize lease
assets and lease liabilities on the balance sheet for capital leases, but do not recognize operating
leases on the balance sheet. ASC Topic 842 instead requires institutions that lease premises and
other fixed assets as lessees to recognize a right-of-use (ROU) asset and a lease liability on its
balance sheet for most operating leases. When preparing to implement ASC Topic 842, institutions will
need to analyze their existing lease contracts to determine the cumulative-effect adjustment and other
balance sheet entries to record as of the effective date of the adoption of ASC Topic 842.
Accounting for Leases under ASC Topic 840
This section of this Glossary entry applies to institutions that have not adopted ASC Topic 842. For
institutions that have adopted ASC Topic 842, Leases, this section is no longer applicable. Refer to the
“Accounting for Leases under ASC Topic 842” section below.
FFIEC 051
A-67
(9-20)
GLOSSARY
FFIEC 051
GLOSSARY
Lease Accounting (cont.):
Accounting and Reporting by an Institution as Lessee – Any lease entered into by a lessee institution
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
institution's normal depreciation policy (except, if appropriate, the amortization period shall be the lease
term) unless the lease involves land only. The interest expense portion of each lease payment shall be
calculated to result in a constant rate of interest on the balance of the debt obligation. In the
Consolidated Report of Condition, the property "asset" is to be reported in Schedule RC, item 6,
“Premises and fixed assets,” and the liability for capitalized leases in Schedule RC-M, items 5.b, “Other
borrowings,” and 10.b, “Amount of ‘Other borrowings’ that are secured.” In the Consolidated Report of
Income, the interest expense portion of the capital lease payments is to be reported in Schedule RI,
item 2.c, “Interest on trading liabilities and other borrowed money,” and the amortization expense on
the asset is to be reported in Schedule RI, item 7.b, “Expenses of premises and fixed assets.”
If any one of the following criteria is met, a lease must be accounted for as a capital lease:
(1) ownership of the property is transferred to the lessee at the end of the lease term, or
(2) the lease contains a bargain purchase option, or
(3) the lease term represents at least 75 percent of the estimated economic life of the leased property,
or
(4) the present value of the minimum lease payments at the beginning of the lease term is 90 percent
or more of the fair value of the leased property to the lessor at the inception of the lease less any
related investment tax credit retained by and expected to be realized by the lessor.
If none of the above criteria is met, the lease should be accounted for as an operating lease. Normally,
rental payments should be charged to expense over the term of the operating lease as they become
payable.
NOTE: If a lease involves land only, the lease must be capitalized if either of the first two criteria
above is met. Where a lease that involves land and building meets either of these two criteria, the land
and building must be separately capitalized by the lessee. The accounting for a lease involving land
and building that meets neither of the first two criteria should conform to the standards prescribed by
ASC Topic 840.
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 an institution sells premises or fixed assets
and leases back the property, the lease shall be treated as a capital lease if it meets any one of the
four criteria above for capitalization. Otherwise, the lease shall be accounted for as an operating lease.
As a general rule, the institution shall defer any gain resulting from the sale. For capital leases, this
deferred gain is amortized in proportion to the depreciation taken on the leased asset. For operating
leases, the deferred gain is amortized in proportion to the rental payments the institution will make over
the lease term. The unamortized deferred gain is to be reported in Schedule RC-G, item 4, "All other
liabilities.” (Exceptions to the general rule on deferral that permit full or partial recognition of a gain at
the time of the sale may occur if the leaseback covers less than substantially all of the property that
was sold or if the total gain exceeds the minimum lease payments.)
If the fair value of the property at the time of the sale is less than the book value of the property, the
difference between these two amounts shall be recognized as a loss immediately. In this case, if the
sales price is less than the fair value of the property, the additional loss shall be deferred since it is in
substance a prepayment of rent. Similarly, if the fair value of the property sold is greater than its book
value, any loss on the sale shall also be deferred. Deferred losses shall be amortized in the same
manner as deferred gains as described above.
For further information, see ASC Subtopic 840-40, Leases – Sale-Leaseback Transactions.
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
Accounting and Reporting by an Institution as Lessor – Unless a long-term creditor is also involved in
the transaction, a lease entered into by a lessor institution 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 (minimum lease payments plus
estimated residual value plus initial direct costs less unearned income). Other methods of income
recognition may be used if the results are not materially different.
The following two additional criteria must be met for a lease to be classified as a direct financing lease:
(1) Collectability of the minimum lease payments is reasonably predictable.
(2) No important uncertainties surround the amount of unreimbursable costs yet to be incurred by the
lessor under the lease.
When a lessor institution 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. Based on a projected cash flow analysis for the lease term, unearned and
deferred income shall be amortized to income at a constant rate only in those years of the lease term in
which the net investment is positive. In the years in which the net investment is not positive, no income
is to be recognized on the leveraged lease.
If a lease is neither a direct financing lease nor a leveraged lease, the lessor institution shall account
for it as an operating lease. The leased property shall be reported as "Other assets" and depreciated
in accordance with the institution's normal policy. Rental payments are generally credited to income
over the term of an operating lease as they become receivable.
Accounting for Leases under ASC Topic 842
This section of this Glossary entry applies to institutions that have adopted ASC Topic 842. Institutions
that have not adopted ASC Topic 842 should continue to refer to the “Accounting for Leases under
ASC Topic 840” section above.
Lease Term – The Standard defines lease term as the noncancellable period for which a lessee has
the right to use an underlying asset, together with all of the following:
(1) Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that
option;
(2) Periods covered by an option to terminate the lease if the lessee is reasonably certain not to
exercise that option; and
(3) Periods covered by an option to extend (or not to terminate) the lease in which exercise of the
option is controlled by the lessor.
Reasonable certainty is based on an assessment of factors at the commencement date of the lease
that would create an economic incentive for the lessee either to exercise or not exercise an option to
extend, terminate, or purchase. The commencement date of the lease is the date on which the lessor
makes the underlying asset available for use by the lessee. Examples of factors that could create
economic incentives that should be considered include (1) a lease renewal option priced below market
rates and (2) significant leasehold improvements that would be impaired, business interruption costs,
and relocation costs if the lease term were not extended. For additional information on the lease term,
reasonable certainty, and commencement date, refer to ASC Topic 842.
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A-68a
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
Accounting and Reporting by an Institution as Lessee – ASC Topic 842 distinguishes between an
operating lease and a finance lease (formerly classified as a capital lease under ASC Topic 840). The
Standard requires all lessees to report an ROU asset and a lease liability on the balance sheet for most
operating and finance leases. The ROU asset reflects the lessee’s control over the leased item’s
economic benefits during the lease term.
While most leases will be reported on a lessee’s balance sheet, the Standard permits a lessee to make
an accounting policy election to exempt leases from balance sheet recognition as long as the lease, as
of its commencement date, has a lease term, as defined above, of 12 months or less and does not
include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.
This accounting policy election for short-term leases must be made by class of underlying asset.
In the Consolidated Report of Condition, ROU assets for operating leases and finance leases should
be reported in Schedule RC, item 6, “Premises and fixed assets.” Lease liabilities for finance leases
should be reported in Schedule RC-M, items 5.b, “Other borrowings,” and 10.b, “Amount of ‘Other
borrowings’ that are secured.” Lease liabilities for operating leases should be reported in
Schedule RC-G, item 4, “All other liabilities.”
In the Consolidated Report of Income, the interest expense on lease liabilities for finance leases
(measured using the effective interest method) should be reported in Schedule RI, item 2.c, “Interest
on trading liabilities and other borrowed money.” The amortization expense (typically straight-line) on
the ROU asset for a finance lease should be reported in Schedule RI, item 7.b, “Expenses of premises
and fixed assets.” The ROU asset for a finance lease generally should be amortized on a straight-line
basis from the commencement date of the lease to the earlier of the end of the useful life of the ROU
asset or the end of the lease term.
In the Consolidated Report of Income, operating lease expenses are to be reported in Schedule RI,
item 7.b, “Expenses of premises and fixed assets,” as a single lease cost calculated so that this cost
(i.e., the interest on the lease liability and the amortization of the ROU asset) is allocated over the lease
term, generally on a straight-line basis.
Lease Classification - Lessee – A lessee classifies a lease as a finance lease1 when the terms of the
lease effectively transfer control of the underlying asset and the substance of the transaction is
reflective of a sale. This occurs when any of the following five criteria are met:
(1) The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.
(2) The lease grants the lessee an option to purchase the underlying asset that the lessee is
reasonably certain to exercise.
(3) The lease term is for the major part of the remaining economic life of the underlying asset.
However, if the commencement date of the lease falls at or near the end of the economic life of the
underlying asset, this criterion shall not be used for the purpose of classifying the lease.
(4) The present value of the sum of the lease payments, as defined in ASC Topic 842, and any
residual value guaranteed by the lessee that is not already reflected in the lease payments equals
or exceeds substantially all of the fair value of the underlying asset.
(5) The underlying asset is such a specialized nature that it is expected to have no alternative use to
the lessor at the end of the lease term.
If none of the finance lease criteria are met and the lease is not a short-term lease for which the
institution has elected the short-term lease policy election, the lease is classified as an operating lease.
1 ASC Topic 842 requires that land be considered a separate lease component in a contract involving land and other
assets, unless the effect of separately accounting for the land portion of the contract is insignificant.
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
Lease Measurement – Lessee – The determination of whether a contract is or contains a lease is
performed at its inception (the date the contract is agreed upon) and is reassessed only if the terms
and conditions of the contract are changed. The classification and measurement of a lease are
determined at the commencement date of the lease.
At the commencement date, the ROU asset consists of:
(1) The amount of the initial measurement of the lease liability;
(2) Any lease payments made to the lessor at or before the commencement date, minus any lease
incentives received; and
(3) Any initial direct costs incurred by the lessee.
At the commencement date, the lease liability equals the present value of the lease payments not yet
paid, discounted using the discount rate for the lease.1 The lease payments consist of:
(1) Fixed lease payments, less any lease incentives payable to the lessee;
(2) Variable lease payments tied to an index or a rate, measured using the index or rate at lease
commencement;
(3) The exercise price of an option to purchase the leased asset, if that option is reasonably certain of
being exercised;
(4) Payments for penalties to terminate the lease, if it is reasonably certain that such penalties will be
incurred;
(5) Fees owed by the lessee to the owners of a special-purposes entity for structuring the transaction;
and
(6) Amounts probable of being owed by the lessee under residual value guarantees.
Regulatory Capital Treatment of Leases for a Lessee – To the extent an ROU asset arises due to a
lessee’s lease of a tangible asset (e.g., building or equipment), the lessee institution should treat the
ROU asset as a tangible asset not subject to deduction from regulatory capital. ROU assets must be
risk weighted at 100 percent in accordance with the agencies’ regulatory capital rules and included in
the lessee institution’s calculation of total risk-weighted assets, except for an institution subject to the
community bank leverage ratio (CBLR) framework. In addition, the lessee institution should include its
ROU assets in its total assets for leverage ratio calculation purposes.
Accounting and Reporting by an Institution as Lessor – ASC Topic 842 does not significantly change
the lessor’s accounting under ASC Topic 840. ASC Topic 842 clarifies that, for sales-type and direct
financing leases, the lessor assesses its net investment in the lease (described below under “Lease
Measurement – Lessor”) for impairment under ASC Topic 310, Receivables, or ASC Subtopic 326-20,
Financial Instruments – Credit Losses – Measured at Amortized Cost, as applicable.2 Operating lease
1
As defined in ASC Topic 842, the discount rate for the lease for a lessee is the rate implicit in the lease (see the
footnote in the “Lease Measurement – Lessor – Sales-Type and Direct Financing Leases” section below) unless that
rate cannot be readily determined, in which case the lessee is required to use its incremental borrowing rate. The
lessee’s incremental borrowing rate is the rate of interest that the lessee would have to pay to borrow on a
collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
2
The guidance in ASC Subtopic 326-20, which introduces the current expected credit losses methodology (CECL),
should be applied to the net investment in the lease once this Subtopic is adopted.
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
assets remain on the lessor’s balance sheet and shall be assessed for impairment under ASC
Topic 360, Property, Plant, and Equipment.
In the Consolidated Report of Condition, the lessor should report the net investment in the lease in
Schedule RC-C, Part I, item 10, “Lease financing receivables.” In the Consolidated Report of Income,
the income on the lease should be reported in Schedule RI, item 1.b, “Income from lease financing
receivables.”
For operating leases, the lessor shall depreciate the leased property in accordance with the institution’s
normal policy and reports the property (net of depreciation) in Schedule RC-F, item 6, “All other
assets.” Rental income is reported in Schedule RI, item 5.l, “Other noninterest income," over the term
of an operating lease.
Lease Classification – Lessor – Accounting by an institution as a lessor results in classifying a lease as
a sales-type, direct financing, or operating lease based on an assessment of the criteria described in
the following paragraphs at the commencement date of the lease.
A lessor classifies a lease as a sales-type lease if any one of the five criteria described above under
“Lease Classification – Lessee” is met, subject to the clarification of criterion (4) described below.
Otherwise, the lessor is required to assess whether the lease is a direct financing lease or an operating
lease.
A lease that does not meet any of the five criteria for a sales-type lease, but meets the following two
criteria, shall be classified as a direct financing lease.
(1) The present value of the sum of the lease payments and any residual value guaranteed by the
lessee that is not already reflected in the lease payments and/or any other third party unrelated to
the lessor equals or exceeds substantially all of the fair value of the underlying asset; and
(2) It is probable that the lessor will collect the lease payments plus any amount necessary to satisfy a
residual value guarantee.
If a lease does not meet the criteria for a sales-type or a direct financing lease, the lessor institution
shall account for the lease as an operating lease.
For purposes of assessing criterion (4) above under “Lease Classification – Lessee” for a sales-type
lease and criterion (1) above for a direct financing lease, the codification improvements in ASU
2019-01 clarified that, for a lessor that is not a manufacturer or a dealer (e.g., a financial institution),
the fair value of the underlying asset at lease commencement is ordinarily its cost, reflecting any
volume or trade discounts that may apply, instead of fair value as defined in ASC Topic 820, Fair
Value Measurement. However, if significant time lapses between the acquisition of the underlying
asset and lease commencement, a lessor institution is required to apply the definition of fair value in
ASC Topic 820.
Lease Measurement – Lessor – Sales-Type and Direct Financing Leases – At the commencement
date of the lease, the net investment in a sales-type or a direct financing lease is measured at the
present value of the following amounts, discounted using the rate implicit in the lease:1
(1) The lease payments not yet received by the lessor;
1
As defined in ASC Topic 842, the rate implicit in the lease is the rate of interest that, at a given date, causes the
aggregate present value of (a) the lease payments and (b) the amount that a lessor expects to derive from the
underlying asset following the end of the lease term to equal the sum of (1) the fair value of the underlying asset
minus any related investment tax credit retained and expected to be realized by the lessor and (2) any deferred initial
direct costs of the lessor.
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
(2) The amount the lessor expects to derive from the underlying asset following the end of the lease
term that is guaranteed by the lessee or any other third party unrelated to the lessor; and
(3) The amount the lessor expects to derive from the underlying asset following the end of the lease
term that is not guaranteed by the lessee or any other third party unrelated to the lessor (i.e., the
unguaranteed residual asset).
In a direct financing lease, selling profit, if any, and initial direct costs are deferred at the
commencement date and included in the net investment in the lease, but any selling loss arising from
the lease must be recognized. When no selling profit or loss is recognized in a sales-type lease, initial
direct costs are deferred at the commencement date and recognized over the lease term as part of the
net investment in the lease.
In addition, at the lease commencement date, the lessor should derecognize the carrying amount of
the underlying asset (if previously recognized) unless the lease is a sales-type lease and collectibility of
the lease payments is not probable as discussed below.
Collectibility – Lessor – Sales-Type and Direct Financing Leases – In recording either a sales-type
lease or a direct financing lease, the collectibility of amounts due under the lease, including any
amount necessary to satisfy a residual value guarantee, must be probable at the lease commencement
date. If collectibility is not probable, a lease that would otherwise be classified as a direct financing
lease should be accounted for as an operating lease. For a sales-type lease, if collectibility of amounts
due under the lease is not probable at the lease commencement date, the institution, as lessor, should
neither derecognize the underlying asset nor recognize the net investment in the lease. Instead, the
institution, as lessor, should recognize lease payments received as a liability until the earliest of the
following:
(1) The collectibility of amounts due under the lease becomes probable; or
(2) The contract has been terminated and the lease payments received are nonrefundable; or
(3) The institution, as lessor, has repossessed the leased asset, it has no further obligation under the
lease to the lessee, and the lease payments received are nonrefundable.
In a sales-type lease, any selling profit or loss arising from the lease is recognized in full and initial
direct costs generally are expensed by the lessor at the commencement date unless there is no selling
profit or loss to be recognized or collectibility of amounts due under the lease is not probable.
Operating Lease - Lessor – In an operating lease, the leased asset remains on the lessor’s balance
sheet and continues to be depreciated over its estimated useful life. The lessor defers initial direct
costs at the commencement date of the lease. The lease payments and initial direct costs generally
are recognized in income and expense, respectively, over the lease term on a straight-line basis, or
on another systematic and rational basis if it is more representative of the pattern in which benefit is
expected to be derived from (i.e., income is earned from) the use of the underlying asset. Other
methods of income recognition may be used if the results are not materially different. The lessor is
required to use the guidance in ASC Topic 842 to assess the probability of collection of the lease
payments from a lessee at, as well as after, the lease commencement date. A lessor may elect to
supplement the guidance in ASC Topic 842 with the portfolio allowance approach in ASC
Subtopic 450-20, Contingencies – Loss Contingencies.
Leveraged Leases – Leveraged leases no longer exist under ASC Topic 842. The Standard
grandfathers the ASC Topic 840 accounting treatment for leveraged leases existing on the date of
adoption of ASC Topic 842. However, lessors are required to follow the criteria in ASC Topic 842
when classifying and accounting for any grandfathered leveraged leases modified after the date of
adoption of the Standard.
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GLOSSARY
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GLOSSARY
Lease Accounting (cont.):
Sale and Leaseback Transactions – In a sale and leaseback transaction, the seller-lessee sells an
asset it owns to the buyer-lessor and leases back all or a portion of the same asset for all or a portion
of the asset’s remaining economic life. For the transfer of an asset in a sale and leaseback transaction
to qualify for sale treatment, ASC Topic 842 requires certain criteria within ASC Topic 606 to be met.
In general, under ASC Topic 606, an institution is required to determine whether a contract exists
(within the meaning of ASC Topic 606) and whether the seller-lessee has satisfied its performance
obligations by transferring control of the asset to the buyer-lessor.
These criteria also require, among other things, that a contract with a related party have commercial
substance (that is, the risk, timing, or amount of the seller-lessee’s future cash flows is expected to
change as a result of the contract). Related party contracts that lack commercial substance will not
qualify for sale treatment in sale and leaseback transactions.
An option for the seller-lessee to repurchase the asset would preclude accounting for the transfer of the
asset as a sale unless both of the following criteria are met:
(1) The exercise price of the option is the fair value of the asset at the time the option is exercised; and
(2) There are alternative assets, substantially the same as the transferred asset, readily available in
the marketplace.
However, if the contract for the asset transfer contains a repurchase option and the leased asset is
real estate, control of the asset has not been transferred to the buyer-lessor and therefore the
transaction is not expected to meet the criteria necessary under ASC Topic 606 to recognize a sale.
Additionally, if the leaseback is a finance lease for the seller-lessee, control has not been transferred,
and thus there is no sale.
The classification of a lease can also impact whether a sale has occurred for accounting purposes. In
the event a leaseback is classified as a finance lease by the seller-lessee, or a sales-type lease by the
buyer-lessor, then a sale has not occurred since a finance lease is essentially the purchase of an asset
and a sales-type lease is essentially a sale of an asset. As such, the transaction would be considered
a failed sale and leaseback transaction.
If the transaction qualifies as a sale in accordance with ASC Topic 606 and the transaction would not
be considered a failed sale and leaseback, any gain or loss on the sale is recognized immediately. If
the transaction would not meet the criteria for a sale under ASC Topic 606, or when the leaseback
would not be classified as an operating lease by the seller-lessee (i.e., would be a failed sale and
leaseback), the transaction would be accounted for as a financing arrangement by the seller-lessee
and a lending transaction by the buyer-lessor. The seller-lessee would not derecognize the transferred
asset and would continue to depreciate the asset as if it were the legal owner. Any sales proceeds
received by the seller-lessee would be reported as a liability.
Letter of Credit: A letter of credit is a document issued by a bank 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 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 to provide
payment on drafts drawn in accordance with the terms of the document.
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A-68f
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GLOSSARY
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GLOSSARY
Letter of Credit (cont.):
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 bank to pay only upon the presentation of a draft or other documents as
specified in the letter of credit and not require the issuing bank 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 bank that
establishes the unqualified obligation of the account party to reimburse the issuing bank for all
payments made under the letter of credit.
There are four basic types of letters of credit:
(1) 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.
(2) A letter of credit sold for cash is a letter of credit for which the bank 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 bank may have advanced funds to the account party for the
purchase of such letters of credit on a secured or unsecured basis.
(3) A travelers' letter of credit is issued to facilitate travel. This letter of credit is addressed by the
bank 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.
(4) A standby letter of credit is a letter of credit or similar arrangement that:
(a) represents an obligation on the part of the issuing bank to a designated third party (the
beneficiary) contingent upon the failure of the issuing bank's customer (the account party) to
perform under the terms of the underlying contract with the beneficiary, or
(b) obligates the bank 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.
Limited-Life Preferred Stock: See "preferred stock."
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A-69
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GLOSSARY
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GLOSSARY
Loan: For purposes of these reports, a loan is generally an extension of credit resulting from direct
negotiations between a lender and a borrower. The reporting bank 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 bank may also sell a loan or a portion of
a loan, regardless of the method by which it acquired the loan.
Loans may take the form of promissory notes, acknowledgments of advance, due bills, invoices,
overdrafts, acceptances, and similar written or oral obligations.
Among the extensions of credit reportable as loans in Schedule RC-C, which covers both loans held for
sale and loans held for investment, 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 bank and subsequently acquired by it
through purchase or discount;
(3) customers' liability to the reporting bank on drafts paid under letters of credit for which the bank
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 bank has given deposit credit to customers;
(5) paper pledged by the bank 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 bank 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 the
discussion of loan participations in the Glossary entry for "transfers of financial assets").
Loan assets held for trading are to be reported in Schedule RC, item 5, "Trading assets."
See also "loan 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 fair value if the changes in fair value are
included in earnings) and to all types of lenders. For further information, see ASC Subtopic 310-20.
A bank 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.
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Loan Fees (cont.):
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 bank 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.
(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 bank 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 bank holds a large number of similar loans for which
prepayments are probable and the timing and amount of prepayments can be reasonably
estimated, the bank may consider estimates of future principal prepayments in the calculation of
the constant effective yield necessary to apply the interest method. Once a bank 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
(or the amortized cost basis of the new loan if the institution has adopted ASC Topic 326,
Financial Instruments–Credit Losses).
The net investment in, or the amortized cost basis of, the new loan, as applicable, should include
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
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Loan Fees (cont.):
restructuring involving a modification of terms, fees received should be applied as a reduction of
the recorded investment in, or the amortized cost basis of, the loan, as applicable; all related
costs, including direct loan origination costs, should be charged to expense as incurred. (See the
Glossary entry for "troubled debt restructurings" for further discussion.)
(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.1
Incremental direct costs are costs to originate a loan that (a) result directly from and are essential to the
lending transaction and (b) would not have been incurred by the lender had that lending transaction not
occurred. The specified activities performed by the lender are evaluating the prospective borrower's
financial condition; evaluating and recording guarantees, collateral, and other security arrangements;
negotiating loan terms; preparing and processing loan documents; and closing the transaction. The
costs directly related to those activities include only that portion of the employees' total compensation
and payroll-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 1-9 above"
in Schedule RC-C, Part I. Net unamortized direct loan origination costs shall be added to the related
loan balances in Schedule RC-C, Part I. Amounts of loan origination, commitment, and other fees and
costs recognized as an adjustment of yield should be reported under the appropriate subitem of item 1,
"Interest income," in Schedule RI. 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 reported as "Other noninterest income" on Schedule RI.
Loan Impairment: This Glossary entry applies to institutions that have not adopted ASC Topic 326,
Financial Instruments–Credit Losses. Institutions that have adopted ASC Topic 326 should refer to the
Glossary entry for “allowance for credit losses.”
The accounting standard for impaired loans is ASC Topic 310, Receivables (formerly FASB Statement
No. 114, "Accounting by Creditors for Impairment of a Loan," as amended). For further information,
refer to ASC Topic 310.
Each institution is responsible for maintaining an allowance for loan and lease losses (allowance) at a
level that is appropriate to cover estimated credit losses in its entire portfolio of loans and leases held
for investment, i.e., loans and leases that the bank has the intent and ability to hold for the foreseeable
future or until maturity or payoff. ASC Topic 310 sets forth measurement methods for estimating the
/
1
For purposes of these reports, a bank which deems its costs for these lending activities not to be material and
which need not maintain records on a loan-by-loan basis for other purposes may expense such costs as incurred.
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GLOSSARY
Loan Impairment (cont.):
portion of the overall allowance for loan and lease losses attributable to individually impaired loans.
For the remainder of the portfolio, an appropriate allowance must be maintained in accordance with
ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement No. 5,
“Accounting for Contingencies”). For comprehensive guidance on the maintenance of an appropriate
allowance, banks should refer to the Interagency Policy Statement on the Allowance for Loan and
Lease Losses dated December 13, 2006, and the Glossary entry for “allowance for loan and lease
losses." National banks should also refer to the Office of the Comptroller of the Currency's Handbook
for National Bank Examiners discussing the allowance for loan and lease losses.
In general, loans are impaired under ASC Topic 310 when, based on current information and events, it
is probable that an institution will be unable to collect all amounts due (i.e., both principal and interest)
according to the contractual terms of the original loan agreement. An institution should apply its normal
loan review procedures when identifying loans to be individually evaluated for impairment under
ASC Topic 310. When an individually evaluated loan is deemed impaired under ASC Topic 310 and is
not collateral dependent, an institution must measure impairment using the present value of expected
future cash flows discounted at the loan’s effective interest rate (i.e., the contractual interest rate
adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or
acquisition of the loan), except that as a practical expedient, an institution may measure impairment
based on a loan’s observable market price. As discussed in the following paragraph, the agencies
require the impairment of an impaired collateral dependent loan to be measured using the fair value of
collateral method. A loan is collateral dependent if repayment of the loan is expected to be provided
solely by the underlying collateral and there are no other available and reliable sources of repayment.
A creditor should consider estimated costs to sell, on a discounted basis, in the measurement of
impairment if those costs are expected to reduce the cash flows available to repay or otherwise satisfy
the loan. If the measure of an impaired loan is less than the recorded investment in the loan, an
impairment should be recognized by creating an allowance for estimated credit losses for the impaired
loan or by adjusting an existing allowance with a corresponding charge or credit to "Provision for loan
and lease losses."
For purposes of the Consolidated Reports of Condition and Income, the impairment of an impaired
collateral dependent loan must be measured using the fair value of collateral method. In general, any
portion of the recorded investment in an impaired collateral dependent loan (including recorded
accrued interest, net deferred loan fees or costs, and unamortized premium or discount) in excess of
the fair value of the collateral (less estimated costs to sell, if applicable) that can be identified as
uncollectible should be promptly charged off against the allowance for loan and lease losses.
An institution should not provide an additional allowance for estimated credit losses on an individually
impaired loan over and above what is specified by ASC Topic 310. The allowance established under
ASC Topic 310 should take into consideration all available information existing as of the Call Report
date that indicates that it is probable that a loan has been impaired. All available information would
include existing environmental factors such as industry, geographical, economic, and political factors
that affect collectibility.
ASC Topic 310 also addresses the accounting by creditors for all loans that are restructured in troubled
debt restructurings involving a modification of terms, except loans that are measured at fair value or the
lower of cost or fair value. According to ASC Topic 310, all loans restructured in troubled debt
restructurings are impaired loans. For guidance on troubled debt restructurings, see the Glossary entry
for "troubled debt restructurings."
As with all other loans, all impaired loans should be reported as past due or nonaccrual loans in
Schedule RC-N in accordance with the schedule's instructions. A loan identified as impaired is one for
which it is probable that the institution will be unable to collect all principal and interest amounts due
according to the contractual terms of the original loan agreement. Therefore, a loan that is not already
in nonaccrual status when it is first identified as impaired will normally meet the criteria for placement in
nonaccrual status at that time. Exceptions may arise when a loan not previously in nonaccrual status
is identified as impaired because its terms have been modified in a troubled debt restructuring, but the
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Loan Impairment (cont.):
borrower’s sustained historical repayment performance for a reasonable time prior to the restructuring
is consistent with the modified terms of the loan and the loan is reasonably assured of repayment (of
principal and interest) and of performance in accordance with its modified terms. This determination
must be supported by a current, well documented credit evaluation of the borrower's financial condition
and prospects for repayment under the revised terms. Exceptions may also arise for those purchased
credit-impaired loans for which the criteria for accrual of income under the interest method are met as
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”). Any cash payments received on impaired loans in
nonaccrual status should be reported in accordance with the criteria for the cash basis recognition of
income in the Glossary entry for "nonaccrual status." For further guidance, see the Glossary entries for
“nonaccrual status” and “purchased credit-impaired loans and debt securities.”
Loan Secured by Real Estate: For purposes of these reports, a loan secured by real estate is a loan
that, at origination, is secured wholly or substantially by a lien or liens on real property for which the lien
or liens are central to the extension of the credit – that is, the borrower would not have been extended
credit in the same amount or on terms as favorable without the lien or liens on real property. To be
considered wholly or substantially secured by a lien or liens on real property, the estimated value of the
real estate collateral at origination (after deducting any more senior liens held by others) must be
greater than 50 percent of the principal amount of the loan at origination.
A loan satisfying the criteria above, except a loan to a state or political subdivision in the U.S., is to be
reported as a loan secured by real estate in Schedule RC-C, Part I, item 1, and related items in the
Consolidated Reports of Condition and Income, (1) regardless of whether the loan is secured by a first
or a junior lien; (2) regardless of whether the loan was originated by the reporting bank or purchased
from others and, if originated by the reporting bank, regardless of the department within the bank or
bank subsidiary that made the loan; (3) regardless of how the loan is categorized in the bank’s records;
(4) and regardless of the purpose of the financing. Only in a transaction where a lien or liens on real
property (with an estimated collateral value greater than 50 percent of the loan’s principal amount at
origination) have been taken as collateral solely through an abundance of caution and where the loan
terms as a consequence have not been made more favorable than they would have been in the
absence of the lien or liens, would the loan not be considered a loan secured by real estate for
purposes of the Consolidated Reports of Condition and Income. In addition, when a loan is partially
secured by a lien or liens on real property, but the estimated value of the real estate collateral at
origination (after deducting any more senior liens held by others) is 50 percent or less of the principal
amount of the loan at origination, the loan should not be categorized as a loan secured by real estate.
Instead, the loan should be reported in one of the other loan categories used in these reports based on
the purpose of the loan.
The following are examples of the application of the preceding guidance:
(1) A bank loans $700,000 to a dental group to construct and equip a building that will be used as its
dental office. The loan will be secured by both the real estate and the dental equipment. At
origination, the estimated values of the building, upon completion, and the equipment are $400,000
and $350,000, respectively. The loan should be reported as a loan secured by real estate in
Schedule RC-C, Part I, item 1.a.(2), “Other construction loans and all land development and other
land loans.” In contrast, if the estimated values of the building and equipment at origination were
$340,000 and $410,000, respectively, the loan should not be reported as a loan secured by real
estate. Instead, the loan should be reported in Schedule RC-C, Part I, item 4, “Commercial and
industrial loans.”
(2) A bank grants a $25,000 line of credit and a $125,000 term loan to a commercial borrower for
working capital purposes on the same date. The loans will be cross-collateralized by equipment
with an estimated value of $40,000 and a third lien on the borrower’s residence, which has an
estimated value of $140,000 and first and second liens with unpaid balances payable to other
lenders totaling $126,000. The two loans should be considered together to determine whether
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GLOSSARY
Loan Secured by Real Estate (cont.):
they are secured by real estate. Because the estimated equity in the real estate collateral
available to the bank is $14,000, the two cross-collateralized loans for $150,000 should not be
reported as loans secured by real estate. Instead, the loans should be reported in Schedule RC-C,
Part I, item 4, “Commercial and industrial loans.”
(3) A bank grants a $50,000 working capital loan and takes a first lien on a vacant commercial building
lot as collateral. The estimated value of the lot is $30,000. The loan should be reported as a loan
secured by real estate in Schedule RC-C, Part I, item 1.a.(2), “Other construction loans and all land
development and other land loans,” unless the lien has been taken as collateral solely through an
abundance of caution and where the loan terms as a consequence have not been made more
favorable than they would have been in the absence of the lien.
(4) A bank grants a $10,000 home equity line of credit secured by a junior lien on a 1-4 family
residential property. The bank also has a loan to the same borrower that is secured by a first lien
on the same 1-4 family residential property and has an unpaid principal balance of $71,000. There
are no intervening liens and the line of credit will be used for household, family, and other personal
expenditures. The estimated value of the residential property at the origination of the home equity
line of credit is $75,000. Consistent with the risk-based capital treatment of these loans, the two
loans should be considered together to determine whether the home equity line of credit should be
reported as a loan secured by real estate. Because the value of the collateral is greater than
50 percent of the first lien balance plus the amount of the home equity line of credit, loans
extended under the line of credit should be reported as loans secured by real estate in
Schedule RC-C, Part I, item 1.c.(1), “Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit.” In contrast, if a creditor other than the bank holds
the first lien on the borrower’s property, the estimated value of the collateral to the bank for the
home equity line of credit would have been $4,000 ($75,000 less the $71,000 first lien held by the
other creditor), which is 50 percent or less of the amount of the line of credit at origination. In this
case, the bank should not report loans extended under the line of credit as loans secured by real
estate in Schedule RC-C, Part I, item 1. Rather, the loans should be reported as “Loans to
individuals for household, family, and other personal expenditures” in Schedule RC-C, Part I,
item 6.b, “Other revolving credit plans.”
Loss Contingencies: A loss contingency is an existing condition, situation, or set of circumstances that
involves uncertainty as to possible loss that will be resolved when one or more future events occur or
fail to occur. An estimated loss (or expense) from a loss contingency (for example, pending or
threatened litigation) must be accrued by a charge to income if it is probable that an asset has been
impaired or a liability incurred as of the report date and the amount of the loss can be reasonably
estimated.
A contingency that might result in a gain, for example, the filing of an insurance claim, shall not be
recognized as income prior to realization.
For further information, see ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly
FASB Statement No. 5, "Accounting for Contingencies").
Majority-Owned Subsidiary: See "subsidiaries."
Mandatory Convertible Debt: Mandatory convertible debt is a subordinated note or debenture with a
maturity of 12 years or less that obligates the holder to take the common or perpetual preferred stock
of the issuer in lieu of cash for repayment of principal by a date at or before the maturity date of the
debt instrument (so-called "equity contract notes").
Mergers: See "business combinations."
Money Market Deposit Account (MMDA): See "deposits."
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GLOSSARY
Nonaccrual Status: This entry covers, for purposes of these reports, the criteria for placing assets in
nonaccrual status (presented in the general rule below) and related exceptions, the reversal of
previously accrued but uncollected interest, the treatment of cash payments received on nonaccrual
assets and the criteria for cash basis income recognition, the restoration of a nonaccrual asset to
accrual status, and the treatment of multiple extensions of credit to one borrower.
General rule – Banks shall not accrue interest, amortize deferred net loan fees or costs, or accrete
discount on any asset (1) which is maintained on a cash basis because of deterioration in the financial
condition of the borrower, (2) for which payment in full of principal or interest is not expected, or (3)
upon which principal or interest has been in default for a period of 90 days or more unless the asset is
both well secured and in the process of collection.
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. An asset is
"in the process of collection" if collection of the asset 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 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 below.
Any state statute, regulation, or rule that imposes more stringent standards for nonaccrual of interest
takes precedence over this instruction.
Exceptions to the general rule – In the following situations, an asset 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 credit-impaired loan, pool of loans, or debt security accounted
for in accordance with that Subtopic, regardless of whether the loan, the loans in the pool, or debt
security had been maintained in nonaccrual status by its seller. (For purchased credit-impaired
loans with common risk characteristics that are aggregated and accounted for as a pool, the
determination of nonaccrual or accrual status should be made at the pool level, not at the individual
loan level.) For further information, see the Glossary entry for "purchased credit-impaired loans
and debt securities." For institutions that have adopted ASC Topic 326, Financial Instruments–
Credit Losses, as discussed in the “Definitions” section of the instructions for Schedule RC-N, this
exception is no longer available.
(2) The asset upon which principal or interest is due and unpaid for 90 days or more is a consumer
loan (as defined for Schedule RC-C, Part I, item 6, "Loans to individuals for household, family, and
other personal expenditures") or a loan secured by a 1-to-4 family residential property (as defined
for Schedule RC-C, Part I, item 1.c, Loans "Secured by 1-4 family residential properties").
Nevertheless, such loans should be subject to other alternative methods of evaluation to assure
that the bank's net income is not materially overstated. However, to the extent that the bank has
elected to carry such a loan in nonaccrual status on its books, the loan must be reported as
nonaccrual in Schedule RC-N.
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Nonaccrual Status (cont.):
Treatment of previously accrued interest – The reversal of previously accrued but uncollected interest
applicable to any asset placed in nonaccrual status 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, for institutions that have not adopted ASC Topic 326, 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 "accrued interest receivable" account on the balance sheet, (2) to
reverse the uncollected interest that has been accrued during the calendar year-to-date by debiting the
appropriate "interest and fee income on loans" 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" account on the balance sheet. The use of this method presumes
that bank management's additions to the allowance through charges to the "provision for loan and
lease losses" on the income statement have been based on an evaluation of the collectability of the
loan and lease portfolios and the "accrued interest receivable" account.
Institutions that have adopted ASC Topic 326 should refer to the Glossary entry for “accrued interest
receivable” for information on the treatment of previously accrued interest.
Treatment of cash payments and criteria for the cash basis recognition of income – When doubt exists
as to the collectibility of the remaining recorded investment in a nonaccrual asset (or the amortized cost
basis of a nonaccrual asset, if the institution has adopted ASC Topic 326), any payments received
must be applied to reduce the recorded investment in, or the amortized cost basis of, the asset, as
applicable, to the extent necessary to eliminate such doubt. Placing an asset in nonaccrual status
does not, in and of itself, require a charge-off, in whole or in part, of the asset's recorded investment or
amortized cost basis, as applicable. However, any identified losses must be charged off.
While an asset is in nonaccrual status, some or all of the cash interest payments received may be
treated as interest income on a cash basis as long as the remaining recorded investment in, or the
amortized cost basis of, the asset, as applicable, (i.e., after charge-off of identified losses, if any) is
deemed to be fully collectible.1 A bank's determination as to the ultimate collectibility of the asset's
remaining recorded investment, or amortized cost basis, as applicable, must be supported by a current,
well documented credit evaluation of the borrower's financial condition and prospects for repayment,
including consideration of the borrower's historical repayment performance and other relevant factors.
When recognition of interest income on a cash basis is appropriate, it should be handled in accordance
with generally accepted accounting principles. One acceptable accounting practice involves allocating
contractual interest payments among interest income, reduction of the recorded investment in, or the
amortized cost basis of, the asset, as applicable, and recovery of prior charge-offs. If this method is
used, the amount of income that is recognized would be equal to that which would have been accrued
on the asset's remaining recorded investment at the contractual rate. A bank may also choose to
account for the contractual interest in its entirety either as income, reduction of the recorded investment
in, or the amortized cost basis of, the asset, as applicable, or recovery of prior charge-offs, depending
on the condition of the asset, consistent with its accounting policies for other financial reporting
purposes.
1 An asset in nonaccrual status that is subject to the cost recovery method required by ASC Subtopic 325-40,
Investments-Other – Beneficial Interests in Securitized Financial Assets (formerly Emerging Issues Task Force Issue
No. 99-20, "Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests
That Continue to Be Held by a Transferor in Securitized Financial Assets"), should follow that method for reporting
purposes. In addition, when a purchased credit-impaired loan, pool of loans, or debt security that is accounted for in
accordance with ASC Subtopic 310-30 (or when a purchased credit-deteriorated asset that is accounted for in
accordance with ASC Subtopic 326-20, if the institution has adopted ASC Topic 326) has been placed on nonaccrual
status, the cost recovery method should be used, when appropriate.
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Nonaccrual Status (cont.):
Restoration to accrual status – As a general rule, a nonaccrual asset may be restored to accrual status
when (1) none of its principal and interest is due and unpaid, and the bank expects repayment of the
remaining contractual principal and interest, or (2) when it otherwise becomes well secured and in the
process of collection. If any interest payments received while the asset was in nonaccrual status were
applied to reduce the recorded investment in, or the amortized cost basis of, the asset, as applicable,
as discussed in the preceding section of this entry, the application of these payments to the asset's
recorded investment or amortized cost basis, as applicable, should not be reversed (and interest
income should not be credited) when the asset is returned to accrual status.
For purposes of meeting the first test, the bank must have received repayment of the past due principal
and interest unless, as discussed below, (1) the asset has been formally restructured 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 Subtopic 310-30 and it meets the criteria for accrual of income
under the interest method specified therein, or (3) the borrower has resumed paying the full amount of
the scheduled contractual 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 the following two criteria are met.
These criteria are, first, that all principal and interest amounts contractually due (including arrearages)
are reasonably assured of repayment within a reasonable period and, second, that there is a sustained
period of repayment performance (generally a minimum of six months) by the borrower in accordance
with the contractual terms involving payments of cash or cash equivalents. A loan that meets these
two criteria may be restored to accrual status, but must continue to be disclosed as past due in
Schedule RC-N until it has been brought fully current or until it later must be placed in nonaccrual
status. For institutions that have adopted ASC Topic 326, the second exception above, which applies
to purchased credit-impaired assets, is no longer available.
A loan or other debt instrument that has been formally restructured in a troubled debt restructuring so
as to be reasonably assured of repayment (of principal and interest) and of performance according to
its modified terms need not be maintained in nonaccrual status, provided the restructuring and any
charge-off taken on the asset are supported by a current, well documented credit evaluation of the
borrower's financial condition and prospects for repayment under the revised terms. Otherwise, the
restructured asset must remain in nonaccrual status. The evaluation must include consideration of the
borrower's sustained historical repayment performance for a reasonable period prior to the date on
which the loan or other debt instrument is returned to accrual status. A sustained period of repayment
performance generally would be a minimum of six months and would involve payments of cash or cash
equivalents. (In returning the asset to accrual status, sustained historical repayment performance for a
reasonable time prior to the restructuring may be taken into account.) Such a restructuring must
improve the collectability of the loan or other debt instrument in accordance with a reasonable
repayment schedule and does not relieve the bank from the responsibility to promptly charge off all
identified losses.
A troubled debt restructuring may involve a multiple note structure in which, for example, a troubled
loan is restructured into two notes. The first or "A" note represents the portion of the original loan
principal amount that is expected to be fully collected along with contractual interest. The second or
"B" note represents the portion of the original loan that has been charged off and, because it is not
reflected as an asset and is unlikely to be collected, could be viewed as a contingent receivable. For a
troubled debt restructuring of a collateral-dependent loan involving a multiple note structure, the
amount of the “A” note should be determined using the fair value of the collateral. The "A" note may
be returned to accrual status provided the conditions in the preceding paragraph are met and:
(1) there is economic substance to the restructuring and it qualifies as a troubled debt restructuring
under generally accepted accounting principles, (2) the portion of the original loan represented by the
"B" note has been charged off before or at the time of the restructuring, and (3) the "A" note is
reasonably assured of repayment and of performance in accordance with the modified terms.
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Nonaccrual Status (cont.):
Until the restructured asset is restored to accrual status, if ever, cash payments received must be
treated in accordance with the criteria stated above in the preceding section of this entry. In addition,
after a formal restructuring, if a restructured asset that has been returned to accrual status later meets
the criteria for placement in nonaccrual status as a result of past due status based on its modified
terms or for any other reasons, the asset must be placed in nonaccrual status.
For further information on formally restructured assets, see the Glossary entry for "troubled debt
restructurings."
Treatment of multiple extensions of credit to one borrower – As a general principle, nonaccrual status
for an asset should be determined based on an assessment of the individual asset's collectability and
payment ability and performance. Thus, when one loan to a borrower is placed in nonaccrual status, a
bank does not automatically have to place all other extensions of credit to that borrower in nonaccrual
status. When a bank has multiple loans or other extensions of credit outstanding to a single borrower,
and one loan meets the criteria for nonaccrual status, the bank should evaluate its other extensions of
credit to that borrower to determine whether one or more of these other assets should also be placed in
nonaccrual status.
Noninterest-Bearing Account: See "deposits."
Nontransaction Account: See "deposits."
NOW Account: See "deposits."
Offsetting: Offsetting is the reporting of assets and liabilities on a net basis in the balance sheet. Banks
are permitted to offset assets and liabilities recognized in the Consolidated Report of Condition when a
"right of setoff" exists. Under ASC Subtopic 210-20, Balance Sheet – Offsetting (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 bank has
multiple contracts, whether for the same type of conditional or exchange contract or for different types
of contracts, with a single counterparty that are subject to a contractual agreement that provides for the
net settlement of all contracts through a single payment in a single currency in the event of default or
termination of any one contract.
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Offsetting (cont.):
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 Consolidated Report of Condition. The reporting entity's choice to offset or not
to offset assets and liabilities recognized for conditional or exchange contracts must be applied
consistently.
Offsetting of assets and liabilities is also permitted by other accounting pronouncements identified in
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 ASC Subtopic 210-20 must be applied consistently.
According to the AICPA Audit and Accounting Guide for Depository and Lending Institutions,
ASC Subtopic 210-20 does not apply to securities borrowing or lending transactions. Therefore,
for purposes of the Consolidated Report of Condition, banks should not offset securities borrowing and
lending transactions in the balance sheet unless all the conditions set forth in ASC Subtopic 210-20 are
met.
See also "reciprocal balances."
One-Day Transaction: See "federal funds transactions."
Option: See "derivative contracts."
Organization Costs: See "start-up activities."
Other Real Estate Owned: See "foreclosed assets" and the instructions to Schedule RC-M, item 3.
Other-Than-Temporary Impairment: See “securities activities.” Institutions that have adopted
ASC Topic 326, Financial Instruments—Credit Losses, and have identified impairment in the
investment portfolio should no longer record any other-than-temporary impairment, as discussed in
the Glossary entry for “securities activities.”
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 "loan" rather than being treated as a negative deposit
balance.
Planned overdrafts in depositors' accounts are to be classified in Schedule RC-C, Part I, by type of
loan according to the nature of the overdrawn depositor. For example, a planned overdraft by a
commercial customer is to be classified as a "commercial and industrial loan."
Unplanned overdrafts in depositors' accounts are to be classified in Schedule RC-C, Part I, as "Other
loans," unless the depositor is a depository institution or a state or political subdivision in the U.S.
Such unplanned overdrafts should be reported in Schedule RC-C, Part I, item 2, "Loans to depository
institutions and acceptances of other banks," and item 8, "Obligations (other than securities and
leases) of states and political subdivisions in the U.S.," respectively.
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Overdraft (cont.):
An overdraft also occurs when a borrower’s loan secured by real estate has an escrow account for the
payment of taxes and/or insurance and the institution pays taxes or insurance on behalf of the
borrower when the escrow account does not have sufficient funds to cover the full amount of the
payment. Because escrow funds are deposits for purposes of these reports, an overdrawn escrow
account should be reported as a “loan” in Schedule RC-C, Part I, in the same loan category in
Schedule RC-C, Part I, as the related loan.
For purposes of treatment of overdrafts in depositors' accounts, a group of related transaction accounts
of a single type (i.e., demand deposit accounts or NOW accounts, but not a combination thereof)
maintained in the same right and capacity by a customer (a single legal entity) that is established under
a bona fide cash management arrangement by this customer function as, and are regarded as, one
account rather than as multiple separate accounts. In such a situation, overdrafts in one or more of the
transaction accounts within the group are not to be classified as loans unless there is a net overdraft
position in the group of related transaction accounts taken as a whole. (NOTE: Affiliates and
subsidiaries are considered separate legal entities.) For further information, see "cash management
arrangements."
The reporting institution's overdrafts on deposit accounts it holds with other depository institutions
(i.e., its "due from" accounts) are to be reported as borrowings in Schedule RC, item 16, except
overdrafts arising in connection with checks or drafts drawn by the reporting institution 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 RC-E until the funds are remitted).
Participations: See "transfers of financial assets."
Participations in Acceptances: See "bankers acceptances."
Participations in Pools of Securities: See "repurchase/resale agreements."
Pass-through Reserve Balances: Under the Monetary Control Act of 1980, and as reflected in
Federal Reserve Regulation D, both member and nonmember depository institutions may hold
the balances they maintain to satisfy reserve balance requirements (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 relationships.
In the balance sheet of the respondent bank, 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 the Consolidated Report of Condition, Schedule RC, item 1.a,
"Noninterest-bearing balances and currency and coin," or item 1.b, "Interest-bearing balances," as
appropriate.
In the balance sheet of the correspondent bank, the pass-through reserve balances are to be treated
as balances due to respondents and, to the extent that the balances have actually been passed
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Pass-through Reserve Balances (cont.):
through to the Federal Reserve, as balances due from the Federal Reserve. The balances due to
respondents are to be reflected in the balance sheet of the Consolidated Report of Condition,
Schedule RC, item 13.a, "Deposits in domestic offices," and in Schedule RC-E, Deposit Liabilities,
item 4. The balances due from the Federal Reserve are to be reflected on the balance sheet in
Schedule RC, item 1.b, "Interest-bearing balances."
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.”
Perpetual Preferred Stock: See "preferred stock."
Preauthorized Transfer Account: See "deposits."
Preferred Stock: Preferred stock is a form of ownership interest in a bank or other company which
entitles its holders to some preference or priority over the owners of common stock, usually with
respect to dividends or asset distributions in a liquidation.
Limited-life preferred stock is preferred stock that has a stated maturity date or that can be redeemed
at the option of the holder. It excludes those issues of preferred stock that automatically convert into
perpetual preferred stock or common stock at a stated date.
Perpetual preferred stock is preferred stock that does not have a stated maturity date or that cannot be
redeemed at the option of the holder. It includes those issues of preferred stock that automatically
convert into common stock at a stated date.
Premiums and Discounts: A premium arises when an institution 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 institutions are required to amortize.
A discount arises when an institution purchases a debt 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 that 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 that all institutions are required to accrete.
Except as discussed in the next two paragraphs, premiums and discounts are accounted for as
adjustments to the yield on an asset over its remaining life. A premium must be amortized and a
discount must be accreted from the date of purchase to maturity, and not to the 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 effective 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 only if the results are not materially different from the
interest method.
If an institution holds a large number of similar debt securities, loans, or other assets for which
prepayments are probable and the timing and amount of prepayments can be reasonably estimated,
the institution may consider estimates of future principal prepayments in the calculation of the constant
effective yield necessary to apply the interest method.
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Premiums and Discounts (cont.):
For callable debt securities that have explicit, non-contingent call features and are callable at fixed
prices and on preset dates, Accounting Standards Update No. 2017-08 (ASU 2017-08) amends
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”), to shorten the amortization period for any premiums on such debt
securities. Under the ASU, after it has been adopted, the excess of the amortized cost basis of such a
callable debt security over the amount repayable by the issuer at the earliest call date (i.e., the
premium) must be amortized to the earliest call date (unless the institution applies the guidance that
allows estimates of future principal prepayments to be considered in the effective yield calculation). If
the call option is not exercised at its earliest call date, the institution must reset the effective yield using
the payment terms of the debt security.1
A premium or discount may also arise when the reporting institution, acting either as a lender or a
borrower, is involved in an exchange of a note for assets other than cash and the interest rate is either
below the market rate or not stated, or the face amount of the note is materially different from the fair
value of the noncash assets exchanged. The noncash assets and the related note shall be recorded at
either the fair value of the noncash assets or the market value of the note, whichever is more clearly
determinable. The market value of the note would be its present value as determined by discounting
all future payments on the note using an appropriate interest rate, i.e., a rate comparable to that on
new loans of similar risk. The difference between the face amount and the recorded value of the note
is a premium or discount. This discount or premium shall be accounted for as an adjustment of the
interest income or expense over the life of the note using the interest method described above. For
further information, see ASC Subtopic 835-30, Interest – Imputation of Interest (formerly APB Opinion
No. 21, "Interest on Receivables and Payables").
Private Company: A private company is a business entity that is not a public business entity. For further
information, see the Glossary entry for “public business entity.”
Public Business Entity: Accounting Standards Update No. 2013-12, “Definition of a Public Business
Entity,” added this term to the Master Glossary in the Accounting Standards Codification. The
definition states that a business entity, such as bank or savings association, that meets any one of five
specified criteria is a public business entity for reporting purposes under U.S. GAAP. This also applies
for Call Report purposes. In contrast, a private company is a business entity that is not a public
business entity. An institution that is a public business entity is not permitted to apply private company
accounting alternatives when preparing its Call Report.
As defined in the ASC Master Glossary, a business entity is a public business entity if it meets any one
of the following criteria:
•
•
•
It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial
statements, or does file or furnish financial statements (including voluntary filers), with the SEC
(including other entities whose financial statements or financial information are required to be or
are included in a filing).
It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations
promulgated under the Act, to file or furnish financial statements with a regulatory agency other
than the SEC (such as one of the federal banking agencies).
It is required to file or furnish financial statements with a foreign or domestic regulatory agency in
preparation for the sale of or for purposes of issuing securities that are not subject to contractual
restrictions on transfer.
1
An institution must continue to amortize premiums over the contractual life of callable debt securities until the
effective date of ASU 2017-08 applicable to the institution unless early application of the ASU has been adopted.
For information on the ASU’s effective dates and transition, refer to ASU 2017-08.
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Public Business Entity (cont.):
• It has issued debt or equity securities that are traded, listed, or quoted on an exchange or an overthe-counter market, which includes an interdealer quotation or trading system for securities not
listed on an exchange (for example, OTC Markets Group, Inc., including the OTC Pink Markets, or
the OTC Bulletin Board).
• It has one or more securities that are not subject to contractual restrictions on transfer, and it is
required by law, contract, or regulation to prepare U.S. GAAP financial statements (including
footnotes) and make them publicly available on a periodic basis (for example, interim or annual
periods). An entity must meet both of these conditions to meet this criterion.
The Master Glossary also explains that if an entity meets the definition of a public business entity solely
because its financial statements or financial information is included in another entity’s filing with the
SEC, the entity is only a public business entity for purposes of financial statements that are filed or
furnished with the SEC, but not for other reporting purposes or for Call Report purposes.
If a bank or savings association does not meet any one of the first four criteria, it would need to
consider whether it meets both of the conditions included in the fifth criterion to determine whether it
would be a public business entity. With respect to the first condition under the fifth criterion, a stock
institution must determine whether it has a class of securities not subject to contractual restrictions on
transfer, which the FASB has stated means that the securities are not subject to management
preapproval on resale. A contractual management preapproval requirement that lacks substance
would raise questions about whether the stock institution meets this first condition.
If an institution is a wholly owned subsidiary of a holding company, an implicit contractual restriction on
transfer is presumed to exist on the institution’s common stock; therefore, if the institution has issued
no other debt or equity securities, the institution would not meet the first condition of the fifth criterion.
A mutual institution that has issued no debt securities also does not meet the first condition of the fifth
criterion. In all other scenarios (e.g., a closely-held bank or a Subchapter S bank that is not a wholly
owned subsidiary of a holding company), an institution should assess whether contractual restrictions
on transfer exist on its securities based on its individual facts and circumstances.
With respect to the second condition under the fifth criterion, an insured depository institution with
$500 million or more in total assets as of the beginning of its fiscal year is required by Section 36 of the
Federal Deposit Insurance Act and Part 363 of the FDIC’s regulations, “Annual Independent Audits and
Reporting Requirements,” to prepare and make publicly available audited annual U.S. GAAP financial
statements. In certain circumstances, an insured depository institution with $500 million or more in
total assets that is a subsidiary of a holding company may choose to satisfy this annual financial
statement requirement at a holding company level rather than at the institution level. An insured
depository institution of this size that satisfies the financial statement requirement of Section 36 and
Part 363 at either the institution level or the holding company level would meet the fifth criterion’s
second condition.
Purchase Acquisition: See "business combinations."
Purchased Credit-Deteriorated Assets: This Glossary entry applies to institutions that have adopted
ASC Topic 326, Financial Instruments–Credit Losses. Institutions that have not adopted ASC
Topic 326 should continue to refer to the Glossary entry for “purchased credit-impaired loans and
debt securities.”
Purchased credit-deteriorated (PCD) assets are acquired financial assets that, at acquisition, have
experienced a more-than-insignificant deterioration in credit quality since origination, as determined by
an acquirer’s assessment.
In accordance with ASC Topic 326, institutions are required to estimate and record an allowance for
credit losses (ACL) for PCD assets at the time of purchase. This acquisition date ACL is added to the
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Purchased Credit-Deteriorated Assets (cont.):
purchase price of the financial assets rather than recording these losses through provisions for credit
losses. This establishes the initial amortized cost basis of the PCD assets. An institution may use
either a discounted or an undiscounted cash flow method at acquisition to determine this ACL.
Subsequent ACL measurements for acquired financial assets with more-than-insignificant credit
deterioration since origination are to be measured under ASC Topic 326 as with (1) originated financial
assets and (2) purchased financial assets that do not have a more-than-insignificant deterioration in
credit quality at acquisition.
Institutions that measure expected credit losses for PCD assets on a pool basis shall continue to
evaluate whether financial assets in the pool continue to share similar risk characteristics with the other
financial assets in the pool. If there have been changes in credit risk, borrower circumstances,
recognition of a charge-off, or cash collections of interest applied to principal while the asset is in
nonaccrual status, an institution may determine that either the financial asset has similar risk
characteristics with another pool or the credit loss measurement should be performed on an individual
financial asset basis because the financial asset does not share risk characteristics with other financial
assets. Institutions that measure the ACL on a collective basis shall allocate the ACL and any
noncredit discount or premium to the individual PCD assets unless the institution elected the transition
option to account for existing purchased credit-impaired financial asset pools as PCD pools upon
adoption of ASC Topic 326.
Any difference between the unpaid principal balance of the PCD asset and the amortized cost basis of
the asset as of the acquisition date is the noncredit discount or premium. Provided the asset remains
on accrual status, the noncredit discount or premium recorded at acquisition is accreted into interest
income over the remaining life of the PCD asset on a level-yield basis.
For further information on the reporting of interest income on PCD assets, institutions should reference
the Glossary entry for “nonaccrual status” and ASC Subtopic 310-10, Receivables – Overall.
Deferred Tax Asset Considerations – An institution’s provisions for credit losses that increase the
amount of the ACL also increase the amount of the deductible temporary difference associated with the
ACL and the related deferred tax asset because the provisions are expensed for financial reporting
purposes. These increases in the ACL typically are not deducted in the same period for income tax
purposes. Tax deductions for credit losses typically occur in the period when financial assets are
actually charged off. However, an addition to the ACL as of the acquisition date of a PCD asset
(i.e., the “gross–up”) does not create such a deductible temporary difference or a deferred tax asset.
An institution’s deferred tax assets should be calculated at the report date by applying the "applicable
tax rate" based on the institution’s total deductible temporary differences. See the Glossary entry for
"income taxes" for information on how to determine the tax effect of such a temporary difference and
the need for any deferred tax asset valuation allowance.
See also the Glossary entries for “allowance for credit losses” and “nonaccrual status.”
Purchased Credit-Impaired Loans and Debt Securities: This Glossary entry applies to institutions that
have not adopted ASC Topic 326, Financial Instruments–Credit Losses. Institutions that have adopted
ASC Topic 326 should refer to the Glossary entry for “purchased credit-deteriorated assets.”
Purchased credit-impaired loans and debt securities are loans and debt securities that an institution
has purchased or otherwise acquired by completion of a transfer, including those acquired in a
purchase business combination, where there is evidence of deterioration of credit quality since the
origination of the loan or debt security and it is probable, at the acquisition date, that the institution will
be unable to collect all contractually required
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Purchased Credit-Impaired Loans and Debt Securities (cont.):
payments receivable. Such loans and debt securities must be accounted for in accordance with 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"). ASC Subtopic 310-30 does not apply to loans that an institution has originated.
Under ASC Subtopic 310-30, a purchased credit-impaired loan or debt security is initially recorded at
its purchase price (in a purchase business combination, the present value of amounts to be received).
ASC Subtopic 310-30 limits the yield that may be accreted on the loan or debt security (the accretable
yield) to the excess of the institution's estimate of the undiscounted principal, interest, and other cash
flows expected at acquisition to be collected on the asset over the institution's initial investment in the
asset. The excess of the contractually required payments receivable on the loan or debt security over
the cash flows expected to be collected, which is referred to as the nonaccretable difference, must not
be recognized as an adjustment of yield, loss accrual, or valuation allowance. Neither the accretable
yield nor the nonaccretable difference may be shown on the balance sheet (Schedule RC). After
acquisition, increases in the cash flows expected to be collected generally should be recognized
prospectively as an adjustment of the asset's yield over its remaining life. Decreases in cash flows
expected to be collected should be recognized as an impairment.
For purposes of applying the guidance in ASC Subtopic 310-30 to loans not accounted for as debt
securities, an institution may aggregate loans acquired in the same fiscal quarter that have common
risk characteristics and thereby use a composite interest rate and expectation of cash flows expected
to be collected for the pool. To be eligible for aggregation, each loan first should be determined
individually to meet the scope criteria in the first sentence of this Glossary entry. After determining that
certain acquired loans individually meet these scope criteria, the institution may evaluate whether such
loans have common risk characteristics, thus permitting the aggregation of such loans into one or more
pools. The aggregation must be based on common risk characteristics that include similar credit risk or
risk ratings, and one or more predominant risk characteristics, such as financial asset type, collateral
type, size, interest rate, date of origination, term, and geographic location. Upon establishment of a
pool of purchased credit-impaired loans, the pool becomes the unit of account.
Once a pool of purchased credit-impaired loans is assembled, the integrity of the pool must be
maintained. An institution should remove an individual loan from a pool of purchased credit-impaired
loans only if the institution sells, forecloses, or otherwise receives assets in satisfaction of the loan or if
the loan is written off. When an individual loan is removed from a pool of purchased credit-impaired
loans under these circumstances, the loan shall be removed at its carrying amount. Carrying amount
is defined as the loan’s current contractually required payments receivable less its remaining
nonaccretable difference, accretable yield, and any post-acquisition loan loss allowance. An institution
that accounts for a pool of purchased credit-impaired loans with common risk characteristics as one
unit of account may or may not document and maintain data on the nonaccretable difference and
accretable yield on a loan-by-loan basis. Accordingly, for purposes of determining the carrying amount
of an individual loan in the pool, an institution may apply a systematic and rational approach to
allocating the nonaccretable difference and accretable yield for the pool to an individual loan in the
pool. One acceptable approach is a pro rata allocation of the pool’s total remaining nonaccretable
difference and accretable yield to an individual loan in proportion to the loan’s current contractually
required payments receivable compared to the pool’s total contractually required payments receivable.
A refinancing or restructuring of a loan within a pool of purchased credit-impaired loans should not
result in the removal of the loan from the pool. In addition, a modification of the terms of a loan within a
pool of purchased credit-impaired loans is not considered a troubled debt restructuring under the scope
exceptions in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors
(formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt
Restructurings,” as amended). However, a modification of the terms of a purchased credit-impaired
loan accounted for individually must be evaluated to determine whether the modification represents a
troubled debt restructuring that should be accounted for in accordance with ASC 310-40. For further
information, see the Glossary entry for “troubled debt restructurings.”
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Purchased Credit-Impaired Loans and Debt Securities (cont.):
ASC Subtopic 310-30 does not prohibit an institution from placing a purchased credit-impaired loan
accounted for individually, a pool of purchased credit-impaired loans with common risk characteristics,
or a purchased credit-impaired debt security in nonaccrual status. Because a loan (including a loan
aggregated with other loans with common risk characteristics) or debt security accounted for in
accordance with ASC Subtopic 310-30 has evidence of deterioration of credit quality since origination,
an acquiring institution must determine upon acquisition whether it is appropriate to recognize the
accretable yield as income over the life of the loan, pool of loans, or debt security using the interest
method. In order to apply the interest method, the institution must have sufficient information to
reasonably estimate the amount and timing of the cash flows expected to be collected on the loan, loan
pool, or debt security. Thus, when the amount and timing of the cash flows cannot be reasonably
estimated at acquisition, the institution should place the purchased credit-impaired loan, pool, or debt
security in nonaccrual status and then apply the cost recovery method or cash basis income
recognition to the asset. (For purchased credit-impaired loans with common risk characteristics that
are aggregated and accounted for as a pool, the determination of nonaccrual or accrual status should
be made at the pool level, not at the individual loan level.) In addition, if a purchased credit-impaired
loan or debt security is acquired primarily for the rewards of ownership of the underlying collateral,
accrual of income is inappropriate and the loan or debt security should be placed in nonaccrual status.
The amount of a purchased credit-impaired loan, pool of loans, or debt security in nonaccrual status
should be reported in the appropriate items of Schedule RC-N, Past Due and Nonaccrual Loans,
Leases, and Other Assets, column C.
When accrual of income on a purchased credit-impaired loan accounted for individually or a purchased
credit-impaired debt security is appropriate (either at acquisition or at a later date when the amount and
timing of the cash flows can be reasonably estimated), the delinquency status of the individual asset
should be determined in accordance with its contractual repayment terms for purposes of reporting the
amount of the loan or debt security as past due in the appropriate items of Schedule RC-N, column A
or B. When accrual of income on a pool of purchased credit-impaired loans with common risk
characteristics is appropriate, delinquency status should be determined individually for each loan in the
pool in accordance with the individual loan’s contractual repayment terms for purposes of reporting the
amount of individual loans within the pool as past due in the appropriate items of Schedule RC-N,
column A or B.
ASC Subtopic 310-30 prohibits an institution from "carrying over" or creating loan loss allowances in
the initial accounting for purchased credit-impaired loans. This prohibition applies to the purchase of
an individual impaired loan, a pool or group of impaired loans, and impaired loans acquired in a
business combination. However, for a purchased credit-impaired loan accounted for individually (and
not accounted for as a debt security), if upon subsequent evaluation it is probable based on current
information and events that an institution will be unable to collect all cash flows expected at acquisition
(plus additional cash flows expected to be collected arising from changes in estimate after acquisition),
the purchased credit-impaired loan should be considered impaired for purposes of establishing an
allowance pursuant to ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB
Statement No. 5, “Accounting for Contingencies”) or ASC Subtopic 310-10, Receivables – Overall
(formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a Loan”), as
appropriate. For purchased credit-impaired loans with common risk characteristics that are aggregated
and accounted for as a pool, this impairment analysis should be performed subsequent to acquisition
at the pool level as a whole and not at the individual loan level. An institution should include
post-acquisition allowances on purchased credit-impaired loans and pools of purchased credit-impaired
loans in the overall allowance for loan and lease losses it reports in Schedule RC, item 4.c, and
Schedule RI-B, Part II, item 7.
In Schedule RC-C, Part I, Loans and Leases, an institution should report the amount of a purchased
credit-impaired loan in the appropriate loan category (items 1 through 9). Neither the accretable yield
nor the nonaccretable difference associated with a purchased credit-impaired loan should be reported
as unearned income in Schedule RC-C, Part I, item 11. In addition, an institution should report in
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Purchased Credit-Impaired Loans and Debt Securities (cont.):
Schedule RC-C, Part I, Memorandum items 7.a and 7.b, in the June and December reports only the
outstanding balance and amount, respectively, of all purchased credit-impaired loans reported as held
for investment in Schedule RC-C, Part I. An institution also should report the outstanding balance and
amount of those held-for-investment purchased credit-impaired loans reported in Schedule RC-C,
Part I, Memorandum items 7.a and 7.b, that are past due 30 through 89 days and still accruing, past
due 90 days or more and still accruing, or in nonaccrual status as of the report date in Schedule RC-N,
Memorandum items 9.a and 9.b, column A, B, or C, respectively, in the June and December reports
only in accordance with the past due and nonaccrual guidance provided above in this Glossary entry.
For further information, refer to ASC Subtopic 310-30.
Put Option: See "derivative contracts."
Real Estate ADC Arrangements: See "acquisition, development, or construction (ADC) arrangements."
Real Estate, Loan Secured By: See "loan secured by real estate."
Reciprocal Balances: Reciprocal balances arise when two depository institutions maintain deposit
accounts with each other; that is, when a reporting bank has both a due to and a due from balance with
another depository institution.
For purposes of the balance sheet of the Consolidated Report of Condition, reciprocal balances
between the reporting bank and other depository institutions may be reported on a net basis in
accordance with generally accepted accounting principles.
Renegotiated Troubled Debt: See "troubled debt restructurings."
Repurchase/Resale Agreements: 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 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.)
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Repurchase/Resale Agreements (cont.):
If a repurchase agreement both entitles and obligates the "selling" bank to repurchase or redeem the
transferred assets from the transferee ("purchaser"), the "selling" bank should report the transaction as
a secured borrowing if and only if the following conditions have been met:
(1) The assets to be repurchased or redeemed are the same or "substantially the same" as those
transferred, as defined by ASC Topic 860.
(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" bank 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.
(4) The agreement is entered into concurrently with the transfer.
Participations in pools of securities are to be reported in the same manner as security
repurchase/resale transactions.
Repurchase agreements reported as secured borrowings – If a repurchase agreement qualifies as a
secured borrowing, the "selling" institution should report the transaction as indicated below based on
whether the agreement involves a security or some other financial asset.
(1) Securities "sold" under agreements to repurchase are reported in Schedule RC, item 14.b,
"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 has an original maturity of one business day (or is under a
continuing contract) and is in immediately available funds, it should be reported in
Schedule RC, item 14.a, "Federal funds purchased."
(b) If the repurchase agreement has an original maturity of more than one business day or is not in
immediately available funds, it should be reported in Schedule RC-M, item 5.b.
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 RC, item 11, "Other assets." 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 RC, item 2, "Securities," or item 5, "Trading assets," as appropriate).
Resale agreements reported as secured borrowings. Similarly, if a resale agreement qualifies as a
secured borrowing, the "purchasing" institution should report the transaction as indicated below based
on whether the agreement involves a security or some other financial asset.
(1) Securities "purchased" under agreements to resell are reported in Schedule RC, item 3.b,
"Securities purchased under agreements to resell."
(2) Financial assets (other than securities) "purchased" under agreements to resell are reported as
follows:
(a) If the resale agreement has an original maturity of one business day (or is under a continuing
contract) and is in immediately available funds, it should be reported in Schedule RC, item 3.a,
"Federal funds sold.”
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Repurchase/Resale Agreements (cont.):
(b) If the resale agreement has an original maturity of more than one business day or is not in
immediately available funds, it should be reported in Schedule RC, item 4.b, “Loans and leases
held for investment.”
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 RC, item 20, "Other liabilities." If the "selling" institution
defaults under the terms of the repurchase agreement and is no longer entitled to redeem the noncash
assets, the "purchasing" bank should recognize these assets on its own balance sheet (e.g., securities
should be reported in Schedule RC, item 2, "Securities," or item 5, "Trading assets," as appropriate)
and initially measure them at fair value. However, if the "purchasing" bank has already sold the assets
it has "purchased," it should derecognize its obligation to return the assets. Otherwise, the
"purchasing" bank should not recognize the transferred financial assets (i.e., the financial assets
"purchased" under the resale agreement) on its balance sheet.
Repurchase/resale agreements reported as sales – If a repurchase agreement does not qualify as a
secured borrowing under ASC Topic 860, the selling bank should account for the transaction as a sale
of financial assets and a forward repurchase commitment. The selling bank should remove the
transferred assets from its balance sheet, record the proceeds from the sale of the transferred assets
(including the forward repurchase commitment), and record any gain or loss on the transaction.
Similarly, if a resale agreement does not qualify as a borrowing under ASC Topic 860, the purchasing
bank should account for the transaction as a purchase of financial assets and a forward resale
commitment. The purchasing bank should record the transferred assets on its balance sheet, 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."
Retail Sweep Arrangements: See “deposits.”
Revenue from Contracts with Customers: ASC Topic 606, Revenue from Contracts with Customers,
when it becomes effective as a result of Accounting Standards Update (ASU) 2014-09, provides
guidance on how an entity should recognize revenue from these transactions. The core principle of
Topic 606 is that an entity should recognize revenue at an amount that reflects the consideration to
which it expects to be entitled in exchange for transferring goods or services to a customer as part of
the entity’s ordinary activities. ASU 2014-09 also added Topic 610, Other Income, to the ASC.
Topic 610 applies to income recognition that is not within the scope of Topic 606, other Topics (such as
Topics 840 and 842 on leases, as applicable), or other revenue or income guidance. Topic 610 applies
to an institution’s sales of repossessed nonfinancial assets, such as other real estate owned (OREO).
See the Glossary entry for “foreclosed assets” for guidance on the accounting and reporting for the
sale of OREO and other repossessed nonfinancial assets.
ASC Topic 606 specifically excludes financial instruments and other contractual rights or obligations
within the scope of Topic 310, Receivables; Topic 320, Investments – Debt Securities; Topic 321,
Investments – Equity Securities; Topic 815, Derivatives and Hedging; Topic 860, Transfers and
Servicing, and certain other ASC Topics. Therefore, many common revenue streams in the financial
1
For institutions that are public business entities, as defined under U.S. GAAP, the new standard is effective for
fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. For
institutions that are not public business entities (i.e., that are private companies), the new standard is effective for
fiscal years beginning after December 15, 2018, and interim reporting periods within fiscal years beginning after
December 15, 2019. Early application of the new standard is permitted. See the Glossary entries for “public
business entity” and “private company” for the definitions of these terms.
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Revenue from Contracts with Customers (cont.):
sector, such as interest income, fair value adjustments, gains and losses on sales of financial
instruments, and loan origination fees, are not within the scope of ASC Topic 606. However, the
provisions of ASC Topic 606 may affect the timing for the recognition of, and the presentation of, those
revenue streams within the scope of this accounting standard, such as certain fees associated with
credit card arrangements, underwriting fees and costs, and deposit-related fees.
To achieve the core principle described above when accounting for transactions within the scope of
ASC Topic 606, an institution should apply the following steps as set forth in Topic 606:
Step 1:
Step 2:
Step 3:
Step 4:
Step 5:
Identify the contract(s) with a customer.
Identify the performance obligations in the contract.
Determine the transaction price.
Allocate the transaction price to the performance obligations in the contract.
Recognize revenue when (or as) the institution satisfies a performance obligation.
For further guidance on applying these steps, refer to ASC Topic 606.
Savings Deposits: See "deposits."
Securities Activities: Institutions should categorize their investments in debt securities as trading,
available-for-sale, or held-to-maturity consistent with ASC Topic 320, Investments-Debt 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.
For purposes of the Consolidated Reports of Condition and Income, debt and equity 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 on the balance sheet in Schedule RC, item 5, with unrealized gains and
losses recognized in current earnings and regulatory capital.
Institutions may also elect to report debt securities within the scope of ASC Topic 320 at fair value in
accordance with ASC Subtopic 825-10, Financial Instruments – Overall (formerly FASB Statement
No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”). For purposes of the
Consolidated Reports of Condition and Income, debt securities for which the fair value option is elected
should be classified as trading assets and reported on the balance sheet in Schedule RC, item 5, with
unrealized gains and losses recognized in current earnings and regulatory capital. In general, the fair
value option may be elected for an individual security only when it is first recognized; this election is
irrevocable.
Held-to-maturity securities are debt securities that an institution has the positive intent and ability to
hold to maturity. Held-to-maturity securities, which are generally reported at amortized cost, should be
reported on the balance sheet in Schedule RC, item 2.a. The amortized cost and fair value of held-tomaturity securities are reported by securities category in Schedule RC-B, columns A and B,
respectively. Debt securities not categorized as trading or held-to-maturity must be reported as
available-for-sale. An institution must report its available-for-sale debt securities at fair value on the
balance sheet, generally in Schedule RC, item 2.b, but unrealized gains and losses on such securities
are excluded from earnings and reported in a separate component of equity capital (i.e., in
Schedule RC, item 26.b, “Accumulated other comprehensive income”). The amortized cost and fair
value of available-for-sale debt securities are reported by securities category in Schedule RC-B,
columns C and D, respectively.
FASB Accounting Standards Update No. 2016-01, “Recognition and Measurement of Financial Assets
and Financial Liabilities” (ASU 2016-01), added ASC Topic 321, Investments – Equity Securities, to the
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Securities Activities (cont.):
ASC. ASU 2016-01 eliminated the classification of equity securities with readily determinable fair
values not held for trading as available-for-sale equity securities, which were measured at fair value
with changes in fair value generally recognized in other comprehensive income. As a consequence, all
institutions must measure investments in equity securities, except those accounted for under the equity
method and those that result in consolidation, at fair value with changes in fair value recognized in net
income. However, for an equity security not held for trading that does not have a readily determinable
fair value, ASC Topic 321 permits an institution to elect to measure the security 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. When this measurement
alternative is elected for an equity security without a readily determinable fair value not held for trading,
ASC Topic 321 requires the equity security to be written down to its fair value, with a charge to
earnings, if a qualitative assessment indicates the security is impaired and the fair value of the security
is less than its carrying value. For each equity security accounted for using this measurement
alternative, the qualitative assessment must be made each reporting period by qualitatively considering
impairment indicators to evaluate whether the security is impaired. Impairment indicators that an
institution should consider include, but are not limited to, the indicators identified in ASC Subtopic 321-10.
Except for equity investments accounted for under the equity method and those that result in
consolidation, equity securities with readily determinable fair values not held for trading should be
reported at fair value on the balance sheet in Schedule RC, item 2.c, and equity investments without
readily determinable fair values not held for trading should be reported at fair value or using the
measurement alternative described above in Schedule RC-F, item 4. In addition, insured state banks
that have received FDIC approval in accordance with Section 362.3(a) of the FDIC’s regulations to hold
certain equity investments (“grandfathered equity securities”) should report in Schedule RC-M, item 4,
the aggregate cost basis of all equity securities with readily determinable fair values not held for trading
that are reported in Schedule RC, item 2.c, not just the cost basis of those equity securities that are
treated as “grandfathered.”
The measurement guidance for investments in equity securities in ASC Topic 321 described above
also applies to investments in other ownership interests, such as interests in partnerships,
unincorporated joint ventures, and limited liability companies. However, the measurement guidance
does not apply to Federal Home Loan Bank stock or Federal Reserve Bank stock, which should be
reported in Schedule RC-F, item 4.
Other-Than-Temporary Impairment (ASC Topic 320) – For institutions that have adopted ASC
Topic 326, Financial Instruments–Credit Losses, this section is no longer applicable. Refer to the
“Impairment of Individual Available-for-Sale Debt Securities (ASC Topic 326)” and “Accounting for
Held-to-Maturity Debt Securities (ASC Topic 326)” sections below, as applicable.
Until an institution has adopted FASB Accounting Standards Update No. 2016-13 (ASU 2016-13),
which applies to held-to-maturity and available-for-sale debt securities, when the fair value of a debt
security (not held for trading) is less than its amortized cost basis, the security is impaired and the
impairment is either temporary or other than temporary. Under ASC Topic 320, institutions must
determine whether an impairment of an individual available-for-sale or held-to-maturity debt security is
other than temporary. To make this determination, institutions should apply applicable accounting
guidance including, but not limited to, ASC Topic 320 and ASC Subtopic 325-40, Investments–Other –
Beneficial Interests in Securitized Financial Assets.
Under ASC Topic 320, if an institution intends to sell a debt security, or it is more likely than not that it
will be required to sell the debt security before recovery of its amortized cost basis, an other-thantemporary impairment has occurred and the entire difference between the security’s amortized cost
basis and its fair value at the balance sheet date must be recognized in earnings. In these cases, the
fair value of the debt security would become its new amortized cost basis.
In addition, under ASC Topic 320, if the present value of cash flows expected to be collected on a debt
security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does
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Securities Activities (cont.):
not intend to sell the security and it is not more likely than not that the institution will be required to sell
the debt security before recovery of its amortized cost basis less any current-period credit loss, an
other-than-temporary impairment has occurred. The amount of the total other-than-temporary
impairment related to the credit loss must be recognized in earnings, but the amount of the total
impairment related to other factors must be recognized in other comprehensive income, net of
applicable taxes.
Until an institution has adopted ASU 2016-13, other-than-temporary impairment losses on held-tomaturity and available-for-sale debt securities that must be recognized in earnings should be included
in Schedule RI, items 6.a and 6.b, respectively. Other-than-temporary impairment losses that are to be
recognized in other comprehensive income, net of applicable taxes, should be reported in item 10 of
Schedule RI-A, Changes in Bank Equity Capital, and included on the balance sheet in Schedule RC,
item 26.b, “Accumulated other comprehensive income.” The amount of other-than-temporary
impairment losses on held-to-maturity and available-for-sale debt securities recognized in earnings
during the current calendar year-to-date reporting period should be reported in Schedule RI,
Memorandum item 14. For a held-to-maturity debt security on which the institution has recognized an
other-than-temporary impairment loss related to factors other than credit loss in other comprehensive
income, the institution should report the carrying value of the debt security in Schedule RC, item 2.a,
and in column A of Schedule RC-B, Securities. Under ASC Topic 320, this carrying value should be
the fair value of the held-to-maturity debt security as of the date of the most recently recognized otherthan-temporary impairment loss adjusted for subsequent accretion of the impairment loss related to
factors other than credit loss.
Impairment of Individual Available-for-Sale Debt Securities (ASC Topic 326) – This section of this
Glossary entry applies to institutions that have adopted ASC Topic 326. Institutions that have not
adopted ASC Topic 326 should continue to refer to the “Other-Than-Temporary Impairment (ASC
Topic 320)” section above. For additional information on the maintenance of appropriate allowances
for credit losses, institutions should refer to the Interagency Policy Statement on Allowances for Credit
Losses issued in May 2020.
Standards for the accounting for impairment of available-for-sale debt securities are set forth in
ASC Subtopic 326-30, Financial Instruments–Credit Losses–Available-for-Sale Debt Securities. Under
this subtopic, an available-for-sale debt security is impaired if its fair value is less than its amortized
cost basis. Thus, as of the end of each quarter, or more frequently if warranted, an institution must
determine whether a decline in fair value below the amortized cost basis of an individual available-forsale debt security has resulted from a credit loss or other factors. Credit losses are calculated
individually, rather than collectively, using a discounted cash flow method to compare the present value
of the cash flows expected to be collected with the amortized cost basis of the security. An ACL is
established, with a charge to the provision for credit losses, to reflect the credit loss component of the
decline in fair value below amortized cost. The ACL for an available-for-sale debt security is limited by
the amount that the fair value is less than the amortized cost basis, which is referred to as the fair value
floor. Noncredit impairment on an available-for-sale debt security that is not required to be recorded
through the ACL should be reported, net of applicable income taxes, in Schedule RI-A, item 10, “Other
comprehensive income.”
An institution must reassess the credit losses on an individual available-for-sale debt security each
quarter when there is an ACL on the security. The institution should record subsequent changes in the
ACL in the period of the change with a corresponding adjustment recorded through a provision for
credit losses included in Schedule RI, item 4. A previously recorded ACL on an available-for-sale debt
security should not be reversed to an amount below zero.
When evaluating impairment for available-for-sale debt securities, an institution may evaluate the
amortized cost basis including accrued interest receivable, or may evaluate the accrued interest
receivable separately from the remaining amortized cost basis. If evaluated separately, accrued
interest receivable is excluded from both the fair value of the available-for-sale debt security and its
amortized cost basis.
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Securities Activities (cont.):
If an institution intends to sell an available-for-sale debt security or will more likely than not be required
to sell the security before recovery of the amortized cost basis, the security’s ACL should be written off
and the amortized cost basis of the security should be charged down to its fair value at the reporting
date with any incremental impairment reported in Schedule RI, item 6.b, “Realized gains (losses) on
available for sale securities.” The previous amortized cost basis of the debt security, less the amount
of the charge-off, becomes the new amortized cost basis of the security. This new amortized cost
basis is not increased for subsequent recoveries in fair value; rather, a subsequent increase in fair
value after charge-off is included in other comprehensive income. The difference between the new
amortized cost basis and the cash flows expected to be collected should be accreted to interest income
according to applicable accounting standards.
An institution that has available-for-sale debt securities accounted for in accordance with ASC
Subtopic 325-40, Investments–Other–Beneficial Interests in Securitized Financial Assets, should refer
to that subtopic to account for changes in cash flows expected to be collected.
Accounting for Expected Credit Losses on Held-to-Maturity Debt Securities (ASC Topic 326) –
Institutions that have not adopted ASC Topic 326 should continue to refer to the “Other-ThanTemporary Impairment (ASC Topic 320)” section above.
Institutions that have adopted ASC Topic 326 should refer to the Glossary entry for “Allowance for
Credit Losses” for information on estimating the allowance for credit losses on held-to-maturity debt
securities. Such institutions should include provisions for credit losses on held-to-maturity debt
securities in Schedule RI, item 4.
Practices Considered Trading Activities – The proper categorization of securities is important to ensure
that trading gains and losses are promptly recognized in earnings and regulatory capital. This will not
occur when debt securities intended to be held for trading purposes are categorized as held-to-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-to-maturity debt securities do not directly affect regulatory
capital and 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 purchase of a "when-issued" security acquires the risks and rewards of
owning a security and may sell the when-issued security at a profit before having to take delivery
and pay for it. Because such transactions are intended to generate profits from short-term price
movements, they should be categorized as trading.
(3) Pair-offs – Pair-offs are security purchase transactions that are closed-out or sold at, or prior to,
settlement date. In a pair-off, an institution commits to purchase a security. Then, prior to the
predetermined settlement date, the institution will pair-off the purchase with a sale of the same
security. Pair-offs are settled net when one party to the transaction remits the difference between
the purchase and the 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.
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Securities Activities (cont.):
(4) Extended Settlements – In the U.S., regular-way settlement for federal government and federal
agency securities (except mortgage-backed securities and derivative contracts) is one business
day after the trade date. Regular-way settlement for corporate and municipal securities is three
business days after the trade date. For mortgage-backed securities, it can be up to 60 days or
more after the trade date. The use of extended settlements may be offered by securities dealers
in order to facilitate speculation on the part of the purchaser, often in connection with pair-off
transactions. Securities acquired through the use of a settlement period in excess of the 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 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.")
Prohibited Practice – 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–Statements or Entries Generally and
1005–Bank Entries, Reports and Transactions.
See also the Glossary entries for “Accrued Interest Receivable,” “Allowance for Credit Losses,”
“Purchased Credit-Deteriorated Assets,” and “Trading Account.”
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, because the securities borrowing/lending 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 a transaction
does not qualify as a sale, the securities lender (the transferor) and the securities borrower (the
transferee) should account for the transaction as a secured borrowing 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" by the securities
lender are considered pledged as collateral against the amount borrowed. The securities lender
should recognize the cash or securities received as “collateral” as an asset on its balance sheet with a
corresponding liability for the obligation to return the “collateral” received. The securities lender should
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Securities Borrowing/Lending Transactions (cont.):
continue to report the “loaned” securities on its balance sheet in the same asset category as before the
transfer, e.g., as available-for-sale securities, held-to-maturity securities, or trading assets, as
appropriate. "Loaned" securities that the securities lender reports as available-for-sale or held-tomaturity securities in Schedule RC-B, Securities, should also be reported as "Pledged securities" in
Memorandum item 1 of that schedule.
When a securities borrowing/lending transaction does not qualify as a sale, the securities borrower
should not recognize at inception the “loaned” securities transferred to it as assets on its balance
sheet. Rather, at the inception of a transaction in which the securities borrower pledges cash
collateral, the securities borrower should derecognize the cash pledged to the securities lender and
recognize a corresponding receivable for the borrower’s claim on the cash that the securities lender is
obligated to return in the future. If the securities borrower pledges securities as collateral to the
securities lender, the securities borrower should record no balance sheet entry for the pledged
securities at inception, but it should report these securities as pledged securities in the Call Report in
the same manner as discussed above for a securities lender. If the securities lender later defaults
under the terms of the securities borrowing/lending agreement and is no longer entitled to redeem the
“loaned” securities, the securities lender should remove these securities from its balance sheet.
Additionally, the securities borrower should now recognize the “loaned” securities as assets on its
balance sheet (and report these securities, e.g., as available-for-sale securities, held-to-maturity
securities, or trading assets, as appropriate, if debt securities had been loaned) and initially measure
them at fair value.
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 its balance sheet, record the proceeds from
the sale of the securities (including the forward repurchase commitment), and recognize any gain or
loss on the transaction. The borrower of the securities should record the securities on its balance
sheet 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 860-50, Transfers and Servicing – Servicing Assets and
Liabilities, and ASC Topic 948, Financial Services-Mortgage Banking. 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 for accounting
purposes only in certain circumstances as discussed below. Servicing assets result from contracts to
service financial assets under which the benefits of servicing (estimated future 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 under which the benefits of servicing are not expected to
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Servicing Assets and Liabilities (cont.):
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.
A bank must recognize and initially measure at fair value a servicing asset or a servicing liability each
time it undertakes an obligation to service a financial asset by entering into a servicing contract in
either of the following situations:
(1) The bank’s transfer of an entire financial asset, a group of entire financial assets, or a participating
interest in an entire financial asset that meets the requirements for sale accounting; or
(2) An acquisition or assumption of a servicing obligation that does not relate to financial assets of the
bank or its consolidated affiliates included in the Consolidated Reports of Condition and Income
being presented.
If a bank sells a participating interest in an entire financial asset, it only recognizes a servicing asset or
servicing liability related to the participating interest sold.
A bank that transfers its financial assets to an unconsolidated entity in a transfer that qualifies as a sale
in which the bank obtains the resulting securities and classifies them as debt securities held-to-maturity
in accordance with ASC Topic 320, Investments–Debt Securities, may either separately recognize its
servicing assets or servicing liabilities or report those servicing assets or servicing liabilities together
with the assets being serviced.
A bank should account for its servicing contract that qualifies for separate recognition as a servicing
asset or servicing liability initially measured at fair value regardless of whether explicit consideration
was exchanged. A bank that transfers or securitizes financial assets in a transaction that does not
meet the requirements for sale accounting under ASC Topic 860 and is accounted for as a secured
borrowing with the underlying assets remaining on the bank’s balance sheet must not recognize a
servicing asset or a servicing liability.
After initially measuring a servicing asset or servicing liability at fair value, a bank should subsequently
measure each class of servicing assets and servicing liabilities using either the amortization method or
the fair value measurement method. The election of the subsequent measurement method should be
made separately for each class of servicing assets and servicing liabilities. A bank must apply the
same subsequent measurement method to each servicing asset and servicing liability in a class. Each
bank should identify its classes of servicing assets and servicing liabilities based on (a) the availability
of market inputs used in determining the fair value of servicing assets and servicing liabilities, (b) the
bank’s method for managing the risks of its servicing assets or servicing liabilities, or (c) both. Different
elections can be made for different classes of servicing. For a class of servicing assets and servicing
liabilities that is subsequently measured using the amortization method, a bank may change the
subsequent measurement method for that class of servicing by making an irrevocable decision to elect
the fair value measurement method for that class at the beginning of any fiscal year. Once a bank
elects the fair value measurement method for a class of servicing, that election must not be reversed.
Under the amortization method, all servicing assets or servicing liabilities in the class should be
amortized in proportion to, and over the period of, estimated net servicing income for assets (servicing
revenues in excess of servicing costs) or net servicing loss for liabilities (servicing costs in excess of
servicing revenues). The servicing assets or servicing liabilities should be assessed for impairment or
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Servicing Assets and Liabilities (cont.):
increased obligation based on fair value at each quarter-end report date. The servicing assets within a
class should be stratified into groups based on one or more of the predominant risk characteristics of
the underlying financial assets. If the carrying amount of a stratum of servicing assets exceeds its fair
value, the bank should separately recognize impairment for that stratum by reducing the carrying
amount to fair value through a valuation allowance for that stratum. The valuation allowance should be
adjusted to reflect changes in the measurement of impairment subsequent to the initial measurement
of impairment. For the servicing liabilities within a class, if subsequent events have increased the fair
value of the liability above the carrying amount of the servicing liabilities, the bank should recognize the
increased obligation as a loss in current earnings.
Under the fair value measurement method, all servicing assets or servicing liabilities in a class should
be measured at fair value at each quarter-end report date. Changes in the fair value of these servicing
assets and servicing liabilities should be reported in earnings in the period in which the changes occur.
For purposes of these reports, servicing assets resulting from contracts to service loans secured by
real estate (as defined for Schedule RC-C, Part I, item 1, in the Glossary entry for "Loans secured
by real estate") should be reported in Schedule RC-M, item 2.a, "Mortgage servicing assets."
Servicing assets resulting from contracts to service all other financial assets should be reported in
Schedule RC-M, item 2.c, "All other intangible assets." When reporting the carrying amount of
mortgage servicing assets in Schedule RC-M, item 2.a, and nonmortgage servicing assets in
Schedule RC-M, item 2.c, banks should include all classes of servicing accounted for under the
amortization method as well as all classes of servicing accounted for under the fair value measurement
method. The fair value of all recognized mortgage servicing assets should be reported in
Schedule RC-M, item 2.a.(1), regardless of the subsequent measurement method applied to these
assets. The amount of mortgage servicing assets reported in Schedule RC-M, item 2.a, should be
used when determining the amount of such assets, net of associated deferred tax liabilities, that
exceeds the common equity tier 1 capital deduction thresholds in Schedule RC-R, Part I. Servicing
liabilities should be reported in Schedule RC-G, item 4, “All other liabilities.” In the Call Reports for
June and December, if the amount of servicing liabilities is greater than $100,000 and exceeds
25 percent of “All other liabilities,” this amount should be itemized and described in Schedule RC-G,
item 4.f, 4.g, or 4.h, as appropriate.
Servicing assets and servicing liabilities may not be netted on the balance sheet (Schedule RC), but
must be reported gross as assets and liabilities, respectively.
Changes in the fair value of any class of servicing assets and servicing liabilities accounted for under
the fair value measurement method should be included in earnings in Schedule RI, item 5.f, “Net
servicing fees.” In addition, an institution must report in Schedule SU, item 6, whether it services any
closed-end 1-4 family residential mortgage loans or more than $10 million of other financial assets. If
so, the institutions must report information about the serviced assets in Schedule SU, item 6.a.
Settlement Date Accounting: See "trade date and settlement date accounting."
Shell Branches: Shell branches are limited service branches that do not conduct transactions with
residents, other than with other shell branches, in the country in which they are located. Transactions
at shell branches are usually initiated and effected by their head office or by other related branches
outside the country in which the shell branches are located, with records and supporting documents
maintained at the initiating offices. Examples of such locations are the Bahamas and the Cayman
Islands.
Short Position: When a bank sells an asset that it does not own, it has established a short position.
If on the report date a bank is in a short position, it shall report its liability to purchase the asset in
Schedule RC, item 15, "Trading liabilities." In this situation, the right to receive payment shall be
reported in Schedule RC-F, item 6, "All other assets.” Short positions shall be reported gross. Short
trading positions shall be revalued consistent with the method used by the reporting bank for the
valuation of its trading assets.
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Significant Subsidiary: See "subsidiaries."
Standby Letter of Credit: See "letter of credit."
Start-Up Activities: Guidance on the accounting and reporting for the costs of start-up activities,
including organization costs, is set forth in ASC Subtopic 720-15, Other Expenses – Start-Up Costs
(formerly AICPA Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"). A
summary of this accounting guidance follows. For further information, see ASC Subtopic 720-15.
Start-up activities are defined broadly as those one-time activities related to opening a new facility,
introducing a new product or service, conducting business in a new territory, conducting business with
a new class of customer, or commencing some new operation. Start-up activities include activities
related to organizing a new entity, such as a new bank, the costs of which are commonly referred to as
organization costs.1
Costs of start-up activities, including organization costs, should be expensed as incurred. Costs of
acquiring or constructing premises and fixed assets and getting them ready for their intended use are
not start-up costs, but the costs of using such assets that are allocated to start-up activities
(e.g., depreciation of computers) are considered start-up costs.
For a new bank, pre-opening expenses such as salaries and employee benefits, rent, depreciation,
supplies, directors' fees, training, travel, postage, and telephone are considered start-up costs.
Pre-opening income earned and expenses incurred from the bank's inception until the date the bank
commences operations should be reported in the Consolidated Report of Income using one of the two
following methods, consistent with the manner in which the bank reports pre-opening income and
expenses for other financial reporting purposes:
(1) Pre-opening income and expenses for the entire period from the bank's inception until the date the
bank commences operations should be reported in the appropriate items of Schedule RI, Income
Statement, each quarter during the calendar year in which operations commence; or
(2) Pre-opening income and expenses for the period from the bank's inception until the beginning of
the calendar year in which the bank commences operations should be included, along with the
bank's opening (original) equity capital, in Schedule RI-A, item 5, "Sale, conversion, acquisition, or
retirement of capital stock, net." The net amount of these pre-opening income and expenses
should be identified and described in Schedule RI-E, item 7. Pre-opening income earned and
expenses incurred during the calendar year in which the bank commences operations should be
reported in the appropriate items of Schedule RI, Income Statement, each quarter during the
calendar year in which operations commence.
The organization costs of forming a holding company and the costs of other holding company start-up
activities are sometimes paid by the bank that will be owned by the holding company. Because these
are the holding company’s costs, whether or not the holding company formation is successful, they
should not be reported as expenses of the bank. Accordingly, any unreimbursed costs paid by the
bank on behalf of the holding company should be reported as a cash dividend to the holding company
in Schedule RI-A, item 9. In addition, if a new bank and holding company are being formed at the
same time, the costs of the bank’s start-up activities, including its organization costs, should be
reported as start-up costs for the bank. If the holding company pays these costs for the bank but is not
reimbursed by the bank, the bank should treat the holding company’s forgiveness of payment as a
capital contribution, which should be reported in Schedule RI-A, item 11, “Other transactions with
stockholders (including a parent holding company),” and in Schedule RI-E, item 5.
1
Organization costs for a bank are the direct costs incurred to incorporate and charter the bank. Such costs include,
but are not limited to, professional (e.g., legal, accounting, and consulting) fees and printing costs directly related to
the chartering or incorporation process, filing fees paid to chartering authorities, and the cost of economic impact
studies.
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Subordinated Notes and Debentures: A subordinated note or debenture is a form of debt issued by a
bank or a consolidated subsidiary. When issued by a bank, a subordinated note or debenture is not
insured by a federal agency, is subordinated to the claims of depositors, and has an original weighted
average maturity of five years or more. Such debt shall be issued by a bank with the approval of, or
under the rules and regulations of, the appropriate federal bank supervisory agency and is to be
reported in Schedule RC, item 19, "Subordinated notes and debentures."
When issued by a subsidiary, a note or debenture may or may not be explicitly subordinated to the
deposits of the parent bank and is to be reported in Schedule RC, item 16, "Other borrowed money," or
item 19, "Subordinated notes and debentures," as appropriate.
Those subordinated notes and debentures that are to be reported in Schedule RC, item 19, include
mandatory convertible debt.
Subsidiaries: The treatment of subsidiaries in the Consolidated Reports of Condition and Income
depends upon the degree of ownership held by the reporting bank.
A majority-owned subsidiary of the reporting bank is a subsidiary in which the parent bank directly or
indirectly owns more than 50 percent of the outstanding voting stock.
A significant subsidiary of the reporting bank is a majority-owned subsidiary that meets any one or
more of the following tests:
(1) The bank's direct and indirect investment in and advances to the subsidiary equals five percent or
more of the total equity capital of the parent bank.
NOTE: For the purposes of this test, the amount of direct and indirect investments and advances
is either (a) the amount carried on the books of the parent bank or (b) the parent's proportionate
share in the total equity capital of the subsidiary, whichever is greater.
(2) The parent bank's proportional share (based on equity ownership) of the subsidiary's gross
operating income or revenue amounts to five percent or more of the gross operating income or
revenue of the consolidated parent bank.
(3) The subsidiary's income or loss before income taxes amounts to five percent or more of the parent
bank's income or loss before income taxes.
(4) The subsidiary is, in turn, the parent of one or more subsidiaries which, when consolidated with the
subsidiary, constitute a significant subsidiary as defined in one or more of the above tests.
An associated company is a corporation in which the bank, directly or indirectly, owns 20 to 50 percent
of the outstanding voting stock and over which the bank exercises significant influence. This 20 to 50
percent ownership is presumed to carry "significant" influence unless the bank can demonstrate the
contrary to the satisfaction of the appropriate federal supervisory authority.
A corporate joint venture is a corporation owned and operated by a group of banks or other businesses
("joint venturers"), no one of which has a majority interest, as a separate and specific business or
project for the mutual benefit of the joint venturers. Each joint venturer may participate, directly or
indirectly, in the management of the joint venture. An entity that is a majority-owned subsidiary of one
of the joint venturers is not a corporate joint venture.
The equity ownership in majority-owned subsidiaries that are not consolidated on the Reports of
Condition and Income (in accordance with the guidance in the General Instructions on the Scope of the
"Consolidated Bank" Required to be Reported in the Submitted Reports) and in associated companies
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Subsidiaries (cont.):
is accounted for using the equity method of accounting and is reported in Schedule RC, item 8,
"Investments in unconsolidated subsidiaries and associated companies," or item 9, “Direct and indirect
investments in real estate ventures,” as appropriate.
Ownership in a corporate joint venture is to be treated in the same manner as an associated company
(defined above) only to the extent that the equity share represents significant influence over
management. Otherwise, equity holdings in a joint venture are treated as holdings of corporate stock
and income is recognized only when distributed in the form of dividends.
See also “equity method of accounting.”
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." Rather, the
items included in these accounts should be reviewed and material amounts should be reported in the
appropriate accounts of the Consolidated Reports of Condition and Income.
Syndications: A syndication is a participation, usually involving shares in a single loan, in which several
participants agree to enter into an extension of credit under a bona fide binding agreement that
provides that, regardless of any event, each participant shall fund and be at risk only up to a specified
percentage of the total extension of credit or up to a specified dollar amount. In a syndication, the
participants agree to the terms of the participation prior to the execution of the final agreement and the
contract is executed by the obligor and by all the participants, although there is usually a lead institution
organizing or managing the credit. Large commercial and industrial loans, large loans to finance
companies, and large foreign loans may be handled through such syndicated participations.
Each participant in the syndicate, including the lead bank, records its own share of the participated loan
and the total amount of the loan is not entered on the books of one bank to be shared through transfers
of loans. Thus, the initial operation and distribution of this type of participation does not require a
determination as to whether a transfer that should be accounted for as a sale has occurred. However,
any subsequent transfers of shares, or parts of shares, in the syndicated loan would be subject to the
provisions of 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),
governing whether these transfers should be accounted for as a sale or a secured borrowing. (See the
Glossary entry for "transfers of financial assets.")
Telephone Transfer Account: See "deposits."
Term Federal Funds: See "federal funds transactions."
Time Deposits: See "deposits."
Trade Date and Settlement Date Accounting: For purposes of the Consolidated Reports of Condition
and Income, the preferred method for reporting transactions in held-to-maturity securities, available-forsale securities, and trading assets (including money market instruments) other than derivative
contracts (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 bank elects should be used consistently, unless the bank has elected settlement date accounting and
subsequently decides to change to the preferred trade date method.
Under trade date accounting, assets purchased shall be recorded in the appropriate asset category on
the trade date and the bank's obligation to pay for those assets shall be reported in Schedule RC-G,
item 4, "All other liabilities." Conversely, when an asset is sold, it shall be removed on the trade date
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Trade Date and Settlement Date Accounting (cont.):
from the asset category in which it was recorded, and the proceeds receivable resulting from the sale
shall be reported in Schedule RC-F, item 6, "All other assets." 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 "All other liabilities" or "All other assets"
entry resulting from the initial recording of 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 bank, on the trade date,
would make no entries. On settlement date, the selling bank would reduce the appropriate asset
category and reflect the receipt of the payment. Any gain or loss resulting from such transaction would
be recognized on the settlement date.
Trading Account: Trading activities typically include (a) regularly underwriting or dealing in securities;
interest rate, foreign exchange rate, commodity, equity, and credit derivative contracts; other financial
instruments; and other assets for resale, (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 in order to profit from shortterm price movements, and (c) acquiring or taking positions in such items as accommodations
to customers, provided that acquiring or taking such positions meets the definition of “trading” in
ASC Topic 320, Investments–Debt Securities, and ASC Topic 815, Derivatives and Hedging, and the
definition of “trading purposes” in ASC Topic 815.
For purposes of the Consolidated Reports of Condition and Income, all debt securities within the scope
of ASC Topic 320, Investments-Debt Securities, that a bank has elected to report at fair value under a
fair value option with changes in fair value reported in current earnings should be classified as trading
securities. In addition, for purposes of these reports, banks may classify assets (other than debt
securities within the scope of ASC Topic 320 for which a fair value option is elected) and liabilities as
trading if the bank applies fair value accounting, with changes in fair value reported in current earnings,
and manages these assets and liabilities as trading positions, subject to the controls and applicable
regulatory guidance related to trading activities. For example, a bank would generally not classify a
loan to which it has applied the fair value option as a trading asset unless the bank holds the loan,
which it manages as a trading position, for one of the following purposes: (1) for market making
activities, including such activities as accumulating loans for sale or securitization; (2) to benefit from
actual or expected price movements; or (3) to lock in arbitrage profits.
All trading assets should be segregated from a bank's other assets and reported in Schedule RC,
item 5, "Trading assets."
A bank's failure to establish a separate account for assets that are used for trading purposes does not
prevent such assets from being designated as trading for purposes of these reports. For further
information, see ASC Topic 320.
All trading account assets should be reported at their fair value as defined by ASC Topic 820, Fair
Value Measurement, with unrealized gains and losses recognized in current income. When a security
or other asset is acquired, a bank 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 bank 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 bank categorizes a newly acquired asset, management
should document its decision.
All trading liabilities should be segregated from other transactions and reported in Schedule RC,
item 15, "Trading liabilities." The trading liability account includes the fair value of derivative contracts
held for trading that are in loss positions and short positions arising from sales of securities and other
assets that the bank does not own. (See the Glossary entry for "short position.") Trading account
liabilities should be reported at fair value as defined by ASC Topic 820 with unrealized gains and
losses recognized in current income in a manner similar to trading account assets.
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Trading Account (cont.):
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 bank 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.
Transaction Account: See "deposits."
Transactions Between Entities under Common Control: See “business combinations.”
Transfers of Financial Assets: The accounting and reporting standards for transfers of financial assets
are set forth in ASC Topic 860, Transfers and Servicing. Banks must follow ASC Topic 860 for purposes
of these reports. 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 bank a contractual right either to receive cash or another financial instrument from another entity
or to exchange other financial instruments on potentially favorable terms with another entity. Most of
the assets on a bank'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.1 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 a bank has surrendered control over transferred financial assets, the bank must
first consider whether the entity to which the financial assets were transferred would be required to be
consolidated by the bank. If it is determined that consolidation would be required by the bank, then the
transferred financial assets would not be treated as having been sold in the bank’s Consolidated
Reports of Condition and Income even if all of the other provisions listed below are met.2
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
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.
2
The requirements in ASC Subtopic 810-10, Consolidation – Overall, should be applied to determine when a
variable interest entity should be consolidated. For further information, refer to the Glossary entry for “variable
interest entity.”
FFIEC 051
A-98
(6-20)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
(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 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 interest 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 Sale1 – 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:
(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.
1
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.
FFIEC 051
A-99
(3-17)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
If, as a result of a change in circumstances, a bank 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 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 RC-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 Schedule RC-M, item 5.b, “Other borrowings.” 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 a bank
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 bank is deemed to have regained effective control over these loans. The delinquent loans
must be brought back onto the bank's books and recorded as loans, regardless of whether the bank
intends to exercise the buy-back option.
Banks 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 provide guidance on the accounting for most assets and liabilities
recorded on the balance sheet following a transfer accounted for as a sale. As a result, after their
initial measurement or carrying amount allocation, these assets and liabilities should be accounted for
in accordance with the existing generally accepted accounting principles applicable to them.
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, first-out” (LIFO) participations in which all principal cash
flows collected on the loan are paid first to the party acquiring the participation do not meet
FFIEC 051
A-100
(3-17)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
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 a bank with a calendar year fiscal year) will qualify for sale accounting and
instead must be reported as secured borrowings.
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, for a
transfer of the guaranteed portion of an SBA loan at a premium that settled before February 15, 2011,
the "seller" was obligated by the SBA to refund the premium to the “purchaser” if the loan was repaid
within 90 days of the transfer. This premium refund obligation was a form of recourse, which meant
that the transferred guaranteed portion of the loan did not meet the definition of a "participating
interest" for the 90-day period that the premium refund obligation existed. As a result, the transfer was
required to 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
then met the definition of a "participating interest," the transfer of the guaranteed portion could be
accounted for as a sale if all of the conditions for sale accounting were met. In contrast, for transfers of
guaranteed portions of SBA loans at a premium that settled on or after February 15, 2011, the SBA has
eliminated the premium refund requirement. With the elimination of the premium refund obligation from
such transfers, the transferred guaranteed portion and the retained unguaranteed portion of the SBA
loan should normally meet the definition of a “participating interest” on the transfer date. Assuming the
definition of “participating interest” is met and all of the conditions for sale accounting are met, the
transfer of the guaranteed portion of an SBA loan at a premium on or after February 15, 2011, would
qualify as a sale on the transfer date. The conditions for sale accounting are described above under
“Determining Whether a Transfer Should be Accounted for as a Sale or a Secured Borrowing” in this
Glossary entry.
On the other hand, 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.
FFIEC 051
A-101
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
(4) Recognize in earnings any gain or loss on the sale.
(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 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.
When an originating FDIC-insured lender transfers a loan participation with recourse, 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" 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 Schedule RC-M, item 5.b, “Other
borrowings.”
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 under ASC Topic 860,
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 Consolidated Report of Condition balance sheet (Schedule RC), normally in item 4.b,
FFIEC 051
A-102
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
“Loans and leases held for investment,” and in the appropriate loan category in Schedule RC-C, Part I,
Loans and Leases. The originating lender should report the transferred loan participation as a secured
borrowing on the Call Report balance sheet in Schedule RC, item 16, “Other borrowed money,” and in
the appropriate subitem or subitems in Schedule RC-M, item 5.b, “Other borrowings;” in
Schedule RC-M, item 10.b, “Amount of ‘Other borrowings’ that are secured;” and in Schedule RC-C,
Part I, Memorandum item 14, “Pledged loans and leases.” As a consequence, 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 for loan and lease losses (or allowance for credit
losses, if the institution has adopted ASC Topic 326, Financial Instruments–Credit Losses).
A bank 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 4.b, “Loans and leases held for investment,” on the
Consolidated Report of Condition balance sheet (Schedule RC) and in the loan category appropriate to
the underlying 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 RC-C, Part I, Loans and Leases. Furthermore, for risk-based capital
purposes, the acquiring bank should assign the loan participation or participating interest to the riskweight category appropriate to the underlying borrower or, if relevant, the guarantor or the nature of the
collateral.
“Purchased” Loans Originated By Others – Some institutions have entered into various residential
mortgage loan purchase programs. These programs often function like traditional warehouse lines of
credit; however, in some cases, the mortgage loan transfers are legally structured as purchases by the
institution rather than as pledges of collateral to secure the funding. Under these programs, an
institution provides funding to a mortgage loan originator while simultaneously obtaining an interest in
the mortgage loans subject to a takeout commitment. A takeout commitment is a written commitment
from an approved investor (generally, an unrelated third party) to purchase one or more mortgage
loans from the originator.
Although the facts and circumstances of each program must be carefully evaluated to determine the
appropriate accounting, an institution should generally account for a mortgage purchase program with
continuing involvement by the originator, including takeout commitments, as a secured borrowing with
pledge of collateral, i.e., a loan to the originator secured by the residential mortgage loans, rather than
a purchase of mortgage loans.
When loans obtained in a mortgage purchase program do not qualify for sale accounting, the financing
provided to the originator (if not held for trading purposes) should be reported in Schedule RC-C, Part I,
item 9.a, “Loans to nondepository financial institutions,” and on the balance sheet in Schedule RC,
item 4.a, “Loans and leases held for sale,” or item 4.b, “Loans and leases, net of unearned income,”
as appropriate. For risk-based capital purposes, a loan to a mortgage loan originator secured by
residential mortgages that is reported in Schedule RC-C, Part I, item 9.a, should be assigned a
100 percent risk weight, or if relevant, the risk weight category appropriate to the exposure as
discussed in the regulatory capital rules, and included in the appropriate column of Schedule RC-R,
Part II, item 4.d or 5.d, based on its balance sheet classification.
In situations where the transaction between the mortgage loan originator and the transferee (acquiring)
institution is accounted for as a secured borrowing with pledge of collateral, the transferee (acquiring)
institution’s designation of the financing provided to the originator as held for sale is appropriate only
when the conditions in ASC Subtopic 310-10, Receivables – Overall (formerly AICPA Statement of
Position 01-6, "Accounting by Certain Entities (Including Entities With Trade Receivables) That Lend to
or Finance the Activities of Others") and the 2001 Interagency Guidance on Certain Loans Held for
Sale have been met. In these situations, the mortgage loan originator’s planned sale of the pledged
collateral (i.e., the individual residential mortgage loans) to a takeout investor is not relevant to the
FFIEC 051
A-103
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Transfers of Financial Assets (cont.):
transferee institution’s designation of the loan to the originator as held for investment or held for sale.
In situations where the transferee institution simultaneously extends a loan to the originator and
transfers an interest (for example, a participation interest) in the loan to the originator to another party,
the transfer to the other party also should be evaluated to determine whether the conditions in ASC
Topic 860 for sale accounting treatment have been met. If this transfer qualifies to be accounted for as
a sale, the portion of the loan to the originator that is retained by the transferee institution should be
classified as held for investment when the transferee has the intent and ability to hold that portion for
the foreseeable future or until maturity or payoff (which is generally in the near term).
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.
Traveler's Letter of Credit: See "letter of credit."
Treasury Receipts: See "coupon stripping, Treasury receipts, and STRIPS."
Treasury Stock: Treasury stock is stock that the bank has issued and subsequently acquired, but that
has not been retired or resold. As a general rule, treasury stock, whether carried at cost or at
par value, is a deduction from a bank's total equity capital. For purposes of the Consolidated Reports
of Condition and Income, the carrying value of treasury stock should be reported (as a negative
number) in Schedule RC, item 26.c, "Other equity capital components."
"Gains" and "losses" on the sale, retirement, or other disposal of treasury stock are not to be reported
in Schedule RI, Income Statement, but should be reflected in Schedule RI-A, item 6, "Treasury stock
transactions, net." Such gains and losses, as well as the excess of the cost over the par value of
treasury stock carried at par, are generally to be treated as adjustments to Schedule RC, item 25,
"Surplus."
For further information, see ASC Subtopic 505-30, Equity – Treasury Stock (formerly Accounting
Research Bulletin No. 43, Chapter 1, Section B, as amended by APB Opinion No. 6, “Status of
Accounting Research Bulletins”).
Troubled Debt Restructurings: The accounting standards for troubled debt restructurings are set forth
in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly FASB
Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings," as
amended by FASB Statement No. 114, "Accounting by Creditors for Impairment of a Loan”) and, for
institutions that have adopted ASC Topic 326, Financial Instruments–Credit Losses, in ASC Topic 326.
Institutions should refer to the Glossary entries for “allowance for loan and lease losses” and
“allowance for credit losses,” as applicable, when considering measurement of the allowance for loan
losses or allowance for credit losses (allowance, when used interchangeably) for TDRs.
A troubled debt restructuring (TDR) is a restructuring in which an institution, for economic or legal
reasons related to a borrower's financial difficulties, grants a concession to the borrower that it would
not otherwise consider. The restructuring of a loan or other debt instrument (hereafter referred to
collectively as a "loan") may include, but is not necessarily limited to: (1) the transfer from the borrower
to the institution of real estate, receivables from third parties, other assets, or an equity interest in the
borrower in full or partial satisfaction of the loan (see the Glossary entry for "foreclosed assets" for
further information), (2) a modification of the loan terms, such as a reduction of the stated interest rate,
FFIEC 051
A-104
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Troubled Debt Restructurings (cont.):
principal, or accrued interest or an extension of the maturity date at a stated interest rate lower than the
current market rate for new debt with similar risk, or (3) a combination of the above. A loan extended
or renewed at a stated interest rate equal to the current interest rate for new debt with similar risk is not
to be reported as a TDR. Modifications of loans should be evaluated to determine if a TDR exists in
totality. In some instances a borrower may have been able to add additional collateral or a guarantor
to a loan which fully compensates for a concession made by the institution.
See the Glossary entry for “nonaccrual status” for a discussion of the conditions under which a
nonaccrual asset which has undergone a TDR (including those that involve a multiple note structure)
may be returned to accrual status.
A TDR in which an institution receives physical possession of the borrower's assets should be
accounted for in accordance with ASC Subtopic 310-40. Thus, in such situations, the loan should be
treated as if assets have been received in satisfaction of the loan and reported as described in the
Glossary entry for "foreclosed assets."
A TDR may include both a modification of terms and the acceptance of property in partial satisfaction
of the loan. The accounting for such a restructuring is a two-step process: (i) the recorded amount
(or amortized cost basis if the institution has adopted ASC Topic 326) of the loan is reduced by the fair
value (less cost to sell, if appropriate) of the property received, and (ii) the institution should measure
any impairment (or expected credit losses if the institution has adopted ASC Topic 326) on the
remaining recorded balance, or amortized cost basis, as applicable, of the restructured loan in
accordance with ASC Topic 310 (or ASC Subtopic 326-20 if the institution has adopted ASC
Topic 326) and record any related allowance.
A TDR may involve the substitution or addition of a new debtor for the original borrower. The treatment
of these situations depends upon their substance. Restructurings in which the substitute or additional
debtor controls, is controlled by, or is under common control with the original borrower, or performs the
custodial function of collecting certain of the original borrower's funds, should be accounted for as
modifications of terms. Restructurings in which the substitute or additional debtor does not have a
control or custodial relationship with the original borrower should be accounted for as a receipt of a
"new" loan in full or partial satisfaction of the original borrower's loan. The "new" loan should be
recorded at its fair value.
A credit analysis should be performed for a TDR in conjunction with its restructuring to determine its
collectibility and estimated allowance. When available information confirms that a specific TDR, or a
portion thereof, is uncollectible, the uncollectible amount should be charged off against the allowance
at the time of the restructuring. As is the case for all loans, the credit quality of restructured loans
should be regularly reviewed. The institution should periodically evaluate the collectibility of the TDR
so as to determine whether any additional amounts should be charged to the allowance, or, if the
restructuring involved a financial asset other than a loan, to another appropriate account.
Once an obligation has been restructured in a TDR, it continues to be considered a TDR until paid in
full or otherwise settled, sold, or charged off (or meets the conditions discussed below under
“Accounting for a Subsequent Restructuring of a Troubled Debt Restructuring”). The loan must be
reported in the appropriate loan category in Schedule RC-C, Part I, items 1 through 9, and in the
appropriate loan category in:
•
•
Schedule RC-C, Part I, Memorandum item 1, if it is in compliance with its modified terms, or
Schedule RC-N, items 1 through 7, and Memorandum item 1, if it is not in compliance with its
modified terms.
However, for a loan that is a TDR for which the concession did not include a reduction of principal, if
the restructuring agreement specifies a contractual interest rate that is a market interest rate at the time
FFIEC 051
A-105
(3-20)
GLOSSARY
FFIEC 051
GLOSSARY
Troubled Debt Restructurings (cont.):
of the restructuring and the loan is in compliance with its modified terms, the loan need not continue to
be reported as a TDR in Schedule RC-C, Part I, Memorandum item 1, in calendar years after the year
in which the restructuring took place. A market interest rate is a contractual interest rate that at the
time of the restructuring is greater than or equal to the rate that the institution was willing to accept for a
new loan with comparable risk. To be considered in compliance with its modified terms, a loan that is a
TDR must be in accrual status and must be current or less than 30 days past due on its contractual
principal and interest payments under the modified repayment terms.
Accounting for a Subsequent Restructuring of a TDR – When a loan has previously been modified in a
TDR, the lending institution and the borrower may subsequently enter into another restructuring
agreement. The facts and circumstances of each subsequent restructuring of a TDR loan should be
carefully evaluated to determine the appropriate reporting by the institution under U.S. GAAP. Under
certain circumstances it may be acceptable not to report a subsequently restructured loan as a TDR.
The banking agencies will not object to an institution no longer reporting such a loan as a TDR if at the
time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under
the terms of the subsequent restructuring agreement, no concession has been granted by the
institution to the borrower. To meet these conditions for removing the TDR designation, the
subsequent restructuring agreement must specify market terms, including a contractual interest rate
not less than a market interest rate for new debt with similar credit risk characteristics and other terms
no less favorable to the institution than those it would offer for such new debt. When determining
whether the borrower is experiencing financial difficulties, the institution's assessment of the borrower's
financial condition and prospects for repayment after the restructuring should be supported by a
current, well-documented credit evaluation performed at the time of the restructuring. When assessing
whether a concession has been granted by the institution, the agencies consider any principal
forgiveness on a cumulative basis to be a continuing concession. Accordingly, a TDR loan with any
principal forgiveness would retain the TDR designation after subsequent restructurings.
If at the time of the subsequent restructuring the institution appropriately demonstrates that a loan
meets the conditions discussed above, the loan need no longer be disclosed as a TDR in the
Call Report.
The recorded investment or amortized cost basis, as applicable, should not change at the time of the
subsequent restructuring (unless cash is advanced or received). When there have been charge-offs
prior to the subsequent restructuring, consistent with Call Report instructions, any expected recoveries
of amounts previously charged off are not added to the recorded investment in, or the amortized cost
basis of, the TDR, as applicable. For institutions that have not adopted ASC Topic 326, no recoveries
should be recognized until collections on amounts previously charged off have been received. For
institutions that have adopted ASC Topic 326, expected recoveries of amounts previously charged off
should be considered as part of the allowance estimate but are not included in the amortized cost basis
of the TDR. Similarly, if interest payments were applied to the recorded investment in, or amortized
cost basis of, the TDR, as applicable, prior to the subsequent restructuring, the application of these
payments to the recorded investment or amortized cost basis, as applicable, should not be reversed
nor reported as interest income at the time of the subsequent restructuring.
If the TDR designation is removed from a loan that meets the conditions discussed above and the loan
is later modified in a TDR, the loan should be reported as a TDR.
Measurement of Impairment on a TDR when ASC Topic 326 Has Not Been Adopted – This section of
this Glossary entry applies to institutions that have not adopted ASC Topic 326. Institutions that have
adopted ASC Topic 326 should refer to the “Measurement of Expected Credit Losses on a TDR when
ASC Topic 326 Has Been Adopted” section below.
All loans whose terms have been modified in a TDR, including both commercial and retail loans, are
impaired loans. Therefore, an institution should measure any impairment on the restructured loan in
accordance with ASC Topic 310, Receivables, and should refer to the Glossary entry for "loan
impairment."
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A-106
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GLOSSARY
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GLOSSARY
Troubled Debt Restructurings (cont.):
An institution measuring the allowance on a TDR that is not collateral dependent using the present
value of expected future cash flows method (i.e., discounted cash flow method) should discount the
cash flows using the effective interest rate of the original or modified loan prior to the restructuring
that resulted in the TDR classification. For a residential mortgage loan with a “teaser” or starter rate
that is less than the loan’s fully indexed rate, the starter rate is not the original effective interest rate.
ASC Topic 310 also permits an institution to aggregate impaired loans that have risk characteristics in
common with other impaired loans, such as modified residential mortgage loans that represent TDRs,
and use historical statistics along with a composite effective interest rate as a means of measuring the
impairment of these loans.
For a subsequently restructured TDR, if at the time of the subsequent restructuring the institution
appropriately determines that the loan no longer meets the conditions discussed above, the impairment
on the loan need no longer be measured as a TDR (i.e., as an impaired loan) in accordance with
ASC Topic 310 and the Glossary entry for “Loan Impairment.” Accordingly, going forward, the loan’s
allowance should be measured under ASC Subtopic 450-20, Contingencies – Loss Contingencies.
For a subsequently restructured TDR on which there was principal forgiveness and therefore does not
meet the conditions discussed above, the impairment on the TDR should continue to be measured as a
TDR (i.e., as an impaired loan) in accordance with ASC Topic 310.
Measurement of Expected Credit Losses on a TDR when ASC Topic 326 Has Been Adopted – This
section of this Glossary entry applies to institutions that have adopted ASC Topic 326. Institutions that
have not adopted ASC Topic 326 should continue to refer to the “Measurement of Impairment on a
TDR when ASC Topic 326 Has Not Been Adopted” section above.
An institution should measure any expected credit losses on loans whose terms have been modified in
a TDR in accordance with ASC Topic 326 as set forth in the Glossary entry for "Allowance for Credit
Losses." ASC Topic 326 allows an institution to use any appropriate loss estimation method to
estimate ACLs for TDRs. However, there are circumstances when specific measurement methods are
required. For purposes of the Consolidated Reports of Condition and Income, if a TDR, or a loan for
which a TDR is reasonably expected, is collateral-dependent, the ACL must be estimated using the fair
value of collateral.
An institution measuring the allowance on a TDR, or a pool of TDRs with shared risk characteristics,
using the present value of expected future cash flow method (i.e., discounted cash flow method) should
discount the cash flows using the effective interest rate of the original or modified loan prior to the
restructuring that resulted in the TDR classification. For a residential mortgage loan with a “teaser” or
starter rate that is less than the loan’s fully indexed rate, the starter rate is not the original effective
interest rate.
When there is a reasonable expectation of executing a TDR or if a TDR has been executed, the
expected effect of the modification (e.g., a term extension or an interest rate concession) is included in
the estimate of the allowance.
If the TDR designation is removed from a loan balance when it is appropriate for the loan to no longer
be reported as a TDR, given the change in the loan’s risk characteristics, the institution should
determine whether the loan should be included in a pool of loans with similar risk characteristics for
allowance measurement purposes or evaluated for expected credit losses on an individual basis.
See also the Glossary entries for “Allowance for Credit Losses” or “Allowance for Loan and Lease
Losses,” as applicable, “Amortized Cost Basis,” and “Foreclosed Assets.”
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A-106a
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GLOSSARY
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GLOSSARY
Trust Preferred Securities: As bank investments, trust preferred securities are hybrid instruments
possessing characteristics typically associated with debt obligations. Although each issue of these
securities may involve minor differences in terms, under the basic structure of trust preferred securities a
corporate issuer, such as a bank holding company, first organizes a business trust or other special
purpose entity. This trust issues two classes of securities: common securities, all of which are
purchased and held by the corporate issuer, and trust preferred securities, which are sold to investors.
The business trust’s only assets are deeply subordinated debentures of the corporate issuer, which the
trust purchases with the proceeds from the sale of its common and preferred securities. The corporate
issuer makes periodic interest payments on the subordinated debentures to the business trust, which
uses these payments to pay periodic dividends on the trust preferred securities to the investors. The
subordinated debentures have a stated maturity and may also be redeemed under other circumstances.
Most trust preferred securities are subject to mandatory redemption upon the repayment of the
debentures.
Trust preferred securities meet the definition of a security in ASC Topic 320, Investments–Debt
Securities, and in ASC Topic 321, Investments–Equity Securities. Because of the mandatory
redemption provision in the typical trust preferred security, investments in trust preferred securities
would normally be considered debt securities for financial accounting purposes. Accordingly,
regardless of the authority under which a bank is permitted to invest in trust preferred securities,
banks should report these investments as debt securities for purposes of these reports (unless,
based on the specific facts and circumstances of a particular issue of trust preferred securities, the
securities would be considered equity securities under ASC Topic 321 rather than debt securities under
ASC Topic 320). If not held for trading purposes, an investment in trust preferred securities issued by
a single U.S. business trust should be reported in Schedule RC-B, item 6.a, “Other domestic debt
securities.” If not held for trading purposes, an investment in a structured financial product, such as a
collateralized debt obligation, for which the underlying collateral is a pool of trust preferred securities
issued by U.S. business trusts should be reported in Schedule RC-B, item 5.b, “Structured financial
products.”
U.S. Banks: See "Banks, U.S. and Foreign."
FFIEC 051
A-106b
(9-20)
GLOSSARY
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GLOSSARY
U.S. Territories and Possessions: United States territories and possessions include American Samoa,
Guam, the Northern Mariana Islands, and the U.S. Virgin Islands.
Valuation Allowance: In general, a valuation allowance is an account established against a specific
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 in the Consolidated Report of
Income and those established against asset accounts are netted from the accounts to which they relate
for presentation in the Consolidated Report of Condition. Provisions establishing or augmenting such
allowances are to be reported as "Other noninterest expense" except for the provision for loan and
lease losses which is reported in a separate, specifically designated income statement item on
Schedule RI.
Variable Interest Entity: A variable interest entity (VIE), as described 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)”), is an entity in which equity investors do not have sufficient equity at risk for
that entity to finance its activities without additional subordinated financial support or, as a group, the
holders of the equity investment at risk lack one or more of the following three characteristics: (a) the
power, through voting rights or similar rights, to direct the activities of an entity that most significantly
impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the
entity, or (c) the right to receive the expected residual returns of the entity.
Variable interests in a VIE are contractual, ownership, or other pecuniary interests in an entity that
change with changes in the fair value of the entity’s net assets exclusive of variable interests. For
example, equity ownership in a VIE would be a variable interest as long as the equity ownership is
considered to be at risk of loss.
ASC Subtopic 810-10 provides guidance for determining when a bank or other company must
consolidate certain special purposes entities, such as VIEs. Under ASC Subtopic 810-10, a bank must
perform a qualitative assessment to determine whether it has a controlling financial interest in a VIE. This
must include an assessment of the characteristics of the bank’s variable interest or interests and other
involvements (including involvement of related parties and de facto agents), if any, in the VIE, as well
as the involvement of other variable interest holders. The assessment must also consider the entity’s
purpose and design, including the risks that the entity was designed to create and pass through to its
variable interest holders. In making this assessment, only substantive terms, transactions, and
arrangements, whether contractual or noncontractual, are to be considered. Any term, transaction, or
arrangement that does not have a substantive effect on an entity’s status as a VIE, the bank’s power
over a VIE, or the bank’s obligation to absorb losses or its right to receive benefits of the VIE are to be
disregarded when applying the provisions of ASC Subtopic 810-10.
If a bank has a controlling financial interest in a VIE, it is deemed to be the primary beneficiary of the VIE
and, therefore, must consolidate the VIE. An entity is deemed to have a controlling financial interest in a
VIE if it has both of the following characteristics:
•
•
The power to direct the activities of a variable interest entity that most significantly impact the
entity’s economic performance.
The obligation to absorb losses of the entity that could potentially be significant to the variable
interest entity or the right to receive benefits from the entity that could potentially be significant to
the variable interest entity.
If a bank holds a variable interest in a VIE, it must reassess each reporting period to determine whether
it is the primary beneficiary. Based on a bank’s reassessment it may be required to consolidate or
deconsolidate the VIE if a change in the bank’s status as the primary beneficiary has occurred.
FFIEC 051
A-107
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GLOSSARY
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GLOSSARY
Variable Interest Entity (cont.):
ASC Subtopic 810-10 provides guidance on the initial measurement of a VIE that the primary
beneficiary must consolidate. For example, if the primary beneficiary and the VIE are not under
common control, the initial consolidation of a VIE that is a business is a business combination and
must be accounted for in accordance with ASC Topic 805, Business Combinations (formerly FASB
Statement No. 141 (revised 2007), "Business Combinations"). If a bank is required to deconsolidate a
VIE, it must follow the guidance for deconsolidating subsidiaries in ASC Subtopic 810-10 (formerly
FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements”).
When a bank is required to consolidate a VIE because it is the primary beneficiary, the standard
principles of consolidation apply after initial measurement (see “Rules of Consolidation” in the
General Instructions). The assets and liabilities of consolidated VIEs should be reported on the
Consolidated Report of Condition balance sheet (Schedule RC) in the balance sheet category
appropriate to the asset or liability. An institution that consolidates one or more VIEs must complete
Schedule SU, items 7.a and 7.b, to report (a) the total assets of consolidated VIEs and (b) the total
liabilities of consolidated VIEs.
When-Issued Securities Transactions: Transactions involving securities described as "when-issued" 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 regular-way 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 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). A bank 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 RC) and the notional amount of the
contract should be reported in the appropriate subitem of Schedule SU, item 1. 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 bank 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 RC) at the inception of the contract. If the bank accounts for these contracts on a
settlement-date basis, contracts for the purchase of when-issued securities should be reported as
"Other off-balance sheet liabilities" in Schedule RC-L, item 9, and contracts for the sale of when-issued
securities should be reported as "Other off-balance sheet assets" in Schedule RC-L, item 10, subject to
the existing reporting thresholds for these two items.
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When-Issued Securities Transactions (cont.):
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 bank shall be reported on the balance sheet as held-to-maturity securities in Schedule RC,
item 2.a; available-for-sale debt securities in Schedule RC, item 2.b; or trading assets in Schedule RC,
item 5, as appropriate.
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A-109
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GLOSSARY
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| File Type | application/pdf |
| File Modified | 2021-02-17 |
| File Created | 2017-04-03 |