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pdfFFIEC 051
CALL REPORT
INSTRUCTION BOOK UPDATE
MARCH 2021
FILING INSTRUCTIONS
NOTE: This update for the instruction book for the FFIEC 051 Call Report is designed for two-sided
(duplex) printing. The pages listed in the column below headed “Remove Pages” are no longer needed in
the 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) and should be removed and
discarded. The pages listed in the column headed “Insert Pages” are included in this instruction book
update and should be filed promptly in your instruction book for the FFIEC 051 Call Report.
Remove Pages
Insert Pages
Cover Page (12-20)
RI-9 – RI-12 (9-16, 3-19)
RI-25 – RI-26 (12-20)
RI-B-7 – RI-B-10 (3-19)
RC-C-37 – RC-C-40 (3-17, 6-18)
RC-E-3 – RC-E-6 (3-17)
RC-M-1 – RC-M-2 (3-20)
RC-M-17 – RC-M-20 (6-14)
RC-N-1 – N-4a (3-19)
RC-R-1 – RC-R-4 (6-20, 12-20)
RC-R-13 – RC-R-14 (3-20)
RC-R-19 – RC-R-20 (6-20)
RC-R-27 – RC-R-28 (12-20)
RC-R-31 – RC-R-32 (6-20)
RC-R-35 – RC-R-36 (12-20)
RC-R-53 – RC-R-56 (9-19, 3-20)
RC-R-59 – RC-R-60 (12-20)
RC-R-65 – RC-R-68 (12-18, 6-20)*
RC-R-69 – RC-R-74 (3-19, 6-20)*
RC-R-77– RC-R-80 (6-20)
A-4a – A-4b (6-20)
A-25 – A-34 (9-20)
A-49 – A-50 (3-20)
A-75 – A-78 (3-20)
A-83– A-84a (3-20)
Cover Page (3-21)
RI-9 – RI-12 (3-21)
RI-25 – RI-26 (3-21)
RI-B-7 – RI-B-10 (3-21)
RC-C-37 – RC-C-41 (3-21)
RC-E-3 – RC-E-6 (3-21)
RC-M-1 – RC-M-2 (3-21)
RC-M-17 – RC-M-22 (3-21)
RC-N-1 – RC-N-4a (3-21)
RC-R-1 – RC-R-4 (3-21)
RC-R-13 – RC-R-14a (3-21)
RC-R-19 – RC-R-20a (3-21)
RC-R-27 – RC-R-28 (3-21)
RC-R-31 – RC-R-32a (3-21)
RC-R-35 – RC-R-36 (3-21)
RC-R-53 – RC-R-56 (3-21)
RC-R-59 – RC-R-60 (3-21)
RC-R-65 – RC-R-68 (3-21)
RC-R-69 – RC-R-74 (3-21)
RC-R-77 – RC-R-80 (3-21)
A-4a – A-4b (3-21)
A-33 – A-34 (3-21)
A-49 – A-50 (3-21)
A-75 – A-78 (3-21)
A-83– A-84a (3-21)
* Do not remove page RC-R-68a (6-20). This page should be retained.
(3-21)
Instructions for Preparation of
Consolidated Reports of Condition and Income
FFIEC 051
Updated March 2021
This page intentionally left blank.
FFIEC 051
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 all financial
assets and off-balance-sheet credit exposures within the scope of the ASU. Financial assets
within the scope of the ASU include those 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 off-balance-sheet credit exposures represent the
amounts necessary to adjust the related allowance for credit losses at the quarter-end report
date for management’s current estimate of expected credit losses on these exposures.
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 items 5 and 7. Report negative amounts with a minus (-) sign.
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," “loan impairment,”
and “allowance for credit losses,” as applicable, for additional information.
FFIEC 051
RI-9
(3-21)
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.
FFIEC 051
RI-10
(3-21)
RI - INCOME STATEMENT
FFIEC 051
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
Not applicable.
5.d.
Income from securities-related and insurance activities. For items 5.d.(1) and 5.d.(2)
below, when an institution partners with, or otherwise joins with, a third party to conduct
securities brokerage, investment banking, investment advisory, securities underwriting,
insurance and annuity sales, insurance underwriting, or any other securities-related and
insurance activities, and any fees and commissions generated by these activities are shared
with the third party, the reporting institution should report its share of the fees or commissions
in the appropriate subitem of this item 5.d rather than reporting the gross fees and
commissions in the appropriate subitem and the third party’s share of the fees and
commissions in Schedule RI, item 7.d, “Other noninterest expense.
5.d.(1)
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.
FFIEC 051
RI-11
(3-21)
RI - INCOME STATEMENT
FFIEC 051
RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.d.(1)
(cont.)
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.
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.
RI-12
(3-21)
RI - INCOME STATEMENT
FFIEC 051
RI - INCOME STATEMENT
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) For institutions that have not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses, provisions 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.”
FFIEC 051
RI-25
(3-21)
RI - INCOME STATEMENT
FFIEC 051
RI - INCOME STATEMENT
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”).
(c) Provisions for credit losses on off-balance-sheet credit exposures from this item 7.d;
report these provisions in Schedule RI-B, Part II, Memorandum item 7, and include
them in Schedule RI, item 4, “Provision for loan and lease losses.”
(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.
FFIEC 051
RI-26
(3-21)
RI - INCOME STATEMENT
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
(3-21)
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
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 items 5, “Provisions for credit losses on other financial assets measured at
amortized cost,” and 7, “Provisions for credit losses on off-balance-sheet credit exposures
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
(3-21)
RI-B - ALLOWANCE
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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
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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, 6, and 7 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-B, Part II, Memorandum item 7, below.
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.
7
FFIEC 051
Provisions for credit losses on off-balance-sheet credit exposures. Report in this item
the year-to-date amount of provisions for credit losses (or reversals of provisions) on offbalance-sheet credit exposures included in the amount reported in Schedule RI, item 4.
Provisions for credit losses (or reversals of provisions) on off-balance-sheet credit exposures
represent the amounts necessary to adjust the related allowance for credit losses at the
quarter-end report date for management’s current estimate of expected credit losses on
these exposures.
RI-B-10
(3-21)
RI-B - ALLOWANCE
FFIEC 051
RC-C - LOANS AND LEASES
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 (in domestic offices) (as reported in Schedule RC-C, part
I, items 1.a.(1) and 1.a.(2), column B) that exceeded the sum of tier 1 capital (as reported in
Schedule RC-R, Part I, item 26) plus the allowance for loan and lease losses or the
allowance for credit losses on loans and leases, as applicable (as reported in Schedule RC,
item 4.c), 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, items 1.a.(1) and 1.a.(2), column B, 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, items 1.a.(1) and 1.a.(2), column B,
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, items 1.a.(1) and 1.a.(2), column B, 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, items 1.a.(1) and 1.a.(2), column B) that have been granted for the purpose of paying
interest on existing construction loans (in domestic offices) when the new construction loan is
secured by the same real estate that secures the existing construction loan.
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
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RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
14
(cont.)
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
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.”
FFIEC 051
RC-C-38
(3-21)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
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.
NOTE: Memorandum item 16 is to be completed semiannually in the June and December reports only.
16
FFIEC 051
Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit (in domestic offices) that have converted to non-revolving closedend status (included in item 1.c.(1) above). Report the amount outstanding of loans
included in Schedule RC-C, Part I, item 1.c.(1), that have converted to non-revolving, closedend status, but originated as draws under revolving, open-end lines of credit secured by 1-to4 family residential properties, including those for which the draw periods have ended.
RC-C-39
(3-21)
RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
17
Eligible loan modifications under Section 4013, Temporary Relief from Troubled Debt
Restructurings, of the 2020 Coronavirus Aid, Relief, and Economic Security Act. As
provided for under the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES
Act), a financial institution may elect to account for an eligible loan modification under Section
4013 of that Act (Section 4013 loan). If a loan modification is not eligible under Section 4013,
or if the institution elects not to account for an eligible loan modification under Section 4013,
the institution should not report the loan in Memorandum items 17.a and 17.b and should
instead evaluate whether the modified loan is a troubled debt restructuring (TDR) under ASC
Subtopic 310-40, Receivables– Troubled Debt Restructurings by Creditors.
To be an eligible loan modification under Section 4013, as amended by the Consolidated
Appropriations Act, 2021, a loan modification must be (1) related to the Coronavirus Disease
2019 (COVID-19); (2) executed on a loan that was not more than 30 days past due as of
December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days
after the date of termination of the national emergency concerning the COVID-19 outbreak
declared by the President on March 13, 2020, under the National Emergencies Act or (B)
January 1, 2022 (the applicable period).
Institutions accounting for eligible loan modifications under Section 4013 are not required to
apply ASC Subtopic 310-40 to the Section 4013 loans for the term of the loan modification
and do not have to report Section 4013 loans as TDRs in regulatory reports, subject to the
following considerations for additional modifications. If an institution elects to account for a
loan modification under Section 4013, an additional loan modification could also be eligible
under Section 4013 provided it is executed during the applicable period and meets the other
statutory criteria referenced above. If an institution does not elect to account for a loan
modification under Section 4013 or a loan modification is not eligible under Section 4013
(e.g., because it is executed after the applicable period), additional modifications should be
viewed cumulatively in determining whether the additional modification is accounted for as a
TDR under ASC Subtopic 310-40.
Consistent with the CARES Act, the agencies are collecting information on a fully
consolidated basis about the volume of Section 4013 loans, including the number of Section
4013 loans outstanding (Memorandum item 17.a) and the outstanding balance of Section
4013 loans (Memorandum item 17.b). These two items are collected on a confidential basis
at the institution level. Once the term of an eligible Section 4013 loan modification ends, an
institution should no longer include the loan in these Schedule RC-C, Part I, Memorandum
items.
For further information on loan modifications, including those that may not be eligible under
Section 4013 or for which an institution elects not to apply Section 4013, institutions may
refer to the Interagency Statement on Loan Modifications and Reporting for Financial
Institutions Working with Customers Affected by the Coronavirus (Revised), issued April 7,
2020, and the Joint Statement on Additional Loan Accommodations Related to COVID-19
issued August 3, 2020.
17.a
FFIEC 051
Number of Section 4013 loans outstanding. Report the number of Section 4013 loans
outstanding held by the reporting institution as of the report date whose outstanding balances
are included in the amount reported in Schedule RC-C, Part I, Memoranda item 17.b, below.
RC-C-40
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RC-C - LOANS AND LEASES
FFIEC 051
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
17.b
FFIEC 051
Outstanding balance of Section 4013 loans. Report the aggregate amount at which
Section 4013 loans held for investment and held for sale are included in Schedule RC-C, Part
I, and Section 4013 loans held for trading are included in Schedule RC, item 5, as of the
report date.
RC-C-41
(3-21)
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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
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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 distinction between transaction and nontransaction accounts is discussed in detail in the Glossary
entry for "deposits.”
Deposits defined in Regulation D as transaction accounts include demand deposits, NOW accounts,
telephone and preauthorized transfer accounts, and savings deposits. However, for Call Report purposes,
savings deposits are classified as a type of nontransaction account.
For institutions that have suspended the six transfer limit on an account that meets the definition of a
savings deposit, please see the “Treatment of Accounts where Reporting Institutions Have Suspended
Enforcement of the Six Transfer Limit per Regulation D” in the Glossary entry for “deposits” for further
details on reporting savings deposits.
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
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 nontransaction
accounts as 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.
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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)
FFIEC 051
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.
RC-E-6
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RC-E - DEPOSITS
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.
Loans that are guaranteed under the U.S. Small Business Administration (SBA) Paycheck
Protection Program (PPP) are excepted from the requirements of section 22(h) of the Federal
Reserve Act and the corresponding provisions of Regulation O if they are not prohibited by
SBA lending restrictions. Accordingly, such PPP loans should not be reported in Schedule
RC-M, items 1.a and 1.b, below. See Section 215.3(b)(8) of Regulation O 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,
FFIEC 051
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RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
1.a
(cont.)
regardless of the number of executive officers, directors, principal shareholders, and related
interests thereof to whom the extension of credit has been made.
1.b
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
(3-21)
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
(3-21)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
16.b.(2)
(cont.)
ending on the report date for which your institution applied the permanent exchange rate
exception set forth in 12 CFR § 1005.32(b)(4).
16.b.(3)
FFIEC 051
Estimated number of international remittance transfers for which your institution
applied the permanent covered third-party fee exception. Report the estimated number
of international remittance transfers that your institution provided during the calendar year
ending on the report date for which your institution applied the permanent covered third-party
exception set forth in 12 CFR § 1005.32(b)(5).
RC-M-20
(3-21)
RC-M - MEMORANDA
FFIEC 051
Item No.
17
RC-M - MEMORANDA
Caption and Instructions
U.S. Small Business Administration Paycheck Protection Program (PPP) loans and
the Federal Reserve PPP Liquidity Facility (PPPLF). The PPP was established by
Section 1102 of the 2020 Coronavirus Aid, Relief, and Economic Security Act, which was
enacted on March 27, 2020 and amended on June 5, 2020. PPP covered loans (PPP
loans) are fully guaranteed as to principal and accrued interest by the U.S. Small
Business Administration (SBA).
The PPPLF was authorized by the Board of Governors of the Federal Reserve System
on April 8, 2020, under Section 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)).
Under the PPPLF, the Federal Reserve Banks extends non-recourse loans to eligible
lenders, with the extensions of credit secured by SBA-guaranteed PPP loans that the
lenders have originated or purchased.
Items 17.a through 17.e should be completed on a fully consolidated basis.
17.a
Number of PPP loans outstanding. Report the number of PPP loans outstanding held
by the reporting institution as of the report date whose outstanding balances are included
in the amount reported in Schedule RC-M, Memoranda item 17.b, below.
17.b
Outstanding balance of PPP loans. Report the aggregate amount at which PPP loans
held for investment and held for sale are included in Schedule RC-C, Part I, and PPP
loans held for trading are included in Schedule RC, item 5, as of the report date.
17.c
Outstanding balance of PPP loans pledged to the PPPLF. For PPP loans pledged to
the PPPLF, report the aggregate amount at which such PPP loans held for investment
and held for sale are included in Schedule RC-C, Part I, and such PPP loans held for
trading are included in Schedule RC, item 5, as of the report date.
Pledged PPP loans held for investment or held for sale that should be included in this
item will also have been included in Schedule RC-C, Part I, Memorandum item 14,
“Pledged loans and leases.” On the FFIEC 031, pledged PPP loans held for trading that
should be included in this item will also have been included in Schedule RC-D,
Memorandum item 4.b, “Pledged loans.”
17.d
Outstanding balance of borrowings from Federal Reserve Banks under the PPPLF
with a remaining maturity of. Report in the appropriate subitem the specified
information about the outstanding amount of borrowings from Federal Reserve Banks
under the PPPLF reported in Schedule RC, item 16. The maturity date of an extension of
credit under the PPPLF equals the maturity date of the PPP loan pledged to secure the
extension of credit, which is either two or five years from origination of the PPP loan.
However, the maturity date of the extension of credit will be accelerated and the
institution is required to repay the extension of credit under the PPPLF prior to its maturity
date when the institution has been reimbursed by the SBA for a PPP loan forgiveness (to
the extent of the forgiveness), has received payment from the SBA representing exercise
of the PPP loan guarantee, or has received payment from the PPP borrower of the
underlying PPP loan (to the extent of the payment received).
The remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of the borrowing without regard to the borrowing’s repayment
schedule, if any.
FFIEC 051
RC-M-21
(3-21)
RC-M - MEMORANDA
FFIEC 051
RC-M - MEMORANDA
Item No.
Caption and Instructions
17.d.(1)
One year or less. Report the outstanding amount as of the report date of borrowings by
the reporting institution from a Federal Reserve Bank under the PPPLF with a remaining
maturity of one year or less.
.
The borrowings that should be included in this item will also have been included in
(1) Schedule RC-M, item 5.b.(1)(a), “Other borrowings with a remaining maturity or next
repricing date of One year or less,” (2) Schedule RC-M, item 5.b.(2), “Other borrowings
with a remaining maturity of one year or less,” and (3) Schedule RC-M, item 10.b,
“Amount of ‘Other borrowings’ that are secured.”
17.d.(2)
More than one year. Report the outstanding amount as of the report date of borrowings
by the reporting institution from a Federal Reserve Bank under the PPPLF with a
remaining maturity of more than one year.
The borrowings that should be included in this item will also have been included in (1)
Schedule RC-M, item 5.b.(1)(b), Other borrowings with a remaining maturity or next
repricing date of “Over one year through three years,” or Schedule RC-M, item 5.b.(1)(c),
“Over three years through five years,” as appropriate, and (2) Schedule RC-M, item 10.b,
“Amount of ‘Other borrowings’ that are secured.”
17.e
Quarterly average amount of PPP loans pledged to the PPPLF and excluded from
“Total assets for the leverage ratio” reported in Schedule RC-R, Part I, item 30.
Report the quarterly average amount of PPP loans pledged to the PPPLF that are
included as a deduction in Schedule RC-R, Part I, item 29, “LESS: Other deductions from
(additions to) assets for leverage ratio purposes,” and thus excluded from “Total assets
for the leverage ratio” reported in Schedule RC-R, Part I, item 30.
This quarterly average should be consistent with and calculated using the same
averaging method used for calculating the quarterly average for “Total assets” reported in
Schedule RC-K, item 9.
18
Money Market Mutual Fund Liquidity Facility (MMLF). To prevent the disruption in the
money markets from destabilizing the financial system, the Board of Governors of the
Federal Reserve System authorized the Federal Reserve Bank of Boston on March 19,
2020, to establish the MMLF pursuant to Section 13(3) of the Federal Reserve Act (12
U.S.C. 343(3)). Under the MMLF, the Federal Reserve Bank of Boston extends nonrecourse loans to eligible borrowers to purchase eligible assets from money market
mutual funds, which is posted as collateral to the Federal Reserve Bank of Boston.
18.a
Outstanding balance of assets purchased under the MMLF. Report on a fully
consolidated basis the aggregate amount at which the reporting institution’s holdings of
assets purchased under the MMLF are included in Schedule RC, item 1.b, “Interestbearing balances” due from depository institutions; item 2.a, “Held-to-maturity securities;”
item 2.b, “Available-for-sale securities;” item 5, “Trading assets;” and item 11, “Other
assets;” as appropriate, as of the report date.
18.b
Quarterly average amount of assets purchased under the MMLF and excluded from
“Total assets for the leverage ratio” reported in Schedule RC-R, Part I, item 30.
Report the quarterly average amount of assets purchased under the MMLF that are
included as a deduction in Schedule RC-R, Part I, item 29, “LESS: Other deductions from
(additions to) assets for leverage ratio purposes,” and thus excluded from “Total assets
for the leverage ratio” reported in Schedule RC-R, Part I, item 30.
This quarterly average should be consistent with and calculated using the same
averaging method used for calculating the quarterly average for “Total assets” reported in
Schedule RC-K, item 9.
FFIEC 051
RC-M-22
(3-21)
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
(3-21)
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 (PCI) loan accounted for individually or a PCI 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 PCI 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 PCI loans and debt securities held as of the
adoption date of the standard should prospectively be accounted for as purchased credit-deteriorated
(PCD) assets. As of the adoption date of the standard, the remaining noncredit discount or premium on a
PCD asset, after the adjustment for the allowance for credit losses should be accreted to interest income
FFIEC 051
RC-N-2
(3-21)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Definitions (cont.)
at the new effective interest rate on the asset, if the asset is not required to be placed on nonaccrual. For
a PCD loan, debt security, or other financial asset within the scope of ASU 2016-13 that is not reported in
nonaccrual status, the delinquency status of the PCD asset should be determined in accordance with its
contractual repayment terms for purposes of reporting the amortized cost basis of the asset (fair value for
a PCD available-for-sale debt security) as past due in Schedule RC-N, column A or B, as appropriate. If
the PCD asset that is not reported in nonaccrual status consists of a pool of loans that was previously
PCI, but is being maintained as a unit of account after the adoption of ASU 2016-13, delinquency status
should be determined individually for each loan in the pool in accordance with the individual loan’s
contractual repayment terms. For further information, see the Glossary entry for “purchased creditdeteriorated assets.”
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 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.
(2) For an institution that has not adopted ASU 2016-13, 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, are met for a PCI 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 PCI 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."
FFIEC 051
RC-N-3
(3-21)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Definitions (cont.)
(3) For an institution that has adopted ASU 2016-13, the following criteria are met for a PCD asset,
including a PCD asset that was previously a PCI asset or part of a pool of PCI assets, that would
otherwise be required to be placed in nonaccrual status (see the Glossary entry for “nonaccrual
status”):
(a) The institution reasonably estimates the timing and amounts of cash flows expected to be
collected, and
(b) The institution did not acquire the asset primarily for the rewards of ownership of the underlying
collateral, such as use of collateral in operations of the institution or improving the collateral for
resale.
When a PCD asset that meets the criteria above is not placed in nonaccrual status, the asset should be
subject to other alternative methods of evaluation to ensure that the institution’s net income is not
materially overstated. Further, regardless of whether a PCD asset is in nonaccrual or accrual status, an
institution is not permitted to accrete the credit-related discount embedded in the purchase price of such
an asset that is attributable to the acquirer’s assessment of expected credit losses as of the date of
acquisition (i.e., the contractual cash flows the acquirer did not expect to collect at acquisition). Interest
income should no longer be recognized on a PCD asset to the extent that the net investment in the asset
would increase to an amount greater than the payoff amount. If an institution is required or has elected to
carry a PCD asset in nonaccrual status, the asset must be reported as a nonaccrual asset at its \
amortized cost basis (fair value for a PCD available-for-sale debt security) in Schedule RC-N, column C.
(For PCD assets for which the institution has made a policy election to maintain previously existing pools
of PCI loans upon adoption of ASU 2016-13, the determination of nonaccrual or accrual status should be
made at the pool level, not the individual asset level.) For further information, see the Glossary entry for
“purchased credit-deteriorated assets.”
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.
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
FFIEC 051
RC-N-4
(3-21)
RC-N - PAST DUE
FFIEC 051
RC-N - PAST DUE
Definitions (cont.)
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.”
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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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.
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
3-Year and 5-Year 2020 CECL Transition Provisions
Item Instructions for Schedule RC-R, Part I
RC-R-1
RC-R-1
RC-R-2b
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. 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.
On April 23, 2020, the federal banking agencies published two interim final rules to provide temporary
relief to community banking organizations with respect to the CBLR framework, and the final rule became
effective November 9, 2020 with no changes to the interim final rules. The final rule provides community
banking organizations with a clear and gradual transition, by January 1, 2022, back to the greater than 9
percent leverage ratio qualifying criterion previously established by the agencies. The other qualifying
criteria in the CBLR framework have not been modified by the final rule.
A qualifying institution with a leverage ratio that exceeds the applicable leverage ratio requirement 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.1
Transition Provisions – Under the provisions of the transition interim final rule, an institution may qualify
for the CBLR framework if its leverage ratio is greater than 8.5 percent in calendar year 2021, and greater
than 9 percent in calendar year 2022 and thereafter, and it meets the qualifying criteria: it has less than
$10 billion in total consolidated assets (Schedule RC-R, Part I, item 32); is not part of an advanced
approaches banking organization; 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 cancellable commitments) of
25 percent or less of total consolidated assets (Schedule RC-R, Part I, item 34). Also, the two-quarter
grace period for a qualifying institution will take into account the graduated increase in the community
bank leverage ratio requirement qualifying criterion. In order to maintain eligibility for the CBLR framework
during the transition period, an institution’s leverage ratio cannot fall more than one percentage point
below the community bank leverage ratio requirement qualifying criterion.
Table 1 – Schedule of Community Bank Leverage Ratio Requirements
Calendar Year
2021
2022
1
Community Bank
Leverage Ratio
(percent)
> 8.5
> 9.0
Minimum Leverage
Ratio under the
applicable grace
period (percent)
> 7.5
> 8.0
See 12 CFR 3 (OCC); 12 CFR 217 (Board); 12 CFR 324 (FDIC).
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General Instructions for Schedule RC-R, Part I. (cont.)
Community Bank Leverage Ratio (CBLR) Framework in Calendar Year 2022 and Thereafter ‒ 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 RCR, Part I, item 34).
Ceasing to Meet the Leverage Ratio Requirement under the CBLR Framework or Failing to Meet Any of
the Other CBLR Qualifying Criteria ‒ A qualifying institution that temporarily fails to meet any of the
qualifying criteria, including the applicable leverage ratio requirement, generally would still be deemed
well-capitalized so long as the institution maintains a leverage ratio that does not fall more than one
percentage point below the leverage ratio requirement during the two-quarter grace period. At the end of
the grace period (see below for an example), the institution must meet all qualifying criteria to remain in
the CBLR framework or otherwise must apply and report under the generally applicable capital rule.
Similarly, an institution with a leverage ratio that is not within one percentage point of the leverage ratio
requirement qualifying criterion under the CBLR framework is not eligible for the grace period and must
comply with the generally applicable capital rule by completing all of Schedule RC-R, Parts I and II, as
applicable, 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 has a maximum period of two
consecutive calendar quarters. For example, if the CBLR electing institution had met all of the qualifying
criteria as of March 31, 2020, but no longer meets one of the qualifying criteria as of May 15, 2020, 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 June 30, 2020.
The institution may continue to use the CBLR framework as of September 30, 2020, but will need to
comply fully with the generally applicable capital rule (including the associated Schedule RC-R reporting
requirements) as of December 31, 2020, unless the institution once again meets all qualifying criteria of
the CBLR framework, including the leverage ratio requirement qualifying criterion, before that time.
If a CBLR electing institution is in the grace period when the required community bank leverage ratio
increases, the institution would be subject, as of the date of that change, to both the higher community
bank leverage ratio requirement and higher grace period leverage ratio requirement. For example, if a
CBLR electing institution that had met all of the qualifying criteria as of September 30, 2020, has a 7.2
percent community bank leverage ratio (but meets all of the other qualifying criteria) as of December 31,
2020, the grace period for such an institution will begin as of the end of the fourth quarter of 2020. The
institution may continue to use the CBLR framework as of March 31, 2021, if the institution has a leverage
ratio of greater than 7.5 percent, and will need to comply fully with the generally applicable capital rule
(including the associated Schedule RC-R reporting requirements) as of June 30, 2021, unless the
institution has a leverage ratio of greater than 8.5 percent (and meets all of the other qualifying criteria) by
that date. In this example, if the institution has a leverage ratio equal to or less than 7.5 percent as of
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.
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General Instructions for Schedule RC-R, Part I. (cont.)
March 31, 2021, it would not be eligible to use the CBLR framework and would be subject immediately to
the requirements of the generally applicable capital rule.
3-Year and 5-Year 2020 CECL Transition Provisions
In 2019, the federal banking agencies issued a final rule that, among other provisions, revised the
agencies’ regulatory capital rule and included a transition option that allows institutions to phase in over a
3-year transition period the day-one effects of adopting the current expected credit losses methodology
(CECL) on their regulatory capital ratios (2019 CECL rule).
In 2020, the agencies issued a final rule that provides institutions that implement CECL during the 2020
calendar year the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative
to the incurred loss methodology’s effect on regulatory capital, followed by a 3-year transition period,
thereby resulting in a 5-year transition period (2020 CECL rule).
Eligibility for, and Transition Period under, the 3-Year CECL Transition – An institution is eligible to use
the 3-Year CECL transition provision if it experiences a reduction in retained earnings due to CECL
adoption as of the beginning of the fiscal year in which the institution adopts CECL. The transition period
under the 3-year CECL transition provision means the three-year period beginning the first day of the
fiscal year in which an institution adopts CECL and reflects CECL in its first Call Report filed after that
date.
An institution that is eligible to use the 3-year CECL transition provision may elect to phase in the
regulatory capital impact of adopting CECL over a 3-year transition period (a 3-year CECL electing
institution). A 3-year CECL electing institution is required to begin applying the 3-year CECL transition
provision as of the electing banking organization’s CECL adoption date. A 3-year CECL electing
institution must indicate in Schedule RC-R, Part I, item 2.a, its election to use the 3-year CECL transition
provision and must report the transitional amounts, as defined below and as applicable, in the affected
items of Schedule RC-R, adjusted for the transition provisions, beginning in the Call Report for the quarter
in which the institution first reports its credit loss allowances as measured under CECL.
An institution that does not elect to use the 3-year CECL transition provision in the Call Report for the
quarter in which it first reports its credit loss allowances as measured under CECL is not permitted to
make an election in subsequent reporting periods and is required to reflect the full effect of CECL in its
regulatory capital ratios beginning as of the institution’s CECL adoption date.
An institution that initially elects to use the 3-year CECL transition provision, but opts out of this transition
provision in a subsequent reporting period, is not permitted to resume using the 3-year CECL transition
provision at a later date within the 3-year transition period. An institution may opt out of applying the
transition provision by reflecting the full impact of CECL on regulatory capital in Call Report Schedule RCR.
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General Instructions for Schedule RC-R, Part I. (cont.)
Eligibility for the 5-Year 2020 CECL Transition – An institution is eligible to use the 5-Year 2020 CECL
transition provision if it adopts CECL under U.S. GAAP as of the first day of a fiscal year that begins
during the 2020 calendar year and
(1) Reports a decrease in retained earnings immediately upon adoption of CECL; or
(2) Would report a positive modified CECL transitional amount (as defined below) in any quarter ending
in 2020 after adopting CECL.
An institution must indicate in Schedule RC-R, Part I, item 2.a, its election to use the 5-year 2020 CECL
transition provision in calendar year 2020 in the first Call Report filed after the institution adopts CECL or
the same Call Report in which the institution first reports a positive modified CECL transitional amount for
any calendar quarter ending in 2020 (5-year CECL electing institution).
Even if an institution elects to use the 5-Year 2020 CECL transition provision, the institution may only
reflect the regulatory capital adjustments set forth in the 2020 CECL rule in the quarter or quarters in
which the institution implements CECL for regulatory reporting purposes. An institution that has elected
the 5-year 2020 CECL transition provision, but would not report a positive modified CECL transitional
amount in a particular quarter, is not required to make the adjustments in Call Report Schedule RC-R in
that quarter.
Transition Period under the 5-Year 2020 CECL Transition – Beginning with the earlier of:
(1) The first quarter of the fiscal year in which an institution was required to adopt CECL under U.S.
GAAP (as in effect on January 1, 2020), or
(2) The first day of a fiscal year that begins in the 2020 calendar year in which the institution files Call
Reports reflecting CECL,
and for the subsequent 19 quarters (for a total of 20 quarters or the five-year transition period), an
institution is permitted to make the adjustments described below to amounts used in calculating
regulatory capital.
If an institution temporarily ceases using CECL during this period (i.e., due to election of Section 4014 of
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act))1, the institution may not reflect
regulatory capital adjustments for any quarter (during the first 8 quarters) in which it did not implement
CECL, but it would be allowed to apply the transition in subsequent quarters when the institution uses
CECL. However, an institution that has elected the transition, but does not apply it in any quarter, does
not receive any extension of the transition period.
Example 1: An institution was required to adopt CECL on January 1, 2020. This institution,
however, delays adoption of CECL under Section 4014 of the CARES Act until July 1, 2020, and
elects to use the 5-Year 2020 CECL transition provision. This institution’s transition period begins
on January 1, 2020, despite not adopting CECL until July 1, 2020. As such, on July 1, 2020, this
institution would have 18 quarters2 including the quarter of adoption, remaining in its transition
period.
Example 2: An institution was required to adopt CECL on October 1, 2020, and elects to use the
5-Year 2020 CECL transition provision. This institution does not delay adoption of CECL under
Section 4014 of the CARES Act. This institution’s transition period begins on October 1, 2020. As
such, on October 1, 2020, this institution would have 20 quarters, including the quarter of
adoption, remaining in its transition period.
1
Section 4014 of the CARES Act, as amended by the Consolidated Appropriations Act, 2021,7 allows an
institution to delay the adoption of Accounting Standards Update (ASU) 2016-13, Financial Instruments –
Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, until the earlier of (1)
January 1, 2022, or (2) the first day of the institution’s fiscal year that begins after the date of the termination of
the National Emergency
2
Six quarters of the initial transition followed by 12 quarters of the phase-out of the transition.
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General Instructions for Schedule RC-R, Part I. (cont.)
For the first 8 quarters after the start of its transition period, an institution is permitted to make an
adjustment of 100 percent of the transitional items calculated below for each quarter in which the
institution applies CECL. Beginning with the ninth quarter of the transition period, the institution phases
out the cumulative adjustment as calculated at the end of the eighth quarter (i.e., the first two years of the
5-Year 2020 CECL transition provision) over the following 12 quarters as follows: 75 percent adjustment
in quarters 9-12 (i.e., Year three); 50 percent adjustment in quarters 13-16 (i.e., Year four); and
25 percent adjustment in quarters 17-20 (i.e., Year five).
Definitions – Institutions that elect either the 3-year CECL transition provision or the 5-year 2020 CECL
transition provision must calculate the following amounts, as applicable. AACL refers to Adjusted
Allowances for Credit Losses and ALLL refers to the Allowance for Loan and Lease Losses, both as
defined in the regulatory capital rule (12 CFR 3.2 (OCC); 12 CFR 217.2 (Board); and 12 CFR 324.2
(FDIC)).
•
CECL transitional amount means the difference, net of any deferred tax assets (DTAs), in the
amount of an institution’s retained earnings as of the beginning of the fiscal year in which the
institution adopts CECL from the amount of the institution’s retained earnings as of the closing of
the fiscal year- end immediately prior to the institution’s adoption of CECL.
•
DTA transitional amount means the difference in the amount of an institution’s DTAs arising from
temporary differences as of the beginning of the fiscal year in which the institution adopts CECL
from the amount of the institution’s DTAs arising from temporary differences as of the closing of
the fiscal year-end immediately prior to the institution’s adoption of CECL.
•
AACL transitional amount means the difference in the amount of an institution’s AACL as of the
beginning of the fiscal year in which the institution adopts CECL and the amount of the
institution’s ALLL as of the closing of the fiscal year-end immediately prior to the institution’s
adoption of CECL.
•
Eligible credit reserves transitional amount means the difference in the amount of an advanced
approaches institution’s eligible credit reserves as of the beginning of the fiscal year in which the
institution adopts CECL from the amount of the institution’s eligible credit reserves as of the
closing of the fiscal year-end immediately prior to the institution’s adoption of CECL.
In addition, institutions that elect the 5-year 2020 CECL transition provision must calculate the following
amounts:
•
Modified CECL transitional amount means:
o During the first two years of the transition period, the difference between the AACL as reported in
the most recent Call Report, and the AACL as of the beginning of the fiscal year in which the
institution adopts CECL, multiplied by 0.25, plus the CECL transitional amount, and
o During the last three years of the transition period, the difference between the AACL as reported
in the Call Report at the end of the second year of the transition period and the AACL as of the
beginning of the fiscal year in which the institution adopts CECL, multiplied by 0.25, plus the
CECL transitional amount.
•
Modified AACL transitional amount means:
o During the first two years of the transition period, the difference between the AACL as reported in
the most recent Call Report, and the AACL as of the beginning of the fiscal year in which the
institution adopts CECL, multiplied by 0.25, plus the AACL transitional amount, and
o During the last three years of the transition period, the difference between the AACL as reported
in the Call Report at the end of the second year of the transition period and the AACL as of the
beginning of the fiscal year in which the institution adopts CECL, multiplied by 0.25, plus the
AACL transitional amount.
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General Instructions for Schedule RC-R, Part I. (cont.)
A 3-year or 5-year CECL electing advanced approaches institution (1) that has completed the parallel run
process and has received notification from its primary federal regulator pursuant to section 121(d) under
subpart E of the regulatory capital rules, (2) whose amount of expected credit loss exceeded its eligible
credit reserves immediately prior to the adoption of CECL, and (3) would have an increase in common
equity tier 1 capital as of the beginning of the fiscal year in which it adopts CECL after including the first
year portion of the CECL transitional amount or modified CECL transitional amount, as applicable, must
decrease its CECL transitional amount or modified CECL transitional amount, as applicable, by its DTA
transitional amount.
Example and a Worksheet Calculation for the 3-year CECL Transition Provision
Assumptions:
•
•
•
•
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 3-year CECL electing institution has $1.2 million in allowances for credit
losses (ACL), which also equals $1.2 million of 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 DTAs of $42,000 (debit) and a reduction in beginning retained earnings of
$158,000 (debit)
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
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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
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General Instructions for Schedule RC-R, Part I. (cont.)
Example of Application of the 5-Year CECL Transition Provision for Third Quarter 2020
As an example, assume an institution is required under U.S. GAAP to adopt CECL on January 1, 2020.
This institution chose not to delay adoption of CECL for Call Report purposes under the provisions of
Section 4014 of the CARES Act, and elected to use the 5-year 2020 CECL transition provision in the
March 31, 2020, Call Report. This institution’s 5-year 2020 CECL transition period begins on January 1,
2020.
The institution’s December 31, 2019, Call Report reflected the following amounts:
• ALLL: $120
• Temporary Difference DTAs: $20
• Retained earnings: $200
• Eligible credit reserves (advanced approaches institutions only): $110
On January 1, 2020, the institution adopted CECL and reflected the following amounts:
• AACL: $150
• AACL transitional amount = $150 - $120 = $30
(AACL on 1/1/20 – ALLL on 12/31/19)
• Temporary difference DTAs: $30
• DTA transitional amount = $30 - $20 = $10
(DTAs on 1/1/20 – DTAs on 12/31/19)
• Retained earnings: $180
• CECL transitional amount = $200 - $180 = $20
(Retained earnings on 12/31/19 – retained earnings on 1/1/20)
• Eligible credit reserves (advanced approaches institutions only): $140
• Eligible credit reserves transitional amount (advanced approaches institutions only) = $140 - $110
= $30
(Eligible credit reserves on 1/1/20 – eligible credit reserves on 12/31/19)
On September 30, 2020, the institution reflected the following amounts:
• AACL: $170
• Modified AACL transitional amount = ($170-$150)*0.25 + $30 = $35
(AACL on 9/30/20 – AACL on 1/1/20)*0.25 + AACL transitional amount)
• Modified CECL transitional amount = ($170-$150)*0.25 + $20 = $25
(AACL on 9/30/20 – AACL on 1/1/20)*0.25 + CECL transitional amount)
The institution would adjust the following items in its September 30, 2020, Call Report, Schedule RC-R:
•
•
•
Part I, Item 2 (Retained earnings): Add $25 (modified CECL transitional amount)
Part I, Item 15, 15.a, or 15.b, as applicable (temporary difference DTAs): Subtract $10 (DTA
transitional amount) when calculating temporary difference DTAs subject to deduction
Part I, Item 27 (Average total consolidated assets): Add $25 (modified CECL transitional amount)
An institution that is not electing the CBLR framework in its September 30, 2020, Call
Report, would make these additional Schedule RC-R adjustments:
• Part I, Item 42 (Allowances in tier 2 capital): Subtract $35 (modified AACL transitional amount)
• Part II, Item 8 (All other assets): Subtract $10 (DTA transitional amount)
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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 should increase retained earnings 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.
An institution that has adopted ASU 2016-13, and has elected to apply the 5-year 2020 CECL
transition provision (5-year CECL electing institution) should also include in this item its
applicable modified CECL transitional amount in accordance with section 301 of the
regulatory capital rules. Specifically, a 5-year CECL electing institution should increase
retained earnings by 100 percent of its modified CECL transitional amount during the first and
second years of the transition period, 75 percent of its modified CECL transitional amount
during the third year of the transition period, 50 percent of its modified CECL transitional
amount during the fourth year of the transition period, and 25 percent of its modified CECL
transitional amount during the fifth year of the transition period.
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Part I. (cont.)
Item No.
2.a
Caption and Instructions
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 3-year CECL transition provision (a 3year CECL electing institution) or the 5-year 2020 CECL transition provision (a 5-year CECL
electing institution), as described in section 301 of the regulatory capital rules and in the
General Instructions for Schedule RC-R, Part I.
An institution that is required to use CECL for regulatory reporting purposes and intends to
use the 3-year or the 5-year 2020 CECL transition provision must elect to use the 3-year or
the 5-year 2020 CECL transition provision in the first Call Report the institution files that
includes CECL after the institution is required to use CECL for regulatory reporting purposes.
An institution that does not elect to use the 3-year or the 5-year 2020 CECL transition as of
the first Call Report the institution files that includes CECL after the institution is required to
use CECL for regulatory reporting purposes would not be permitted to use the 3-year or the
5-year 2020 CECL transition provision in subsequent reporting periods.1 For example, an
institution that adopts CECL as of January 1, 2020 (i.e., does not delay adoption of CECL
under Section 4014 of the Coronavirus Aid, Relief, and Economic Security Act), records a
reduction in retained earnings due to the adoption of CECL, 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 3-year or the 5-year CECL transition provision in any subsequent
reporting period.
An institution that has adopted CECL and has elected to apply the 3-year CECL transition
provision must enter “1” for “Yes with a 3-year CECL transition election” in item 2.a for each
quarter in which the institution uses the transition provision. An institution that has adopted
CECL and has elected to apply the 5-year 2020 CECL transition provision must enter “2” for
“Yes with a 5-year 2020 CECL transition election” in item 2.a for each quarter in which the
institution uses the transition provision. An institution that has adopted CECL and has elected
not to use a 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 3-year and
5-year 2020 transition periods will have ended for all CECL electing institutions. If an
individual CECL electing institution’s 3-year or 5-year transition period ends before item 2.a is
removed (e.g., its transition 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.
1 An institution that did not make a 5-year 2020 CECL transition provision election because it did not record a
reduction in retained earnings due to the adoption of CECL as of the beginning of the fiscal year in which the
institution adopted CECL may use the 5-year 2020 CECL transition provision if it has a positive modified CECL
transitional amount during any quarter ending in 2020 and makes the election in the Call Report filed for the same
quarter.
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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.
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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 risk-weight category, except for institutions that have a community bank leverage
ratio (CBLR) framework election in effect as of the quarter-end report date. 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.
All institutions must 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 that have a CBLR framework election in effect as of the quarter-end report
date.
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 decrease its DTAs arising from temporary
differences by the applicable DTA transitional amount in accordance with section 301 of the
regulatory capital rules. Specifically, a 3-year CECL electing institution should reduce the
amount of its DTAs arising from temporary differences 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 (see Table 1 in the instructions for Schedule RC
R, Part I, item 2).
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
14
(cont.)
Caption and Instructions
An institution that has adopted ASU 2016-13 and has elected to apply the 5-year 2020 CECL
transition provision (5-year CECL electing institution) should decrease its DTAs arising from
temporary differences by the applicable DTA transitional amount in accordance with section
301 of the regulatory capital rules. Specifically, a 5-year CECL electing institution should
reduce the amount of its DTAs arising from temporary differences by 100 percent of its DTA
transitional amount during the first and second years of the transition period, 75 percent of its
DTA transitional amount during the third year of the transition period, 50 percent of its DTA
transitional amount during the fourth year of the transition period, and 25 percent of its DTA
transitional amount during the fifth year of the transition period (see Example of Application of
the 5-Year 2020 CECL Transition Provision for Second Quarter 2020 in the instructions for
Schedule RC-R, Part I, item 2).
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.
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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.
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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 of the regulatory capital
rules. Specifically, 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).
An institution that has adopted ASU 2016-13 and has elected to apply the 5-year 2020 CECL
transition provision (5-year CECL electing institution) should increase its average total
consolidated assets by its applicable modified CECL transitional amount, in accordance with
section 301 of the regulatory capital rules. Specifically, a 5-year CECL electing institution
should increase its average total consolidated assets as reported on the Call Report for
purposes of the leverage ratio by 100 percent of its modified CECL transitional amount during
the first and second years of the transition period, 75 percent of its modified CECL
transitional amount during the third year of the transition period, 50 percent of its modified
CECL transitional amount during the fourth year of the transition period, and 25 percent of its
modified CECL transitional amount during the fifth year of the transition period (see Example
of Application of the 5-Year 2020 CECL Transition Provision for Second Quarter 2020 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
FFIEC 051
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.
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FFIEC 051
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Part I. (cont.)
Item No.
29
(cont.)
Caption and Instructions
Include as a deduction the quarterly average amount of Paycheck Protection Program (PPP)
loans pledged to the PPP Liquidity Facility (PPPLF). This quarterly average should be
consistent with and calculated using the same averaging method used for calculating the
quarterly average for “Total assets” reported in Schedule RC-K, item 9. Institutions also
should report in Schedule RC-M, item 17.e, the quarterly average amount of PPP loans
pledged to the PPPLF that are included as a deduction in this item 29.
Include as a deduction the quarterly average amount of assets purchased under the Money
Market Mutual Fund Liquidity Facility (MMLF). This quarterly average should be consistent
with and calculated using the same averaging method used for calculating the quarterly
average for “Total assets” reported in Schedule RC-K, item 9. Institutions also should report
in Schedule RC-M, item 18.b, the quarterly average amount of assets purchased under the
MMLF that are included as a deduction in this item 29.
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
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 AACL by the
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 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).
An institution that has adopted ASU 2016-13 and has elected to apply the 5-year 2020 CECL
transition provision (5-year CECL electing institution) should decrease its AACL by the
applicable modified AACL transitional amount in accordance with section 301 of the
regulatory capital rules. Specifically, a 5-year CECL electing institution should reduce the
amount of its AACL by 100 percent of its modified AACL transitional amount during the first
and second years of the transition period, 75 percent of its modified AACL transitional
amount during the third year of the transition period, 50 percent of its modified AACL
transitional amount during the fourth year of the transition period, and 25 percent of its
modified AACL transitional amount during the fifth year of the transition period (see Example
of Application of the 5-Year 2020 CECL Transition Provision for Second Quarter 2020 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
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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 greater of
(1) the reporting institution’s net income for the four preceding calendar quarters, net of any
distributions and associated tax effects not already reflected in net income, and (2) the
average of the reporting institution’s net income over the four preceding calendar quarters.
(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 purposes of this item 53, the four preceding calendar quarters refers to the calendar
quarter ending on the last day of the current reporting period and the three preceding
calendar quarters as illustrated in the example below. The average of an institution’s net
income over the four preceding calendar quarters refers to the average of three-month net
income for the calendar quarter ending on the last day of the current reporting period and the
three-month net income for the three preceding calendar quarters as illustrated in the
example below.
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Part I. (cont.)
Item No.
Caption and Instructions
53
Example and a worksheet calculation:
(cont.)
Assumptions:
•
•
Eligible retained income is calculated for the Call Report date of March 31, 2020.
The institution reported the following on its Call Reports in Schedule RI, Income Statement, item
14, “Net income (loss) attributable to bank (item 12 minus item 13)”:
Call Report Date
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
•
Amount Reported in
Item 14
$400 (A)
$900 (B)
$1,500 (C)
$1,900 (D)
$200 (E)
Three-Month Net
Income
$400
$500 (B-A)
$600 (C-B)
$400 (D-C)
$200 (E)
The 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) in this example are $400 in each of the four preceding calendar quarters.
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Net Income
$500
$600
$400
$200
Adjustments for
($400)
($400)
($400)
($400)
distributions and
associated tax effects
not already reflected
in net income
Adjusted Net Income
$100
$200
$0
($200)
(Net Income –
Adjustments)
(1)
(2)
(3)
Calculate an institution’s net income for the four preceding calendar
quarters, net of any distributions and associated tax effects not already
reflected in net income.
Calculate the average of an institution’s three-month net income over the
four preceding calendar quarters.
Take the greater of step (1) and step (2) and report the amount in Schedule
RC-R, Part I, item 53.
$100 + $200
+ $0 + ($200)
= $100
($500 + $600
+ $400 +
$200) / 4 =
$425*
$425
*From a practical perspective, an institution may use the year-to-date net income reflected in Schedule
RI for December 31, 2019; subtract from it the net income reflected in Schedule RI, item 14, for March 31,
2019; and then add the net income in Schedule RI, item 14, for March 31, 2020, to calculate the
numerator in step 2, above. For the example above, the average of an institution’s three-month net
income over the four preceding calendar quarters would be: ($1,900 (D) less $400 (A) plus $200 (E))
divided by 4 = $425.
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Part I. (cont.)
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
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 meet the applicable leverage ratio requirement under
the CBLR framework or fails to meet any of the other CBLR 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.)
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;
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. and’
o The amount of negotiable certificates of deposit purchased through the Money
Market Mutual Fund Liquidity Facility
•
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. Also include the exposure amount of
HTM debt securities purchased through the Money Market Mutual Fund Liquidity Facility.
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.
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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. Also include the exposure amount of AFS
debt securities purchased through the Money Market Mutual Fund Liquidity Facility.
Include the exposure amounts of those debt securities reported in Schedule RC-B,
column C, that do not qualify as securitization
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FFIEC 051
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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.
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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 (1) solely pursuant to the U.S. Treasury’s Home Affordable Mortgage
Program (HAMP)) or (2) consistent with the agencies’ April 7, 2020, interagency
statement1, solely due to short-term modifications of 1-4 family residential mortgages
made on a good faith basis in response to the Coronavirus Disease 2019 (COVID-19),
provided that the loans are prudently underwritten and not 90 days or more past due or
carried in nonaccrual status). 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.
1
As discussed in the April 7, 2020, Interagency Statement on Loan Modifications and Reporting for Financial
Institutions Working with Customers Affected by the Coronavirus (Revised), Section 4013 of the Coronavirus Aid,
Relief, and Economic Security Act provides financial institutions the option to temporarily suspend certain
requirements under U.S. generally accepted accounting principles related to troubled debt restructurings for a limited
period of time to account for the effects of COVID-19.
FFIEC 051
RC-R-65
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.a
(cont.)
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 (1) solely
pursuant to the U.S. Treasury’s HAMP) or (2) solely due to a short-term modification
made on a good faith basis in response to COVID-19, provided that the loan is
prudently underwritten and not 90 days or more past due or carried in nonaccrual
status).
○ 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.
FFIEC 051
•
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
(3-21)
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
(3-21)
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 U.S. Small Business Administration
Paycheck Protection Program loans and the portion of loans and leases HFS
collateralized by deposits at the reporting institution.
RC-R-68
(3-21)
RC-R – REGULATORY CAPITAL
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 U.S.
Small Business Administration Paycheck Protection Program loans and 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
(3-21)
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
(3-21)
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 (1) solely pursuant to the U.S. Treasury’s Home Affordable Mortgage
Program (HAMP)) or (2) consistent with the agencies’ April 7, 2020, interagency
statement1, solely due to short-term modifications of 1-4 family residential mortgages
made on a good faith basis in response to the Coronavirus Disease 2019 (COVID-19),
provided that the loans are prudently underwritten and not 90 days or more past due or
carried in nonaccrual status). 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.
1
As discussed in the April 7, 2020, Interagency Statement on Loan Modifications and Reporting for Financial
Institutions Working with Customers Affected by the Coronavirus (Revised), Section 4013 of the Coronavirus Aid,
Relief, and Economic Security Act provides financial institutions the option to temporarily suspend certain
requirements under U.S. generally accepted accounting principles related to troubled debt restructurings for a limited
period of time to account for the effects of COVID-19.
FFIEC 051
RC-R-71
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
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 (1) solely
pursuant to the U.S. Treasury’s HAMP) or (2) solely due to a short-term modification
made on a good faith basis in response to COVID-19, provided that the loan is
prudently underwritten and not 90 days or more past due or carried in nonaccrual
status).
○ 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.
FFIEC 051
•
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.
RC-R-72
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 051
5.b
1
RC-R – REGULATORY CAPITAL
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
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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 U.S. Small Business Administration
Paycheck Protection Program loans and the portion of loans and leases HFI
collateralized by deposits at the reporting institution.
RC-R-73
(3-21)
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 U.S. Small Business Administration Paycheck Protection Program
loans and the portion of loans and leases HFI collateralized by deposits at the reporting
institution.
RC-R-74
(3-21)
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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 Include the fair value of assets purchased through the Money Market Mutual Fund
Liquidity Facility that are held for trading.
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 zero percent risk weight. This
would include U.S. Small Business Administration Paycheck Protection Program
loans held for trading and the portion of trading assets collateralized by deposits at
the reporting institution.
•
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.
RC-R-77
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
o
7
(cont.)
8
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.
•
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.
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
(3-21)
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
(3-21)
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FFIEC 051
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
8
(cont.)
Caption and Instructions
○
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 the amount by which it has decreased its DTAs arising from temporary differences for
its applicable DTA transitional amount 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.
An institution that has adopted CECL and has elected to apply the 5-year 2020 CECL
transition provision (5-year CECL electing institution) should report as a positive number
in column B the amount by which it has decreased its DTAs arising from temporary
differences for its applicable DTA transitional amount in accordance with section 301 of
the regulatory capital rules. Specifically, a 5-year CECL electing institution reduces its
temporary difference DTAs by 100 percent of its DTA transitional amount during the first
and second years of the transition period, 75 percent of its DTA transitional amount
during the third year of the transition period, 50 percent of its DTA transitional amount
during the fourth year of the transition period, and 25 percent of its DTA transitional
amount during the fifth year of the transition period.
FFIEC 051
RC-R-80
(3-21)
RC-R – REGULATORY CAPITAL
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
(3-21)
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. All assumptions related to expected recoveries
should be appropriately documented and supported. When estimating expected recoveries,
management may conclude that amounts previously charged off are not collectible.
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
(3-21)
GLOSSARY
FFIEC 051
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 – Deposits defined in Regulation D as transaction
accounts include demand deposits, NOW accounts, telephone and preauthorized transfer
accounts, and savings deposits. However, for Call Report purposes, savings deposits are
classified as a type of nontransaction account.
For institutions that have suspended the six transfer limit on an account that meets the definition
of a savings deposit (as defined below in the Nontransaction accounts category), please refer to
the “Treatment of Accounts where Reporting Institutions Have Suspended Enforcement of the Six
Transfer Limit per Regulation D” section below for further details on reporting savings deposits.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
(1) Transaction accounts – For Call Report purposes, with the exceptions noted below, 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 (ATM), a remote service unit
(RSU), or another electronic device, including by debit card.
Excluded from transaction accounts are savings deposits (both money market deposit
accounts (MMDAs) and other savings deposits) as defined below in the nontransaction
account category.
For Call Report purposes, 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.
(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, and (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.
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
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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: Regulation D classifies savings deposits as a type of transaction account. However,
for Call Report purposes, savings deposits are classified as a type of nontransaction account.
(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.
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.
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GLOSSARY
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GLOSSARY
Deposits (cont.):
Treatment of Accounts where Reporting Institutions Have Suspended Enforcement of
the Six Transfer Limit per Regulation D
Where the reporting institution has suspended the enforcement of the six transfer limit
rule on an account that meets the definition of a savings deposit, the reporting institution
is required to report such deposits as a savings account or a transaction account based
on an assessment of the characteristics of the account as indicated below:
1)
If the reporting institution does not retain the reservation of right to require at least seven
days' written notice before an intended withdrawal, report the account as a demand
deposit (and as a "transaction account").
2)
If the reporting institution does retain the reservation of right to require at least seven
days' written notice before an intended withdrawal, report the account as either a NOW 1
account (and as a "transaction account") or as a savings deposit (and as a
nontransaction 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 unlimited 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.
1
The option to report as a NOW account (and a transaction account) is only applicable to institutions that offer
NOW accounts and the account offered subsequent to the suspension of the enforcement of the six-transfer limit
is equivalent to the reporting institution’s NOW account offering and is held by eligible depositors as authorized by
federal law. Institutions that do not offer NOW accounts should continue to report such deposits as a savings
deposit (and as a nontransaction account).
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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
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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 –
When a depository institution establishes a retail sweep program, the depository institution
must ensure that its customer account agreements provide for the existence of two distinct
accounts rather than a single account and the funds are actually transferred between these two
accounts as described in the customer contract.
There are two key criteria for retail sweep programs:
(1) A depository institution must establish by agreement with its customer two legally
separate accounts;
(2) The swept funds must actually be moved between the customer’s two accounts 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
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.
Further, for purposes of the Consolidated Reports of Condition and Income, if both 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.
FFIEC 051
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GLOSSARY
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GLOSSARY
Deposits (cont.):
(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 unlimited, "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 unlimited "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
FFIEC 051
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GLOSSARY
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GLOSSARY
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 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.
FFIEC 051
A-50
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GLOSSARY
FFIEC 051
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."
FFIEC 051
A-75
(3-21)
GLOSSARY
FFIEC 051
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 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, column C.
(2) For an institution that has not adopted FASB Accounting Standards Update No. 2016-13
(ASU 2016-13), which governs the accounting for credit losses, 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, are met for a purchased credit-impaired (PCI)
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 PCI 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."
FFIEC 051
A-76
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GLOSSARY
Nonaccrual Status (cont.):
(3) For an institution that has adopted ASU 2016-13, the following criteria are met for a purchased
credit-deteriorated (PCD) asset, including a PCD asset that was previously a PCI asset or part of a
pool of PCI loans, that would otherwise be required to be placed in nonaccrual status under the
general rule:
(a) The institution reasonably estimates the timing and amounts of cash flows expected to be
collected, and
(b) The institution did not acquire the asset primarily for the rewards of ownership of the underlying
collateral, such as use of collateral in operations of the institution or improving the collateral for
resale.
When a PCD asset that meets the criteria above is not placed in nonaccrual status, the asset should
be subject to other alternative methods of evaluation to ensure that the institution’s net income is not
materially overstated. If an institution is required or has elected to carry a PCD asset in nonaccrual
status, the asset must be reported as a nonaccrual asset at its amortized cost basis in Schedule RC-N,
column C. (For PCD loans for which the institution has made a policy election to maintain previously
existing pools of PCI loans upon adoption of ASU 2016-13, the determination of nonaccrual or accrual
status should be made at the pool level, not the individual asset level.) For further information, see the
Glossary entry for “purchased credit-deteriorated assets.”
FFIEC 051
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GLOSSARY
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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 PCI loan, pool of loans, or debt security that is accounted for in accordance with ASC
Subtopic 310-30 (or when a PCD asset that is accounted for in accordance with ASC Subtopic 326-20, if the
institution has adopted ASC Topic 326) has been placed in nonaccrual status, the cost recovery method should be
used, when appropriate.
FFIEC 051
A-77
(3-21)
GLOSSARY
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:
(1) The asset has been formally restructured and qualifies for accrual status as discussed below;
(2) For an institution that has not adopted ASU 2016-13, the asset is a PCI 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;
(3) For an institution that has adopted ASU 2016-13, the asset is a PCD asset and it meets the two
criteria specified in the third exception to the general rule discussed above; or
(4) 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.
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.
FFIEC 051
A-78
(3-21)
GLOSSARY
FFIEC 051
GLOSSARY
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 PCI loan 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
in 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. In contrast, regardless of
whether a PCD asset is in nonaccrual or accrual status, an institution is not permitted to accrete the
credit-related discount embedded in the purchase price of the asset that is attributable to the acquirer’s
assessment of expected credit losses as of the date of acquisition (i.e., the contractual cash flows the
acquirer did not expect to collect at acquisition). In addition, interest income should no longer be
recognized on a PCD asset to the extent that the net investment in the asset would increase to an
amount greater than the payoff amount.
ASC Subtopic 310-10, Receivables – Overall, does not prohibit an institution from placing a PCD asset
in nonaccrual status. Because a PCD asset is an acquired financial asset that, at acquisition, has
experienced a more-than-insignificant deterioration in credit quality since origination, as determined by
an acquiring institution’s assessment, the acquiring institution must determine upon acquisition whether
it is appropriate to place the PCD asset in accrual status, including accreting the noncredit discount or
premium.
For purposes of these reports, if an institution has a PCD asset, including a PCD asset that was
previously a PCI asset or part of a pool of PCI loans, that would otherwise be required to be placed in
nonaccrual status (see the Glossary entry for “nonaccrual status”), the institution may elect to accrue
interest income on the PCD asset and not report the PCD asset as being in nonaccrual status if the
following criteria are met:
(a) The institution reasonably estimates the timing and amounts of cash flows expected to be collected,
and
(b) The institution did not acquire the asset primarily for the rewards of ownership of the underlying
collateral, such as use of collateral in operations of the institution or improving the collateral for
resale.
When a PCD asset that meets the criteria above is not placed in nonaccrual status, the asset should
be subject to other alternative methods of evaluation to ensure that the institution’s net income is not
materially overstated. If an institution is required or has elected to carry a PCD asset in nonaccrual
status, the asset must be reported as a nonaccrual asset at its amortized cost basis (fair value for a
PCD available-for-sale debt security) in Schedule RC-N, column C.
For PCD assets for which the institution has made a policy election to maintain previously existing
pools of PCI loans upon adoption of ASU 2016-13, the determination of nonaccrual or accrual status
should be made at the pool level, not the individual asset level.
FFIEC 051
A-83
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GLOSSARY
FFIEC 051
GLOSSARY
Purchased Credit-Deteriorated Assets (cont.):
For a PCD asset that is not reported in nonaccrual status, the delinquency status of the PCD asset
should be determined in accordance with its contractual repayment terms for purposes of reporting the
amortized cost basis of the asset (fair value for a PCD available-for-sale debt security) as past due in
Schedule RC-N, column A or B, as appropriate. If the PCD asset that is not reported in nonaccrual
status consists of a pool of loans that was previously PCI, but is being maintained as a unit of account
after the adoption of ASU 2016-13, delinquency status should be determined individually for each loan
in the pool in accordance with the individual loan’s contractual repayment terms.
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
FFIEC 051
A-84
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GLOSSARY
FFIEC 051
GLOSSARY
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.”
FFIEC 051
A-84a
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GLOSSARY
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| File Type | application/pdf |
| File Modified | 2021-04-16 |
| File Created | 2021-04-15 |