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pdfFFIEC 031 AND FFIEC 041
CALL REPORT
INSTRUCTION BOOK UPDATE
MARCH 2021
.
FILING INSTRUCTIONS
NOTE: This update for the instruction book for the FFIEC 031 and FFIEC 041 Call Reports 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
(FFIEC 031 and FFIEC 041) 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 031 and FFIEC 041 Call Reports.
Remove Pages
Insert Pages
Cover Page (12-20)
RI-8a – RI-8c (3-19)
RI-11 – RI-12 (9-16)
RI-23 – RI-24 (12-20)
RI-B-9 – RI-B-10 (3-19)
RI-B-13 – RI-B-14 (3-19)
RI-D-1 – RI-D-2 (12-20)
RC-C-33 – RC-C-34 (6-18)
None
RC-E-3 – RC-E-6 (9-09, 12-18, 9-20)
RC-M-1 – RC-M-2 (3-20)
RC-M-21 – RC-M-26 (6-14)
RC-N-1 – N-4a (3-19)
RC-R-1 – RC-R-6 (6-20, 12-20)
RC-R-13 – RC-R-16 (3-20, 6-20)
RC-R-23 – RC-R-24 (6-20)
RC-R-39 – RC-R-42 (12-20)
RC-R-49 – RC-R-50 (12-20)
RC-R-57 – RC-R-62 (6-20, 12-20)
RC-R-85 – RC-R-88 (3-20, 6-20)
RC-R-93 – RC-R-94 (12-20)
RC-R-99 – RC-R-114 (3-20, 6-20)
RC-R-119 – RC-R-122 (6-20)
A-7 – A-8 (9-20)
A-33 – A-40 (9-20)
A-59 – A-60 (9-20)
A-93 – A-96 (9-20)
A-101 – A-102 (9-20)
Cover Page (3-21)
RI-8a – RI-8c (3-21)
RI-11 – RI-12 (3-21)
RI-23 – RI-24 (3-21)
RI-B-9 – RI-B-10 (3-21)
RI-B-13 – RI-B-14 (3-21)
RI-D-1 – RI-D-2 (3-21)
RC-C-33 – RC-C-34 (3-21)
RC-C-37– RC-C-38 (3-21)
RC-E-3 – RC-E-6 (3-21)
RC-M-1 – RC-M-2 (3-21)
RC-M-21 – RC-M-26 (3-21)
RC-N-1 – RC-N-4a (3-21)
RC-R-1 – RC-R-6 (3-21)
RC-R-13 – RC-R-16 (3-21)
RC-R-23 – RC-R-24a (3-21)
RC-R-39 – RC-R-42 (3-21)
RC-R-49 – RC-R-50 (3-21)
RC-R-57 – RC-R-62 (3-21)
RC-R-85 – RC-R-88 (3-21)
RC-R-93 – RC-R-94 (3-21)
RC-R-99 – RC-R-114 (3-21)
RC-R-119 – RC-R-122 (3-21)
A-7 – A-8 (3-21)
A-33 – A-40 (3-21)
A-59 – A-60 (3-21)
A-93 – A-96 (3-21)
A-101 – A-102a (3-21)
(3-21)
Instructions for Preparation of
Consolidated Reports of Condition and Income
FFIEC 031 and FFIEC 041
Updated March 2021
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FFIEC 031 and 041
RI - INCOME STATEMENT
FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-
2.a.(1)
Interest on deposits in domestic offices:
2.a.(1)
2.a.(1)(a)
Interest on transaction accounts. Report interest expense on all
interest-bearing transaction accounts (interest-bearing demand deposits, NOW
accounts, ATS accounts, and telephone and preauthorized transfer accounts)
reportable in Schedule RC-E, (part I,) items 1 through 6, column A, "Total
transaction accounts." Exclude all costs incurred by the bank in connection with
noninterest-bearing demand deposits. See the Glossary entry for "deposits" for
the definitions of “interest-bearing deposit accounts,” “demand deposits,” "NOW
accounts," "ATS accounts," and "telephone or preauthorized transfer accounts."
2.a.(2)
2.a.(1)(b)
Interest on nontransaction accounts. Report in the appropriate subitem
interest expense on all deposits reportable in Schedule RC-E, (part I,) items 1
through 6, column C, "Total nontransaction accounts."
2.a.(2)(a)
2.a.(2)(b)(1)Interest on savings deposits. Report interest expense on all deposits
reportable in Schedule RC-E, (Part I,) Memorandum item 2.a.(1), "Money market
deposit accounts (MMDAs),” and Memorandum item 2.a.(2), "Other savings
deposits."
2.a.(2)(b)
2.a.(1)(b)(2)Interest on time deposits of $250,000 or less. Report interest expense on all
deposits reportable in Schedule RC-E, (Part I,) Memorandum item 2.b, "Total
time deposits of less than $100,000," and Memorandum item 2.c, "Total time
deposits of $100,000 through $250,000.”
2.a.(2)(c)
2.a.(1)(b)(3)Interest on time deposits of more than $250,000. Report interest expense on
all deposits reportable in Schedule RC-E, (Part I,) Memorandum item 2.d, "Total
time deposits of more than $250,000."
-
2.a.(2)
Interest on deposits in foreign offices, Edge and Agreement subsidiaries,
and IBFs. Report interest expense on all deposits in foreign offices reportable in
Schedule RC, item 13.b.(2), "Interest-bearing deposits in foreign offices, Edge
and Agreement subsidiaries, and IBFs."
FFIEC 031 and 041
Item No. Caption and Instructions
2.b
Expense of federal funds purchased and securities sold under agreements to
repurchase. Report the gross expense of all liabilities reportable in Schedule RC, item 14,
"Federal funds purchased and securities sold under agreements to repurchase." Include
interest expense incurred on federal funds purchased and securities sold under agreements
to repurchase that are reported at fair value under a fair value option.
Report the income of federal funds sold and securities purchased under agreements to
resell in Schedule RI, item 1.f; do not deduct from the gross expense reported in this item.
However, if amounts recognized as payables under repurchase agreements have been
offset against amounts recognized as receivables under reverse repurchase agreements
and reported as a net amount in Schedule RC, Balance Sheet, in accordance with ASC
Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41,
“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase
Agreements”), the income and expense from these agreements may be reported on a net
basis in Schedule RI, Income Statement.
FFIEC 031 and 041
RI-8a
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
Item No.
2.c
RI - INCOME STATEMENT
Caption and Instructions
Interest on trading liabilities and other borrowed money. Report the interest expense
on all liabilities reportable in Schedule RC, item 15, "Trading liabilities," and item 16, "Other
borrowed money." Include interest expense incurred on other borrowed money reported at
fair value under a fair value option.
Include amortization of debt issuance costs associated with other borrowed money (unless
the borrowed money is reported at fair value under a fair value option, in which case issuance
costs should be expensed as incurred).
2.d
Interest on subordinated notes and debentures. Report the interest expense on all
liabilities reportable in Schedule RC, item 19, "Subordinated notes and debentures." Include
interest expense incurred on subordinated notes and debentures reported at fair value under
a fair value option.
Include amortization of debt issuance costs associated with subordinated notes and
debentures (unless the notes and debentures 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.e
Total interest expense. Report the sum of Schedule RI, items 2.a through 2.d.
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 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. 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. 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
FFIEC 031 and 041
RI-8b
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
RI - INCOME STATEMENT
Item No.
Caption and Instructions
4
(cont.)
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 031 and 041
RI-8c
(3-21)
RI - INCOME STATEMENT
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FFIEC 031 and 041
Item No.
RI - INCOME STATEMENT
Caption and Instructions
5.d
Income from securities-related and insurance activities. For items 5.d.(1) through
5.d.(5) 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 securitiesrelated 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. 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 item 5.c, “Trading revenue”). 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.(3),
“Fees and commissions from annuity sales”).
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 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)
Investment banking, advisory, and underwriting fees and commissions. Report fees and
commissions from underwriting (or participating in the underwriting of) securities, private
placements of securities, investment advisory and management services, merger and
acquisition services, and other related consulting fees. Include fees and commissions from
the placement of commercial paper, both for transactions issued in the bank's name and
transactions in which the bank acts as an agent for a third party issuer.
Also include the bank’s proportionate share of the income or loss before discontinued
operations from its investments in equity method investees that are principally engaged in
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.(3)
Fees and commissions from annuity sales. 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 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. 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.
FFIEC 031 and 041
RI-11
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
RI - INCOME STATEMENT
Item No.
Caption and Instructions
5.d.(4)
Underwriting income from insurance and reinsurance activities. 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.
5.d.(4)
(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
insurance underwriting or reinsurance 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.
Exclude income from sales and referrals involving insurance products and annuities (see the
instructions for Schedule RI, items 5.d.(5) and 5.d.(3), respectively, for information on
reporting such income).
5.d.(5)
Income from other insurance activities. 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.
Exclude income from annuity sales and referrals (see the instructions for Schedule RI,
item 5.d.(3), above, for information on reporting such income).
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
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
Venture capital revenue. In general, venture capital activities involve the providing of
funds, whether in the form of loans or equity, and technical and management assistance,
when needed and requested, to start-up or high-risk companies specializing in new
technologies, ideas, products, or processes. The primary objective of these investments is
capital growth.
Report as venture capital revenue market value adjustments, interest, dividends, gains, and
losses (including impairment losses) on venture capital investments (loans and securities).
Include any fee income from venture capital activities that is not reported in one of the
preceding items of Schedule RI, Income Statement.
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
venture capital 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.
FFIEC 031 and 041
RI-12
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
Item No.
RI - INCOME STATEMENT
Caption and Instructions
7.d
(cont.)
in the current or future periods when the “fee reduction” or “fee waiver” takes place.
(See the example after the instructions to Schedule RC-T, Memorandum item 4.e.)
For institutions required to complete Schedule RC-T, item 24, the amount of net losses
from fiduciary and related services also is reported in that item.
(26) Losses from robberies, defalcations, and other criminal acts not covered by the bank's
blanket bond.
(27) Travel and entertainment expenses, including costs incurred by bank officers and
employees for attending meetings and conventions.
(28) Dues, fees, and other expenses associated with memberships in country clubs, social
or private clubs, civic organizations, and similar clubs and organizations.
(29) Civil money penalties and fines.
(30) All service charges, commissions, and fees levied by others for the repossession of
assets and the collection of the bank's loans or other assets, including charged-off
loans or other charged-off assets.
(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.)
FFIEC 031 and 041
RI-23
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
RI - INCOME STATEMENT
Item No.
Caption and Instructions
7.d
(cont.)
(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.d, "Interest on subordinated notes and debentures"). For further information, see
the Glossary entry for “Debt issuance costs.”
(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.
FFIEC 031 and 041
RI-24
(3-21)
RI - INCOME STATEMENT
FFIEC 031 and 041
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
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.
FFIEC 031 and 041
RI-B-9
(3-21)
RI-B - ALLOWANCE
FFIEC 031 and 041
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 031 and 041
RI-B-10
(3-21)
RI-B - ALLOWANCE
FFIEC 031 and 041
RI-B - ALLOWANCE
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
3
(cont.)
An institution that has adopted ASU 2016-13 should report in this item the amount of the
allowance for credit losses on loans and leases that is attributable to outstanding fees and
finance charges on credit cards (as defined for Schedule RC-C, part I, item 6.a). This
amount is a component of the amount reported in Schedule RC, item 4.c, and Schedule RI-B,
part II, item 7, column A.
Do not include in this item the amount of any valuation allowance established for impairment
in retained interests in accrued interest receivable related to securitized credit cards.
NOTE: Memorandum item 4 is to be completed only by institutions that have not adopted FASB
Accounting Standards Update No. 2016-13 (ASU 2016-13), which governs the accounting for credit
losses. Institutions that have adopted ASU 2016-13 should leave Memorandum item 4 blank.
4
Amount of allowance for post-acquisition credit losses on purchased credit-impaired
loans accounted for in accordance with FASB ASC 310-30 (former AICPA Statement of
Position 03-3). Report in this item the amount of any valuation allowances established after
acquisition for decreases in cash flows expected to be collected on purchased credit-impaired
loans and pools of purchased credit-impaired loans reported as held for investment in
Schedule RC, item 4.b, and accounted for in accordance with ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly
AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired
in a Transfer”). These post-acquisition allowances should be included in the bank's
allowance for loan and lease losses as reported in Schedule RC, item 4.c, and
Schedule RI-B, part II, item 7. Under ASC Subtopic 310-30, for a purchased credit-impaired
loan accounted for individually (and not accounted for as a debt security), if, upon evaluation
subsequent to acquisition, it is probable based on current information and events that an
institution will be unable to collect all cash flows expected at acquisition (plus additional cash
flows expected to be collected arising from changes in estimate after acquisition), the
purchased credit-impaired loan should be considered impaired for purposes of establishing
an allowance pursuant to ASC Subtopic 450-20, Contingencies – Loss Contingencies
(formerly FASB Statement No. 5, “Accounting for Contingencies”) or ASC Topic 310,
Receivables (formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a
Loan”), as appropriate. For purchased credit-impaired loans with common risk characteristics
that are aggregated and accounted for as a pool, this impairment analysis should be
performed subsequent to acquisition at the pool level as a whole and not at the individual
loan level.
NOTE: Memorandum item 5 is to be completed only by institutions that have adopted FASB Accounting
Standards Update No. 2016-13, which governs the accounting for credit losses. Institutions that have not
adopted ASU 2016-13 should leave Memorandum item 5 blank.
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.
FFIEC 031 and 041
RI-B-13
(3-21)
RI-B - ALLOWANCE
FFIEC 031 and 041
RI-B - ALLOWANCE
Part II. (cont.)
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum items 6, 7, and 8 are to be completed only by institutions that have adopted FASB
Accounting Standards Update No. 2016-13, which governs the accounting for credit losses. Institutions
that have not adopted ASU 2016-13 should leave Memorandum items 6, 7, and 8 blank.
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
8
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 off-balance-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.
Estimated amount of expected recoveries of amounts previously written off included
within the allowance for credit losses on loans and leases held for investment
(included in item 7, column A, “Balance end of current period”, above). Report in this
item the estimated amount of expected recoveries of amounts previously written off 1 included
within the allowance for credit losses on loans and leases held for investment. This item
applies to loans and leases held for investment, including purchased credit-deteriorated
loans held for investment, and does not apply to held-to-maturity debt securities or availablefor-sale-debt securities.
Expected recoveries of amounts previously written off and expected to be written off shall be
included in the allowance for credit losses and shall not exceed the aggregate of amounts
previously written off and expected to be written off by an institution. However, exclude from
this item the estimated amount of expected recoveries of amounts expected to be written off
included in the allowance for credit losses.
In accordance with ASU 2016-13, estimated expected recoveries are a component of
management’s estimation of the net amount expected to be collected for a financial asset or
a pool of financial assets. If an institution can support an estimate of expected recoveries for
a pool of unsecured loans, each of which was deemed uncollectible and fully written off on an
individual asset basis, the institution reduces the allowance for credit losses by the
institution’s estimate of recoveries expected on a pool basis.
1
The term “written off” as used in ASU 2016-13 and in the instructions for this item is used interchangeably with the
term “charged off,” which is used elsewhere in the Call Report instructions.
FFIEC 031 and 041
RI-B-14
(3-21)
RI-B - ALLOWANCE
FFIEC 031
RI-D – FOREIGN OFFICE INCOME
SCHEDULE RI-D – INCOME FROM FOREIGN OFFICES
General Instructions
Schedule RI-D is applicable only to certain banks that file the FFIEC 031 report forms.
Banks with foreign offices are required to complete this schedule if (1) their foreign office assets are
$10 billion or more and (2) their foreign office assets, revenues, or net income account for more than
10 percent of the bank’s consolidated total assets, total revenues, or net income; otherwise, banks need
not complete this schedule. Banks should use foreign office and consolidated total revenues (net interest
income plus noninterest income) and net income from the preceding calendar year and foreign office and
consolidated total assets as of the preceding calendar year end when determining whether they exceed
the $10 billion foreign office asset-size threshold and the 10 percent threshold for completing this
schedule each quarter during the next calendar year.
For purposes of these reports, a foreign office of the reporting bank is a branch or consolidated subsidiary
located in a foreign country; an Edge or Agreement subsidiary, including both its U.S. and its foreign
offices; or an IBF. In addition, if the reporting bank is chartered and headquartered in the 50 states of the
United States and the District of Columbia, a branch or consolidated subsidiary located in Puerto Rico or
a U.S. territory or possession is a foreign office. Branches on U.S. military facilities wherever located are
treated as domestic offices, not foreign offices.
Banks that are required to complete Schedule RI-D should report all income and expense in foreign
offices and related amounts for the calendar year-to-date. Amounts should be reported in this schedule
(except items 7, 11, and 12) on a foreign office consolidated basis, i.e., before eliminating the effects of
transactions with domestic offices, but after eliminating the effects of transactions between foreign offices.
For the most part, the income and expense items in Schedule RI-D mirror categories of income and
expense reported in Schedule RI. Therefore, where appropriate, banks should refer to the instructions for
Schedule RI for the definitions of the income and expense items in this schedule.
Item Instructions
Item No.
Caption and Instructions
1
Total interest income in foreign offices. Report total interest income (as defined for
Schedule RI, item 1.h) in foreign offices, including fees and similar charges associated with
foreign office assets.
2
Total interest expense in foreign offices. Report total interest expense (as defined for
Schedule RI, item 2.e) on deposits, borrowings, and other liabilities in foreign offices.
3
Provision for loan and lease losses in foreign offices. 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 provision for loan and lease losses (as defined
for Schedule RI, item 4) in foreign offices. Institutions that have adopted ASU 2016-13
should report the provision for credit losses (as defined for Schedule RI, item 4) in foreign
offices for all financial assets and off-balance-sheet credit exposures that fall within the scope
of the standard. If the amount to be reported in this item is negative, report it with a minus (-)
sign.
4
Noninterest income in foreign offices:
4.a
Trading revenue. Report trading revenue (as defined for Schedule RI, item 5.c) in foreign
offices, including the net gain or loss from trading cash instruments and derivative contracts
(including commodity contracts), related revaluation adjustments, and incidental income that
has been recognized in foreign offices. If the amount to be reported in this item is a net loss,
report it with a minus (-) sign.
FFIEC 031
RI-D-1
(3-21)
RI-D – FOREIGN OFFICE INCOME
FFIEC 031
Item No.
RI-D – FOREIGN OFFICE INCOME
Caption and Instructions
4.b
Investment banking, advisory, brokerage, and underwriting fees and commissions.
Report investment banking, advisory, brokerage and underwriting fees and commissions
(as defined for Schedule RI, items 5.d.(1) and 5.d.(2)) in foreign offices.
4.c
Net securitization income. Report net securitization income (as defined for Schedule RI,
item 5.g) in foreign offices. If the amount to be reported in this item is a net loss, report it with
a minus (-) sign.
4.d
Other noninterest income. Report all other noninterest income (as defined for Schedule RI,
items 5.a, 5.b, 5.d.(3), 5.d.(4), 5.d.(5), 5.e, 5.f, and 5.i through 5.l) in foreign offices. If the
amount to be reported in this item is negative, report it with a minus (-) sign.
5
Realized gains (losses) on held-to-maturity and available-for-sale debt securities and
change in net unrealized gains (losses) on equity securities not held for trading in
foreign offices. Report realized gains (losses) on held-to-maturity and available-for-sale
debt securities (as defined for Schedule RI, items 6.a and 6.b) in foreign offices.
Also include the amount of realized and unrealized gains (losses) (and all other value
changes) during the year-to-date reporting period on equity securities and other equity
investments in foreign offices not held for trading that are included in Schedule RI, item 8.b.
If the amount to be reported in this item is a net loss, report it with a minus (-) sign.
6
Total noninterest expense in foreign offices. Report total noninterest expense (as defined
for Schedule RI, item 7.e) in foreign offices.
7
Adjustments to pretax income in foreign offices for internal allocations to foreign
offices to reflect the effects of equity capital on overall bank funding costs. Report any
amounts credited to estimated pretax income in foreign offices that reflects management’s
estimate of the effect of equity capital allocable to foreign office operations. Equity capital,
which is interest-free, helps to reduce a bank’s overall funding costs and increase net interest
income.
8
Applicable income taxes (on items 1 through 7). Report the total estimated income tax
expense (as defined for Schedule RI, item 9) applicable to pretax income in foreign offices.
If the amount is a net benefit rather than tax expense, report it with a minus (-) sign.
9
Discontinued operations, net of applicable income taxes, in foreign offices. Report
the results of discontinued operations, net of applicable income taxes (as defined for
Schedule RI, item 11), in foreign offices. If the amount to be reported in this item is a net
loss, report it with a minus (-) sign.
10
Net income attributable to foreign offices before eliminations arising from
consolidation. The amount to be reported in this item generally will be determined by taking
Schedule RI-D, item 1, minus items 2 and 3, plus items 4.a through 4.d, plus item 5, minus
item 6, plus item 7, minus item 8, plus item 9.
11
Not applicable.
FFIEC 031
RI-D-2
(3-21)
RI-D – FOREIGN OFFICE INCOME
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
12.b
Commercial and industrial loans. Report in the appropriate column the specified amounts
for commercial and industrial loans (as defined for Schedule RC-C, part I, item 4) held for
investment that were acquired in a business combination occurring in the current calendar
year.
12.c
Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate column the specified amounts for loans to individuals for household, family,
and other personal expenditures (as defined for Schedule RC-C, part I, item 6) held for
investment that were acquired in a business combination occurring in the current calendar
year.
12.d
All other loans and all leases. Report in the appropriate column the specified amounts
for all other loans and all leases (as defined for Schedule RC-C, part I, items 2, 3, 7 (on the
FFIEC 031 only), 8, 9, and 10) held for investment that were acquired in a business
combination occurring in the current calendar year.
13
Construction, land development, and other land loans (in domestic offices) 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 (in domestic
offices) 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.
Exclude construction loans for which the loan agreement with the borrower does not provide
for the use of interest reserves.
FFIEC 031 and 041
RC-C-33
(3-21)
RC-C - LOANS AND LEASES
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
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, column B) 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), on the FFIEC 041; Schedule RI, item 1.a.(1)(a)(2) on the FFIEC
031). The amount of capitalized interest included in interest income during the quarter should
be reduced by amounts reversed against interest during the quarter.
14
Pledged loans and leases. Report the amount of all loans and leases included in
Schedule RC-C, part I, above that are pledged to secure deposits, repurchase transactions, or
other borrowings (regardless of the balance of the deposits or other liabilities against which the
loans and leases are pledged) or for any other purpose. Include loans and leases that have
been transferred in transactions that are accounted for as secured borrowings with a pledge of
collateral because they do not qualify as sales under ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of 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 (the amounts of which are also reported in
Schedule RC-V, items 1.e and 1.f). 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 (in domestic offices). 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
FFIEC 031 and 041
RC-C-34
(3-21)
RC-C - LOANS AND LEASES
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
16
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.
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.
FFIEC 031 and 041
RC-C-37
(3-21)
RC-C - LOANS AND LEASES
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
17.a
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.
17.b
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.
FFIEC 031 and 041
RC-C-38
(3-21)
RC-C - LOANS AND LEASES
FFIEC 031 and 041
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 031 and 041
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RC-E - DEPOSITS
FFIEC 031 and 041
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.
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RC-E - DEPOSITS
FFIEC 031 and 041
RC-E - 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.
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.
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RC-E - DEPOSITS
FFIEC 031 and 041
RC-E - DEPOSITS
Item No.
Caption and Instructions
1
(cont.)
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)
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.
(5) Deposits of trust funds standing to the credit of other banks and all trust funds held or
deposited in any department (except the trust department) of the reporting bank if the
beneficiary is an individual, partnership, or corporation.
(6) Credit balances on credit cards and other revolving credit plans as a result of customer
overpayments.
(7) Deposits of a federal or state court held for the benefit of individuals, partnerships, or
corporations, such as bankruptcy funds and escrow funds.
(8) Deposits of a pension fund held for the benefit of individuals.
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RC-E - DEPOSITS
FFIEC 031 and 041
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,
regardless of the number of executive officers, directors, principal shareholders, and related
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RC-M - MEMORANDA
FFIEC 031 and 041
RC-M - MEMORANDA
Item No.
Caption and Instructions
1.a
(cont.)
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
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
FFIEC 031 and 041
RC-M-2
(3-21)
RC-M - MEMORANDA
FFIEC 031 and 041
Item No.
15
RC-M - MEMORANDA
Caption and Instructions
Qualified Thrift Lender (QTL) test. Items 15.a and 15.b are to be completed by all
savings associations and by those state savings banks and cooperative banks that have
applied and have been permitted, under Section 10(l) of the Home Owners’ Loan Act (HOLA)
(12 U.S.C. 1467a(l)), to be deemed a savings association for purposes of holding company
regulation.
The QTL test has been in place since it was enacted as part of the Competitive Equality
Banking Act of 1987. To be a QTL, a savings association (or a state savings or cooperative
bank that has elected to be treated as a QTL) must either meet the HOLA QTL test (12
U.S.C. 1467a(m)) or the Internal Revenue Service (IRS) Domestic Building and Loan
Association (DBLA) test (26 CFR 301.7701-13A). Under the HOLA QTL test, an institution
must hold “Qualified Thrift Investments” equal to at least 65 percent of its portfolio assets. To
be a QTL under the IRS DBLA test, an institution must meet a “business operations test” and
a “60 percent of assets test.” An institution may use either test to qualify and may switch
from one test to the other. However, the institution must meet the time requirements of the
respective test, which is:
•
•
Nine out of the last 12 months for the HOLA QTL test, and
The taxable year (which may be either a calendar or fiscal year) for the IRS DBLA test.
A savings association (or a state savings or cooperative bank that has elected to be treated
as a QTL) that fails to meet the QTL requirements is subject to certain restrictions, including
limits on activities, branching, and dividends.
15.a
Does the institution use the Home Owners’ Loan Act (HOLA) QTL test or the Internal
Revenue Service Domestic Building and Loan Association (IRS DBLA) test to
determine its QTL compliance? Indicate the test that the reporting institution uses to
determine its compliance with the QTL requirements. For the HOLA QTL test, enter the
number “1”; for the IRS DBLA test, enter the number “2.”
15.b
Has the institution been in compliance with the HOLA QTL test as of each month end
during the quarter or the IRS DBLA test for its most recent taxable year, as applicable?
Indicate whether the reporting institution has been in compliance with the HOLA QTL test as
of each month end during the quarter ending with the report date or the IRS DBLA test for its
most recent taxable year, as applicable. Place an “X” in the box marked “Yes” if the
institution has been in compliance with the applicable test for the specified period.
Otherwise, place an “X” in the box marked “No.”
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(3-21)
RC-M - MEMORANDA
FFIEC 031 and 041
Item No.
RC-M - MEMORANDA
Caption and Instructions
NOTE: Items 16.a and, if appropriate, items 16.b.(1) through 16.b.(3) are to be completed by all
institutions annually in the December report only.
16
International remittance transfers offered to consumers. Report in Schedule RC-M,
item 16.a and, if appropriate, items 16.b.(1) through 16.b.(3), information about international
electronic transfers of funds offered to consumers in the United States that:
(1) Are “remittance transfers” as defined by Subpart B of Regulation E (12 CFR
§ 1005.30(e)), or
(2) Would qualify as “remittance transfers” under Subpart B of Regulation E (12 CFR
§ 1005.30(e)), but are excluded from that definition only because the provider is not
providing those transfers in the normal course of its business. See 12 CFR § 1005.30(f).
For purposes of items 16.a and 16.b.(1) through 16.b.(3), such transfers are referred to as
international remittance transfers.
Under Subpart B of Regulation E, which took effect on October 28, 2013, and was most
recently amended effective July 21, 2020, a ‘‘remittance transfer’’ is an electronic transfer of
funds requested by a sender to a designated recipient that is sent by a remittance transfer
provider. The term applies regardless of whether the sender holds an account with the
remittance transfer provider, and regardless of whether the transaction is also an “electronic
fund transfer,” as defined in Regulation E. See 12 CFR § 1005.30(e).
A “sender” is a consumer in a State who primarily for personal, family, or household purposes
requests a remittance transfer provider to send a remittance transfer to a designated
recipient. See 12 CFR § 1005.30(g).
A “designated recipient” is any person specified by the sender as the authorized recipient of a
remittance transfer to be received at a location in a foreign country. See 12 CFR § 1005.30(c).
A “remittance transfer provider” is any person that provides remittance transfers for a
consumer in the normal course of its business, regardless of whether the consumer holds an
account with such person. See 12 CFR § 1005.30(f).
Examples of “remittance transfers” include the following (see Regulation E, Subpart B,
comment 30(e)-3.i):
(1) Transfers where the sender provides cash or another method of payment to a money
transmitter or financial institution and requests that funds be sent to a specified location
or account in a foreign country.
(2) Consumer wire transfers, where a financial institution executes a payment order upon a
sender’s request to wire money from the sender’s account to a designated recipient.
(3) An addition of funds to a prepaid card by a participant in a prepaid card program, such as
a prepaid card issuer or its agent, that is directly engaged with the sender to add these
funds, where the prepaid card is sent or was previously sent by a participant in the
prepaid card program to a person in a foreign country, even if a person located in a State
(including a sender) retains the ability to withdraw such funds.
(4) International automated clearing house (ACH) transactions sent by the sender’s financial
institution at the sender’s request.
(5) Online bill payments and other electronic transfers that a sender schedules in advance,
including preauthorized remittance transfers, made by the sender’s financial institution at
the sender’s request to a designated recipient.
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(3-21)
RC-M - MEMORANDA
FFIEC 031 and 041
RC-M - MEMORANDA
Item No.
Caption and Instructions
16
(cont.)
Under Subpart B of Regulation E, the term “remittance transfer” does not include, for
example:
(1) Small value transactions, i.e., transfer amounts, as described in 12 CFR
§ 1005.31(b)(1)(i), of $15 or less. See 12 CFR § 1005.30(e)(2)(i).
(2) Securities and commodities transfers that are excluded from the definition of electronic
fund transfer under 12 CFR § 1005.3(c)(4). See 12 CFR § 1005.30(e)(2)(ii).
(3) A consumer’s provision of a debit, credit or prepaid card, directly to a foreign merchant as
payment for goods or services because the issuer is not directly engaged with the sender
to send an electronic transfer of funds to the foreign merchant when the issuer provides
payment to the merchant. See Regulation E, Subpart B, comment 30(e)-3.ii.A.
(4) A consumer’s deposit of funds to a checking or savings account located in a State,
because there has not been a transfer of funds to a designated recipient. See
Regulation E, Subpart B, comment 30(e)-3.ii.B.
(5) Online bill payments and other electronic transfers that senders can schedule in advance,
including preauthorized transfers, made through the website of a merchant located in a
foreign country and via direct provision of a checking account, credit card, debit card or
prepaid card number to the merchant, because the financial institution is not directly
engaged with the sender to send an electronic transfer of funds to the foreign merchant
when the institution provides payment to the merchant. See Regulation E, Subpart B,
comment 30(e)-3.ii.C.
Estimates: For purposes of items 16.a and, if appropriate, items 16.b.(1) through 16.b.(3),
estimates should be based on a reasonable and supportable methodology. Estimated figures
should include only international remittance transfers for which your institution was the provider.
Do not count transfers for which another entity was the provider and your institution sent the
transfer as a correspondent bank or agent for the other provider. An international remittance
transfer should be counted as of the date of the transfer.
16.a
Estimated number of international remittance transfers provided by your institution
during the calendar year ending on the report date. Report the estimated number of
international remittance transfers that your institution provided during the calendar year
ending on the report date. Estimates should be based on a reasonable and supportable
methodology.
NOTE: Items 16.b.(1) through 16.b.(3) are to be completed by institutions that reported 501 or more
international remittance transfers in item 16.a in either or both of the current report or the most recent
prior report in which item 16.a was required to be completed. For the December 31, 2021, report date,
your institution should complete Schedule RC-M, items 16.b.(1) through 16.b.(3), only if it reports 501 or
more international remittance transfers in Schedule RC-M, item 16.a, in the December 31, 2021, Call
Report or if it reported a combined total of 501 or more international remittance transfers in Schedule RCM, item 16.d.(1), in the June 30 and December 31, 2020, Call Reports
16.b
Estimated dollar value of remittance transfers provided by your institution and usage
of regulatory exceptions during the calendar year ending on the report date:
16.b.(1)
Estimated dollar value of international remittance transfers. Report the estimated dollar
value of international remittance transfers that your institution provided during the calendar
year ending on the report date. The dollar value is not required to be estimated in thousands
of dollars. In other words, if an estimate is in the millions of dollars, the institution may report
zeros for the thousands of dollars.
16.b.(2)
Estimated number of international remittance transfers for which your institution
applied the permanent exchange rate exception. Report the estimated number of
international remittance transfers that your institution provided during the calendar year.
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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)
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).
FFIEC 031 and 041
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RC-M - MEMORANDA
FFIEC 031 and 041
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.
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RC-M - MEMORANDA
FFIEC 031 and 041
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 031 and 041
RC-M-26
(3-21)
RC-M - MEMORANDA
FFIEC 031 and 041
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 031 and 041
RC-N-1
(3-21)
RC-N - PAST DUE
FFIEC 031 and 041
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 031 and 041
RC-N-2
(3-21)
RC-N - PAST DUE
FFIEC 031 and 041
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 031 and 041
RC-N-3
(3-21)
RC-N - PAST DUE
FFIEC 031 and 041
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
unsecured and regardless of whether the loan is guaranteed by the government or by others.
FFIEC 031 and 041
RC-N-4
(3-21)
RC-N - PAST DUE
FFIEC 031 and 041
RC-N - PAST DUE
Definitions (cont.)
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 (except for Memorandum item 6) 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 (except for Memorandum item 6 on the FFIEC 031), all loans,
leases, debt securities, and other assets which, subsequent to their restructuring by means of a
modification of terms,
FFIEC 031 and 041
RC-N-4a
(3-21)
RC-N - PAST DUE
This page intentionally left blank.
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
SCHEDULE RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R
The instructions for Schedule RC-R should be read in conjunction with the regulatory capital rules issued
by the primary federal supervisory authority of the reporting bank or saving association (collectively,
banks): for national banks and federal savings associations, 12 CFR Part 3; for state member banks,
12 CFR Part 217; and for state nonmember banks and state savings associations, 12 CFR Part 324.
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
RC-R-2
RC-R-2
RC-R-2b
Advanced Approaches Institutions
RC-R-3
Item Instructions for Schedule RC-R, Part I
RC-R-4
Common Equity Tier 1 Capital
RC-R-4
Common Equity Tier 1 Capital: Adjustments and Deductions
RC-R-9
Additional Tier 1 Capital
RC-R-31
Tier 1 Capital
RC-R-39
Total Assets for the Leverage Ratio
RC-R-39
Leverage Ratio
RC-R-42
Qualifying Criteria and Other Information for CBLR Institutions
RC-R-42
Tier 2 Capital
RC-R-45
Total Capital
RC-R-55
Total Risk-Weighted Assets
RC-R-55
Risk-Based Capital Ratios
RC-R-55
Capital Buffer
RC-R-56
Supplementary Leverage Ratio
RC-R-60
FFIEC 031 and 041
RC-R-1
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R, Part I.
In the FFIEC 031, Schedule RC-R, Part I, has two columns for items 11 through 19. Items 11 through 19
in column A are to be completed by non-advanced approaches institutions (including institutions subject
to Category III capital standards1) and items 11 through 19 in column B are to be completed by advanced
approaches institutions.2
In the FFIEC 041, Schedule RC-R, Part I, has only one column for items 11 through 19 because
advanced approaches institutions are required to complete the FFIEC 031.
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
through 38.c, and can make that election on 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.3
1
Category III institutions include institutions, which are not advanced approaches institutions, that have (1) at least
$250 billion in average total consolidated assets or (2) at least $100 billion in average total consolidated assets and at
least $75 billion in average total nonbank assets, average weighted short-term wholesale funding; or average offbalance sheet exposure. In addition, depository institution subsidiaries of Category III institutions are considered
Category III institutions.
2
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.
3
See 12 CFR 3 (OCC); 12 CFR 217 (Board); 12 CFR 324 (FDIC).
FFIEC 031 and 041
RC-R-2
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R, Part I. (cont.)
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
Community Bank
Leverage Ratio
(percent)
> 8.5
> 9.0
Minimum Leverage
Ratio under the
applicable grace
period (percent)
> 7.5
> 8.0
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; has total trading assets and
trading liabilities of 5 percent or less of total consolidated assets (Schedule RC-R, Part I, item 33); and
has total off-balance sheet exposures (excluding derivatives other than sold credit derivatives
and unconditionally cancelable commitments) of 25 percent or less of total consolidated assets (Schedule
RC-R, Part I, item 34).
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.
FFIEC 031 and 041
RC-R-2a
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R, Part I. (cont.)
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
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.
FFIEC 031 and 041
RC-R-2b
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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.
FFIEC 031 and 041
RC-R-2c
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RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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.
FFIEC 031 and 041
RC-R-2d
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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
FFIEC 031 and 041
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
RC-R-2e
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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)
FFIEC 031 and 041
RC-R-2f
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
General Instructions for Schedule RC-R, Part I. (cont.)
An institution subject to the supplementary leverage ratio (advanced approaches
and Category III institutions) would make this additional Schedule RC-R
adjustment in its September 30, 2020, Call Report:
• Part I, Item 55.a (Total leverage exposure for SLR): Add $25 (modified CECL transitional amount)
An institution subject to the advanced approaches capital rule that has exited parallel run
would make this additional Schedule RC-R adjustment in its September 30, 2020, Call
Report:
• Part I, Item 42.b (Eligible credit reserves): Deduct $30 (eligible credit reserves transitional amount
Advanced Approaches Institutions: Advanced approaches institutions may use the amounts reported
in Schedule RC-R, Part I, to complete the FFIEC 101, Schedule A, as applicable. As described in the
General Instructions for the FFIEC 101, an institution must begin reporting on the FFIEC 101,
Schedule A, except for a few specific line items, at the end of the quarter after the quarter in which the
institution triggers one of the threshold criteria for applying the advanced approaches rule or elects to use
the advanced approaches rule (an opt-in institution),2 and it must begin reporting data on the remaining
schedules of the FFIEC 101 at the end of the first quarter in which it has begun its parallel run period.
Advanced approaches institutions must continue to file Schedule RC-R, Regulatory Capital, as well as the
FFIEC 101.
1 An institution is deemed to have elected to use the advanced approaches rule on the date that its primary federal
supervisor receives from the institution a board-approved implementation plan pursuant to section 121(b)(2) of the
regulatory capital rules. After that date, in addition to being required to report on the FFIEC 101, Schedule A, the
institution may no longer apply the AOCI opt-out election in section 22(b)(2) of the regulatory capital rules and it
becomes subject to the supplementary leverage ratio in section 10(c)(4) of the rules
FFIEC 031 and 041
RC-R-3
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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.
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 CET1 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.
FFIEC 031 and 041
RC-R-4
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
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.
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.
FFIEC 031 and 041
RC-R-5
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
2.a
(cont.)
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.
3
Accumulated other comprehensive income (AOCI). Report the amount of AOCI as
reported under U.S. generally accepted accounting principles (GAAP) that is included in
Schedule RC, item 26.b.
3.a
AOCI opt-out election.
(i) All institutions, except advanced approaches institutions
An institution that is not an advanced approaches institution may make a one-time election to
become subject to the AOCI-related adjustments in Schedule RC-R, Part I, items 9.a through
9.e. That is, such an institution may opt out of the requirement to include most components
of AOCI in common equity tier 1 capital (with the exception of accumulated net gains and
losses on cash flow hedges related to items that are not recognized at fair value on the
balance sheet). An institution that makes an AOCI opt-out election must enter “1” for “Yes” in
this item 3.a.
Each institution (except an advanced approaches institution) in existence as of March 31,
2015, made its AOCI opt-out election on the institution’s March 31, 2015, Call Report.
For an institution that comes into existence after March 31, 2015, or becomes a nonadvanced approaches institution, the institution must make its AOCI opt-out election in the
first Call Report the institution files after the occurrence of this event. After an institution
initially makes its AOCI opt-out election, the institution must report its election in each
quarterly Call Report thereafter. Each of the institution’s depository institution subsidiaries, if
any, must elect the same option as the institution. With prior notice to its primary federal
supervisor, an institution resulting from a merger, acquisition, or purchase transaction may
make a new AOCI opt-out election, as described in section 22(b)(2) of the regulatory capital
rules.
(ii) Institutions that do not make an AOCI opt-out election and all advanced
approaches institutions:
An institution that does not make an AOCI opt-out election and enters “0” for “No” in this
item 3.a and all advanced approaches institutions are subject to the AOCI-related adjustment
in Schedule RC-R, Part I, item 9.f.
4
Common equity tier 1 minority interest includable in common equity tier 1 capital.
Report the aggregate amount of common equity tier 1 minority interest, calculated as
described below and in section 21 of the regulatory capital rules. Common equity tier 1
minority interest is the portion of common equity tier 1 capital in a reporting institution’s
subsidiary not attributable, directly or indirectly, to the parent institution. Note that a bank
may only include common equity tier 1 minority interest if: (a) the subsidiary is a depository
institution or a foreign bank; and (b) the capital instruments issued by the subsidiary meet all
of the criteria for common equity tier 1 capital (qualifying common equity tier 1 capital
instruments).
FFIEC 031 and 041
RC-R-6
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
9.f
Caption and Instructions
To be completed only by institutions that entered “0” for No in in Schedule RC-R,
Part I, item 3.a:
LESS: Accumulated net gain (loss) on cash flow hedges included in AOCI, net of
applicable income taxes, that relates to the hedging of items that are not recognized at
fair value on the balance sheet. Report the amount of accumulated net gain (loss) on cash
flow hedges included in AOCI, net of applicable income taxes, that relates to the hedging of
items that are not recognized at fair value on the balance sheet. If the amount is a net gain,
report it as a positive value. If the amount is a net loss, report it as a negative value.
10
Other deductions from (additions to) common equity tier 1 capital before thresholdbased deductions:
10.a
LESS: Unrealized net gain (loss) related to changes in the fair value of liabilities that
are due to changes in own credit risk. Report the amount of unrealized net gain (loss)
related to changes in the fair value of liabilities that are due to changes in the institution’s own
credit risk. If the amount is a net gain, report it as a positive value in this item. If the amount
is a net loss, report it as a negative value in this item.
Advanced approaches institutions only: Include the credit spread premium over the riskfree rate for derivatives that are liabilities.
10.b
LESS: All other deductions from (additions to) common equity tier 1 capital before
threshold-based deductions. Report the amount of all other deductions from (additions to)
common equity tier 1 capital that are not included in Schedule RC-R, Part I, items 1 through
9, as described below.
(1) After-tax gain-on-sale in connection with a securitization exposure. Include any
after-tax gain-on-sale in connection with a securitization exposure. Gain-on-sale means
an increase in the equity capital of an institution resulting from a securitization (other than
an increase in equity capital resulting from the institution’s receipt of cash in connection
with the securitization or reporting of a mortgage servicing asset on Schedule RC).
(2) Defined benefit pension fund net asset, net of associated DTLs. An institution that is
not an insured depository institution should include any defined benefit pension fund net
asset. This amount may be net of any associated DTLs in accordance with section 22(e)
of the capital rules.
(3) Investments in the institution’s own shares to the extent not excluded as part of
treasury stock. Include the institution’s investments in (including any contractual
obligation to purchase) its own common stock instruments, including direct, indirect, and
synthetic exposures to such capital instruments (as defined in the regulatory capital
rules), to the extent such capital instruments are not excluded as part of treasury stock,
reported in Schedule RC-R, Part I, item 1.
If an institution already deducts its investment in its own shares (for example, treasury
stock) from its common equity tier 1 capital elements, it does not need to make such
deduction twice.
An institution may deduct gross long positions net of short positions in the same
underlying instrument only if the short positions involve no counterparty credit risk and all
other criteria in section 22(h) of the regulatory capital rules are met.
FFIEC 031 and 041
RC-R-13
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
10.b
(cont.)
The institution must look through any holdings of index securities to deduct investments
in its own capital instruments. In addition:
(i) Gross long positions in investments in an institution’s own regulatory capital
instruments resulting from holdings of index securities may be netted against short
positions in the same underlying index;
(ii) Short positions in index securities to hedge long cash or synthetic positions may be
decomposed to recognize the hedge; and
(iii) The portion of the index composed of the same underlying exposure that is being
hedged may be used to offset the long position only if both the exposure being
hedged and the short position in the index are covered positions under the market
risk rule, and the hedge is deemed effective by the institution’s internal control
processes.
(4) Reciprocal cross-holdings in the capital of financial institutions in the form of
common stock. Include investments in the capital of other financial institutions (in the
form of common stock) that the institution holds reciprocally (this is the corresponding
deduction approach). Such reciprocal crossholdings may result from a formal or informal
arrangement to swap, exchange, or otherwise intend to hold each other’s capital
instruments.
(5) Equity investments in financial subsidiaries. Include the aggregate amount of the
institutions’ outstanding equity investments, including retained earnings, in its financial
subsidiaries (as defined in 12 CFR 5.39 (OCC); 12 CFR 208.77 (Board); and
12 CFR 362.17 (FDIC)). The assets and liabilities of financial subsidiaries may not be
consolidated with those of the parent institution for regulatory capital purposes. No other
deduction is required for these investments in the capital instruments of financial
subsidiaries.
(6) Advanced approaches institutions only that exit parallel run.1 Include the amount of
expected credit loss that exceeds the institution’s eligible credit reserves.
An advanced approaches institution that has exited parallel run, has adopted Accounting
Standards Update No. 2016-13 (ASU 2016-13) on credit losses, and has elected to apply
the 3-year CECL transition provision (3-year CECL electing advanced approaches
institution) should decrease its eligible credit reserves by the applicable eligible credit
reserves transitional amount in accordance with section 301 of the regulatory capital
rules. Specifically, a 3-year CECL electing advanced approaches institution should
reduce the amount of its eligible credit reserves by 75 percent of its eligible credit
reserves transitional amount during the first year of the transition period, 50 percent of its
eligible credit reserves transitional amount during the second year of the transition period,
and 25 percent of its eligible credit reserves transitional amount during the third year of
the transition period.
1 An advanced approaches institution that exits the parallel run is an advanced approaches institution that has
completed the parallel run process and that has received notification from the primary federal supervisor pursuant to
section 121(d) of subpart E of the regulatory capital rules.
FFIEC 031 and 041
RC-R-14
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
10.b
(cont.)
An advanced approaches institution that has exited parallel run, has adopted ASU 201613, and has elected to apply the 5-year 2020 CECL transition provision (5-year CECL
electing advanced approaches institution) should decrease its eligible credit reserves by the
applicable eligible credit reserves transitional amount in accordance with section 301 of the
regulatory capital rules. Specifically, a 5-year CECL electing advanced approaches institution
should reduce the amount of its eligible credit reserves by 100 percent of its eligible credit
reserves transitional amount during the first and second years of the transition period, 75
percent of its eligible credit reserves transitional amount during the third year of the transition
period, 50 percent of its eligible credit reserves transitional amount during the fourth year of
the transition period, and 25 percent of its eligible credit reserves 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).
(7) Deductions for non-includable subsidiaries. A savings association that has a nonincludable subsidiary must deduct its outstanding investments (both equity and debt) in,
and extensions of credit to, the subsidiary in this item 10.b.
11
LESS: Non-significant investments in the capital of unconsolidated financial
institutions in the form of common stock that exceed the 10 percent threshold for
non-significant investments.
(i) All non-advanced approaches institutions (column A on the FFIEC 031):
Not applicable. Proceed to Schedule RC-R, Part I, item 12, (column A on the FFIEC 031,)
to complete the subtotal calculation.
(ii) All advanced approaches institutions (column B on the FFIEC 031):
An institution has a non-significant investment in the capital of an unconsolidated financial
institution if it owns 10 percent or less of the issued and outstanding common shares of that
institution.
Report the amount of non-significant investments in the capital of unconsolidated financial
institutions in the form of common stock that, in the aggregate, exceed the 10 percent
threshold for non-significant investments, calculated as described below. The institution may
apply associated DTLs to this deduction.
Example and a worksheet calculation for all advanced approaches institutions:
Assumptions:
• Assume that an institution has a total of $200 in non-significant investments in the
capital of unconsolidated financial institutions, of which $100 is in common shares.
For this example, all of the $100 in common shares is in the common stock of a
publicly traded financial institution.
• Assume the amount reported in Schedule RC-R, Part I, item 5, “Common equity tier 1
capital before adjustments and deductions,” is $1,000.
• Assume the amounts reported in Schedule RC-R, Part I, items 6 through 9.f, are
all $0.
FFIEC 031 and 041
RC-R-15
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
11
(cont.)
(1)
(2)
(3)
(4)
(5)
Determine the aggregate amount of non-significant
investments in the capital of unconsolidated financial
institutions (including in the form of common stock, additional
tier 1, and tier 2 capital).
Determine the amount of non-significant investments in the
capital of unconsolidated financial institutions in the form of
common stock.
Subtract from Schedule RC-R, Part I, item 5, the amounts in
Schedule RC-R, Part I, items 6, 7, 8, 9, 10.a, and 10.b.
Multiply the amount in step (3) by 10 percent. This is “the ten
percent threshold for non-significant investments.”
If (1) is greater than (4), subtract (4) from (1) and multiply the
result by the ratio of (2) divided by (1). Report this amount in
this Schedule RC-R, Part I, item 11.
If (1) is less than (4), enter zero in this item 11.
(6)
Assign the applicable risk weight to the amount of nonsignificant investments in the capital of unconsolidated
financial institutions that does not exceed the ten percent
threshold for non-significant investments.
$200
$100
$1,000 - $0 = $1,000
$1,000 x 10% = $100
Line (1) is greater than
line (4); therefore, $200 $100 = $100. Then
($100 x 100/200) = $50.
Report $50 in this item
11.
Of the $100 in common
shares, $50 are deducted
in this item 11. The
remaining $50 needs to
be included in riskweighted assets in
Schedule RC-R, Part II. *
* In this case (assuming that publicly traded equity exposures do not qualify for a 100 percent risk
weight under section 52(b)(3)(iii) of the regulatory capital rules), $50 x 300 percent risk weight for
publicly traded common shares under section 52(b)(5) of the capital rules = $150 in risk weighted
assets for the portion of common shares in an unconsolidated financial institution that are not
deducted.
FFIEC 031 and 041
RC-R-16
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-
14.b
(cont.)
For advanced approaches institutions, apply a 250 percent risk-weight to MSAs
that are not deducted from common equity tier 1 capital, without regard to any
associated DTLs.
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, (column B on the FFIEC 031) of $60.
(1)
Total amount of MSAs, net of associated DTLs
$20
(2)
Multiply the total common equity tier 1 capital subtotal by
10 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 10% = $6
(3)
$20 > $6, so the amount
deducted is $20-$6 = $14
NOTE: On the FFIEC 041, item 15 is to be completed by all reporting institutions. On the FFIEC 031,
item 15.a is to be completed only by non-advanced approaches institutions.
15
15.a
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 (column A on the FFIEC 031), report the difference in this item 15 on
the FFIEC 041; item 15.a on the FFIEC 031.
(3) If the amount in (1) is less than or equal to 25 percent of Schedule RC-R,
Part I, item 12 (column A on the FFIEC 031), enter zero in this item 15 on the
FFIEC 041; item 15.a on the FFIEC 031.
FFIEC 031 and 041
RC-R-23
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
15
(cont.)
15.a
(cont.)
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).
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 Schedule RC-R,
Part I, item 12, (column A on the FFIEC 031) of $60.
FFIEC 031 and 041
RC-R-24
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
15
(cont.)
RC-R – REGULATORY CAPITAL
15.a
(cont.)
(1)
Total amount of DTAs arising from temporary differences that
could not be realized through net operating loss carrybacks
net of any related valuation allowances and net of associated
DTLs.
Multiply the total common equity tier 1 capital subtotal by
25 percent.
Determine if (1) is greater than (2), and if so, the difference
between (1) and (2) must be deducted from regulatory capital.
(2)
(3)
$20
$60 x 25% = $15
$20 > $15, so the amount
deducted is $20-$15 = $5
NOTE: On the FFIEC 031, item 15.b is to be completed only by advanced approaches institutions.
Item 15.b is not applicable to institutions that file the FFIEC 041.
-
15.b
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 the 10 percent common equity tier 1 capital
deduction threshold.
(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 10 percent of Schedule RC-R, Part I,
item 12 (column B on the FFIEC 031), report the difference in this item 15.b.
(3) If the amount in (1) is less than 10 percent of Schedule RC-R, Part I, item 12
(column B on the FFIEC 031), enter zero in this item 15.b.
FFIEC 031 and 041
RC-R-24a
(3-21)
RC-R – REGULATORY CAPITAL
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
24
(cont.)
(4) Significant investments in the capital of unconsolidated financial institutions not in
the form of common stock to be deducted from additional tier 1 capital. Report the
total amount of significant investments in the capital of unconsolidated financial
institutions in the form of additional tier 1 capital.
(5) 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, non-significant investments in the tier 2 capital of
unconsolidated financial institutions, and significant investments in the tier 2 capital of
unconsolidated financial institutions).
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.
25
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 (ASU 201613) which governs the accounting for credit losses and introduces the current expected credit
losses methodology (CECL), and has elected to apply the 3-year CECL transition provision
(3-year CECL electing institution) should increase its average total consolidated assets by its
applicable CECL transitional amount, in accordance with section 301(c)(1)(iv) of the
regulatory capital rules. 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
FFIEC 031 and 041
RC-R-39
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
27
(cont.)
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.
(i) Non-advanced approaches institutions:
On the FFIEC 041, 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.
On the FFIEC 031, 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.a, 14.a,
15.a, 17 (column A), and 24.
On the FFIEC 031 and the FFIEC 041, 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.)
(ii) Advanced approaches institutions:
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, 11, 13.b, 14.b, 15.b, 16, 17
(column B), and 24. Also exclude the amount reported in Schedule RC-R, Part I, item 17,
that is due to insufficient amounts of additional tier 1 capital, and which is included in the
amount reported in Schedule RC-R, Part I, item 24. (This is to avoid double counting.)
29
LESS: Other deductions from (additions to) assets for leverage ratio purposes. Based
on the regulatory capital rules of the bank’s primary federal supervisor, report the amount of
any deductions from (additions to) total assets for leverage ratio purposes that are not
included in Schedule RC-R, Part I, item 28, as well as the items below, if applicable. If the
amount is a net deduction, report it as a positive value in this item. If the amount is a net
addition, report it as a negative value in this item.
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.
FFIEC 031 and 041
RC-R-40
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
29
(cont.)
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
AOCI into earnings. The intent of the adjustment reported in this item (together with the
amount reported in Schedule RC-R, Part I, item 9.d) is to reverse the effects on AOCI of
applying ASC Topic 715 for regulatory capital purposes. Specifically, assets recognized or
derecognized as an adjustment to AOCI as part of the incremental effect of applying
ASC Topic 715 should be reported as an adjustment to total assets for leverage ratio
purposes. For example, the derecognition of an asset recorded as an offset to AOCI as part
of the initial incremental effect of applying ASC Topic 715 should be added back to total
assets for leverage ratio purposes by reporting the amount as a negative number in this item.
As another example, the portion of a benefit plan surplus asset that is included in
Schedule RC, item 26.b, as an increase to AOCI and in total assets should be deducted from
total assets for leverage ratio purposes by reporting the amount as a positive number in this
item.
Institutions that do not make the AOCI opt-out election and all advanced approaches
institutions – Available-for-sale debt securities:
Available-for-sale debt securities are reflected at amortized cost when calculating average
total consolidated assets for Schedule RC-K, item 9. Therefore, include in this item as a
deduction from (addition to) assets for leverage ratio purposes the amount needed to adjust
the quarterly average for available-for-sale debt securities included in Schedule RC-K, item 9,
from an average based on amortized cost to an average based on fair value. If the deferred
tax effects of any net unrealized gains (losses) on available-for-sale debt securities were
excluded from the determination of average total consolidated assets for Schedule RC-K,
item 9, also include in this item as a deduction from (addition to) assets for leverage ratio
purposes the quarterly average amount necessary to reverse the effect of this exclusion on
the quarterly average amount of net deferred tax assets included in Schedule RC-K, item 9.
Financial Subsidiaries:
If a financial subsidiary is not consolidated into the bank for purposes of the bank’s balance
sheet, include in this item 29 as a deduction from the bank’s average total assets (as
reported in Schedule RC-R, Part I, item 27) the quarterly average for the bank's ownership
interest in the financial subsidiary accounted for under the equity method of accounting that is
included in the bank’s average total assets reported in Schedule RC-K, item 9.
FFIEC 031 and 041
RC-R-40a
(3-21)
RC-R – REGULATORY CAPITAL
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
29
(cont.)
If a financial subsidiary is consolidated into the bank for purposes of the bank’s balance
sheet, include in this item 29 as a deduction from the bank’s average total assets (as
reported in Schedule RC-R, Part I, item 27) the quarterly average of the assets of the
subsidiary that have been included in the bank’s consolidated average total assets reported
in Schedule RC-K, item 9; minus any deductions from common equity tier 1 capital and
additional tier 1 capital attributable to the financial subsidiary that have been included in
Schedule RC-R, Part I, item 28; and plus the quarterly average of bank assets representing
claims on the financial subsidiary, other than the bank’s ownership interest in the subsidiary,
that were eliminated in consolidation. Because the bank’s claims on the subsidiary were
eliminated in consolidation, these bank assets were not included in the bank’s consolidated
average total assets reported in Schedule RC-K, item 9.
.
FFIEC 031 and 041
RC-R-41
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
29
(cont.)
Non-Includable Subsidiaries:
A savings association with a non-includable subsidiary should include in this item 29
a deduction from average total assets (as reported in Schedule RC-R, Part I, item 27)
determined in the same manner as described above for financial subsidiaries, except that
for a non-includable subsidiary accounted for under the equity method of accounting, the
deduction should be the quarterly average for the savings association’s outstanding
investments (both equity and debt) in, and extensions of credit to, the subsidiary.
30
Total assets for the leverage ratio. Report Schedule RC-R, Part I, item 27, less items 28
and 29.
Leverage Ratio
31
Leverage ratio. Report the institution’s leverage ratio as a percentage, rounded to four
decimal places. Divide Schedule RC-R, Part I, item 26 by item 30.
31.a
Does your institution have a community bank leverage ratio (CBLR) framework
election in effect as of the quarter-end report date?
Enter “1” for Yes or enter “0” for No. Refer to the qualifying criteria for using the CBLR
framework, which are explained in the instructions for Schedule RC-R, Part I, items 32
through 34, below.
Qualifying Criteria and Other Information for CBLR Institutions
Schedule RC-R, Part I, items 32 through 37 and, if applicable, items 38.a through 38.c, are to be
completed only by qualifying institutions that have elected to adopt the community bank leverage ratio
(CBLR) framework or are within the grace period as of the quarter-end report date. (For further
information on the grace period, see the General Instructions for Part I.)
If your institution entered “1” in item 31.a, then items 32 through 37 and, if applicable, items 38.a through
38.c, must be completed. Institutions that do not qualify for or have not adopted the community bank
leverage ratio framework as of the quarter-end report date should leave items 32 through 38.c blank and
go to Schedule RC-R, Part I, item 39. A qualifying institution can opt out of the community bank leverage
ratio framework by completing Schedule RC-R, Parts I and II, excluding Schedule RC-R, Part I, items 32
through 38.c.
32
Total assets. Report total assets from Schedule RC, item 12. A bank’s total assets must be
less than $10 billion as part of the qualifying criteria for the CBLR framework.
33
Trading assets and trading liabilities. Report in column A the sum of trading assets from
Schedule RC, item 5, and trading liabilities from Schedule RC, item 15 (i.e., added, not
netted).
Report in column B the sum of trading assets and trading liabilities as a percentage of total
assets by dividing the amount of trading assets and trading liabilities reported in column A of
this item by total assets reported in Schedule RC-R, Part I, item 32, above, rounded to four
decimal places. The percentage reported in this item must be 5 percent or less of total
assets as part of the qualifying criteria for the CBLR framework.
34
Off-balance sheet exposures. Report in the appropriate subitem the specified off-balance
sheet exposure amounts.
FFIEC 031 and 041
RC-R-42
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
42
42.a
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 in accordance with section 301
of the regulatory capital rules. Specifically, a 3-year CECL electing institution
should reduce the amount of its AACL 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
FFIEC 031 and 041
RC-R-49
(3-21)
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
42
(cont.)
42.a
(cont.)
(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 riskweighted 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.a on the
FFIEC 031, item 42 on the FFIEC 041; 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.
NOTE: On the FFIEC 031, item 42.b is to be completed only by advanced approaches institutions that
exit parallel run. Item 42.b is not applicable to institutions that file the FFIEC 041.
-
42.b
43
FFIEC 031 and 041
Advanced approaches institutions that exit parallel run only: eligible credit
reserves includable in tier 2 capital. Report the amount of eligible credit
reserves includable in tier 2 capital as reported in FFIEC 101, Schedule A,
item 50.
Not applicable.
RC-R-50
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
52.a
(cont.)
For all institutions, except advanced approaches institutions that exit parallel run:
(1) Schedule RC-R, Part I, item 49, column A, 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, column A, 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, column A, 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.
For advanced approaches institutions that exit parallel run only:
(1) The lower of Schedule RC-R, Part I, item 49, column A and column B, less
4.5000 percent, which is the minimum common equity tier 1 capital ratio requirement
under section 10 of the regulatory capital rules;
(2) The lower of Schedule RC-R, Part I, item 50, column A and column B, less
6.0000 percent, which is the minimum tier 1 capital ratio requirement under section 10
of the regulatory capital rules; and
(3) The lower of Schedule RC-R, Part I, item 51, column A and column B, 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.
52.b
Advanced approaches institutions (FFIEC 031) and institutions subject to Category III
capital standards (FFIEC 031 and FFIEC 041) only: Total applicable capital buffer.
Report the total applicable capital buffer requirement for the reporting institution as specified
in the capital rule. The total applicable capital buffer requirement is the sum of the capital
conservation buffer (2.5000 percent) plus any countercyclical capital buffer that is in place
plus any countercyclical capital buffers in other jurisdictions to which the institution is subject.
NOTE: Non-advanced approaches institutions other than Category III institutions must complete
Schedule RC-R, Part I, item 53, only if the amount reported in Schedule RC-R, Part I, item 52.a,
above, is less than or equal to 2.5000 percent. Advanced approaches institutions and Category III
institutions must complete Schedule RC-R, Part I, item 53, only if the amount reported in
Schedule RC-R, Part I, item 52.a, above, is less than or equal to the amount reported in
Schedule RC-R, Part I, item 52.b, above.
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
FFIEC 031 and 041
RC-R-57
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
53
(cont.)
calendar quarters as illustrated in the example below. The average of an institution’s
net income amount over the four preceding calendar quarters refers to the average of threemonth 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.
Example and a worksheet calculation:
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.
FFIEC 031 and 041
RC-R-58
(3-21)
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
NOTE: Non-advanced approaches institutions other than Category III institutions must complete
Schedule RC-R, Part I, item 54, only if the amount reported in Schedule RC-R, Part I, item 52.a, in
the Call Report for the previous calendar quarter-end report date was less than or equal to 2.5000
percent. Advanced approaches institutions and Category III institutions must complete Schedule
RC-R, Part I, item 54, only if the amount reported in Schedule RC-R, Part I, item 52.a, in the Call
Report for the previous calendar quarter-end report date was less than or equal to the amount
reported in Schedule RC-R, Part I, item 52.b, in the Call Report for the previous calendar quarterend report date.
Item No.
54
Caption and Instructions
Distributions and discretionary bonus payments during the quarter. An institution must
complete this item only if the amount of its institution-specific capital buffer, as reported as of
the previous calendar quarter-end report date, was less than its applicable required buffer
percentage on that previous calendar quarter-end report date. For an institution that must
complete this item 54, report the amount of distributions and discretionary bonus payments
during the calendar quarter ending on the report date.
FFIEC 031 and 041
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Item No.
Caption and Instructions
54
(cont.)
•
For example:
A non-advanced approaches institution other than a Category III institution must report
the amount of distributions and discretionary bonus payments made during the calendar
quarter ending June 30, 2020, in this item 54 in its June 30, 2020, Call Report only if the
amount of its capital conservation buffer as reported in Schedule RC-R, Part I, item 52.a,
in its March 31, 2020, Call Report was less than or equal to 2.5000 percent
• An institution that is an advanced approaches institution or a Category III institution must
report the amount of distributions and discretionary bonus payments made during the
calendar quarter ending June 30, 2020, in this item 54 in its June 30, 2020, Call Report
only if the amount of its capital buffer as reported in Schedule RC-R, Part I, item 52.a, in
its March 31, 2020, Call Report was less than or equal to the amount reported in
Schedule RC-R, Part I, item 52.b, in its March 31, 2020, Call Report.
As defined in section 2 of the regulatory capital rules, “distribution” means:
(1) A reduction of tier 1 capital through the repurchase of a tier 1 capital instrument or by
other means, except when an institution, within the same quarter when the repurchase is
announced, fully replaces a tier 1 capital instrument it has repurchased by issuing
another capital instrument that meets the eligibility criteria for:
(i) A common equity tier 1 capital instrument if the instrument being repurchased was
part of the institution's common equity tier 1 capital, or
(ii) A common equity tier 1 or additional tier 1 capital instrument if the instrument being
repurchased was part of the institution's tier 1 capital;
(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.
FFIEC 031 and 041
RC-R-59
(3-21)
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part I. (cont.)
Supplementary Leverage Ratio
Item No.
Caption and Instructions
NOTE: Schedule RC-R, Part I, items 55.a and 55.b, are to be completed only by advanced approaches
institutions, including those that have not exited parallel run, and institutions subject to Category III capital
standards. All other institutions should leave Schedule RC-R, Part I, items 55.a and 55.b, blank.
55
Advanced approaches institutions (FFIEC 031) and institutions subject to Category III
capital standards (FFIEC 031 and FFIEC 041): Supplementary leverage ratio
information. Report in the appropriate subitem the institution’s total leverage exposure and
its supplementary leverage ratio.
55.a
Total leverage exposure. Report the institution’s total leverage exposure as measured in
accordance with section 10(c)(4)(ii)(A) through (H) of the regulatory capital rules, as adjusted
pursuant to section 10(c)(4)(ii)(I) for a clearing member institution and section 10(c)(4)(ii)(J)
for a custody bank; sections 302 and 305 of these rules for exposures related to the Money
Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility;
and, for an electing advanced approaches or Category III depository institution, the applicable
section of these rules for U.S. Treasury securities and deposits in the institution’s accounts at
Federal Reserve Banks (section 303 for an institution supervised by the Federal Reserve;
section 304 for an institution supervised by the OCC or the FDIC).
An advanced approaches or Category III 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 increase its total leverage exposure by its applicable CECL transitional amount, in
accordance with section 301 of the regulatory capital rules. For example, a 3-year CECL
electing institution should increase its total leverage exposure for purposes of the
supplementary 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.
An advanced approaches or Category III 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 total leverage exposure 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 total leverage exposure for purposes of the
supplementary 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).
55.b
Supplementary leverage ratio. Report the institution’s supplementary leverage ratio as a
percentage, rounded to four decimal places. Divide Schedule RC-R, Part I, item 26, “Tier 1
capital,” by Schedule RC-R, Part I, item 55.a, “Total leverage exposure.”
FFIEC 031 and 041
RC-R-60
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. Risk-Weighted Assets
Contents – Part II. Risk-Weighted Assets
Community Bank Leverage Ratio Framework
RC-R-62
General Instructions for Schedule RC-R, Part II
RC-R-62
Exposure Amount Subject to Risk Weighting
RC-R-63
Amounts to Report in Column B
RC-R-64
Treatment of Collateral and Guarantees
RC-R-66
a. Collateralized Transactions
RC-R-66
b. Guarantees and Credit Derivatives
RC-R-67
Treatment of Equity Exposures
RC-R-67
Treatment of Sales of 1-4 Family Residential First Mortgage Loans
with Credit-Enhancing Representations and Warranties
RC-R-69
Treatment of Exposures to Sovereign Entities and Foreign Banks
RC-R-70
Summary of Risk Weights for Exposures to Government and
Public Sector Entities
RC-R-72
Risk-Weighted Assets for Securitization Exposures
RC-R-72
a. Exposure Amount Calculation
RC-R-73
b. Simplified Supervisory Formula Approach
RC-R-74
c. Gross-Up Approach
RC-R-76
d. 1,250 Percent Risk Weight Approach
RC-R-78
Banks That Are Subject to the Market Risk Capital Rule
RC-R-79
Adjustments for Financial Subsidiaries
RC-R-80
Treatment of Embedded Derivatives
RC-R-81
Reporting Exposures Hedged with Cleared Eligible Credit Derivatives
RC-R-82
Treatment of Certain Centrally Cleared Derivative Contracts
RC-R-82
Treatment of FDIC Loss-Sharing Agreements
RC-R-84
Allocated Transfer Risk Reserve
RC-R-84
FFIEC 031 and 041
RC-R-61
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Contents – Part II. Risk-Weighted Assets (cont.)
Item Instructions for Schedule RC-R, Part II
RC-R-85
Balance Sheet Asset Categories
RC-R-85
Securitization Exposures: On- and Off-Balance Sheet
RC-R-126
Total Assets
RC-R-132
Derivatives, Off-Balance Sheet Items, and Other Items Subject
To Risk Weighting (Excluding Securitization Exposures)
RC-R-133
Totals
RC-R-157
Memoranda
RC-R-160
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.
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.
FFIEC 031 and 041
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FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item Instructions for Schedule RC-R, Part II.
Balance Sheet Asset Categories
Item No.
1
Caption and Instructions
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.
•
Cash and balances due from depository institutions that must be risk weighted according
to the Country Risk Classification (CRC) methodology
o In column C–0% risk weight; column G–20% risk weight; column H–50% risk weight;
column I–100% risk weight; column J–150% risk weight. Assign these exposures to
risk weight categories based on the CRC methodology described above in the
General Instructions for Part II. Include:
o The amounts reported in Schedule RC, items 1.a and 1.b, composed of balances
due from foreign banks; and
o Any balances due from foreign central banks.
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
FFIEC 031 and 041
RC-R-85
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
1
(cont.)
from a Federal Reserve Bank. This treatment differs from that required in Schedule RC-A,
item 2, "Balances due from depository institutions in the U.S.," which 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 cannot or 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 cannot or 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
FFIEC 031 and 041
RC-R-86
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
2.a
(cont.)
earnings in accordance with ASC Topic 320, Investments-Debt Securities (formerly FASB
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 for non-advanced approaches institutions, include the amount of:
o Investments in the capital of unconsolidated financial institutions in the form of tier 2
capital that are reported in Schedule RC, item 2.a, and have been deducted from
capital in Schedule RC-R, Part I, item 45.
•
In column B for advanced approaches institutions, include the amount of:
o Non-significant 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.
o Significant investments in the capital of unconsolidated financial institutions in the
form of tier 2 capital 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.
•
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:
FFIEC 031 and 041
RC-R-87
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
○
o
o
2.a
(cont.)
o
o
o
Item 1, "U.S. Treasury securities,"
Item 2, those obligations issued by U.S. Government agencies,
Item 4.a.(1), Residential mortgage pass-through securities "Guaranteed by GNMA,”
Item 4.b.(1), those other residential mortgage-backed securities issued or guaranteed
by U.S. Government agencies, such as GNMA exposures,
Item 4.c.(1)(a), those commercial mortgage-backed securities (MBS) “Issued or
guaranteed by FNMA, FHLMC, or GNMA” that represent GNMA securities, and
Item 4.c.(2)(a), those commercial MBS “Issued or guaranteed by U.S. Government
agencies or sponsored agencies” that represent GNMA securities.
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
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.(2), 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,
○ 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.
•
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.(3), "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.)
FFIEC 031 and 041
RC-R-88
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
2.b
(cont.)
Significant investments in the capital of unconsolidated financial institutions in the
form of common stock reported in Schedule RC, item 2.c, that are subject to the
10 percent and 15 percent common equity tier 1 capital threshold limitations and
have been deducted for risk-based capital purposes in Schedule RC-R, Part I,
items 13.b and 16, column B, on the FFIEC 031.
•
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 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,"
o Item 2, those obligations issued by U.S. Government agencies,
o Item 4.a.(1), 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.
•
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.(2), 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),
FFIEC 031 and 041
RC-R-93
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
2.b
(cont.)
o
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
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.
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.
•
In column H–50% risk weight, include the exposure amounts of those debt securities
reported in Schedule RC-B, column C, that do not qualify as securitization exposures that
qualify for the 50 percent risk weight. Such debt securities may include portions of, but
may not be limited to:
o Item 3, "Securities issued by states and political subdivisions in the U.S.," that
represent revenue obligation securities,
o Item 4.a.(3), "Other [residential mortgage] pass-through securities," (that represent
residential mortgage exposures that qualify for the 50 percent risk weight. (Passthrough securities that do not qualify for the 50 percent risk weight should be
assigned to the 100 percent risk weight category.)
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (exclude portions subject to an
FDIC loss-sharing agreement and interest-only securities) that represent residential
mortgage exposures that qualify for the 50 percent risk weight, and
o Item 4.b.(3), “All other residential MBS.” Include only those MBS that qualify for the
50 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
Note: Do not include MBS that are tranched for credit risk; those should be reported
as securitization exposures in Schedule RC-R, Part II, item 9.b. Do not include
interest-only securities.
o The portion of any exposure reported in Schedule RC, item 2.b, that is secured by
collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the exposure amounts of those debt securities
reported in Schedule RC-B, column C, that do not qualify as securitization exposures that
qualify for the 100 percent risk weight. Such debt securities may include portions of, but
may not be limited to:
o Item 4.a.(3), "Other [residential mortgage] pass-through securities," that represent
residential mortgage exposures that qualify for the 100 percent risk weight,
o Item 4.b.(2), Other residential MBS "Collateralized by MBS issued or guaranteed by
U.S. Government agencies or sponsored agencies" (excluding portions subject to an
FDIC loss-sharing agreement) that represent residential mortgage exposures that
qualify for the 100 percent risk weight,
o Item 4.b.(3), "All other residential MBS." Include only those MBS that qualify for the
100 percent risk weight. Refer to §.32(g), (h) and (i) of the regulatory capital rules.
Note: Do not include MBS portions that are tranched for credit risk; those should be
reported as securitization exposures in Schedule RC-R, Part II, item 9.b.
o Item 4.c.(1)(b), “Other [commercial mortgage] pass-through securities,”
o Item 4.c.(2)(b), “All other commercial MBS,”
o Item 5.a, "Asset-backed securities,"
FFIEC 031 and 041
RC-R-94
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
4.a
Caption and Instructions
Residential mortgage exposures. Report in column A the carrying value of loans held for
sale (HFS) reported in Schedule RC, item 4.a, that meet the definition of a residential
mortgage exposure or a statutory multifamily mortgage1 in §.2 of the regulatory capital rules.
Include in column A the carrying value of:
• HFS loans secured by first or subsequent liens on 1-4 family residential properties
(excluding those that qualify as securitization exposures) that are reported in
Schedule RC-C, Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b), and
• HFS loans secured by first or subsequent liens on multifamily residential properties with
an original and outstanding amount of $1 million or less (excluding those that qualify as
securitization exposures) that are reported in Schedule RC-C, Part I, item 1.d,
as these HFS loans would meet the regulatory capital rules’ definition of residential mortgage
exposure.
1
Statutory multifamily mortgage means a loan secured by a multifamily residential property that meets the
requirements under Section 618(b)(1) of the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991, and that meets the following criteria:
(1) The loan is made in accordance with prudent underwriting standards;
(2) The principal amount of the loan at origination does not exceed 80 percent of the value of the property (or 75
percent of the value of the property if the loan is based on an interest rate that changes over the term of the loan)
where the value of the property is the lower of the acquisition cost of the property or the appraised (or, if
appropriate, evaluated) value of the property;
(3) All principal and interest payments on the loan must have been made on a timely basis in accordance with the
terms of the loan for at least one year prior to applying a 50 percent risk weight to the loan, or in the case where
an existing owner is refinancing a loan on the property, all principal and interest payments on the loan being
refinanced must have been made on a timely basis in accordance with the terms of the loan for at least one year
prior to applying a 50 percent risk weight to the loan;
(4) Amortization of principal and interest on the loan must occur over a period of not more than 30 years and the
minimum original maturity for repayment of principal must not be less than 7 years;
(5) Annual net operating income (before making any payment on the loan) generated by the property securing the
loan during its most recent fiscal year must not be less than 120 percent of the loan's current annual debt service
(or 115 percent of current annual debt service if the loan is based on an interest rate that changes over the term
of the loan) or, in the case of a cooperative or other not-for-profit housing project, the property must generate
sufficient cash flow to provide comparable protection to the institution; and
(6) The loan is not more than 90 days past due, or on nonaccrual.
A loan that meets the requirements of Section 618(b)(1) of the Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991 is a loan:
(i) secured by a first lien on a residence consisting of more than 4 dwelling units;
(ii) under which
(I) the rate of interest does not change over the term of the loan, (b) the principal obligation does not exceed 80
percent of the appraised value of the property, and (c) the ratio of annual net operating income generated by
the property (before payment of any debt service on the loan) to annual debt service on the loan is not less
than 120 percent; or
(II) the rate of interest changes over the term of the loan, (b) the principal obligation does not exceed 75 percent
of the appraised value of the property, and (c) the ratio of annual net operating income generated by the
property (before payment of any debt service on the loan) to annual debt service on the loan is not less than
115 percent;
(iii) under which
(I) amortization of principal and interest occurs over a period of not more than 30 years;
(II) the minimum maturity for repayment of principal is not less than 7 years; and
(III) timely payment of all principal and interest, in accordance with the terms of the loan, occurs for a period of
not less than 1 year; and
(iv) that meets any other underwriting characteristics that the appropriate Federal banking agency may establish,
consistent with the purposes of the minimum acceptable capital requirements to maintain the safety and
soundness of financial institutions.
FFIEC 031 and 041
RC-R-99
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
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 031 and 041
RC-R-100
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
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).
o 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 031 and 041
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.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFS exposure secured by
such collateral. Any remaining portion of the HFS exposure that is uncollateralized
or collateralized by other qualifying collateral would be reported in columns C
through I, as appropriate. For further information, see the discussions of “Treatment
of Collateral and Guarantees” and “Risk-Weighted Assets for Securitization
Exposures” in the General Instructions for Schedule RC-R, Part II.
RC-R-100a
(3-21)
RC-R – REGULATORY CAPITAL
This page intentionally left blank.
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.a
(cont.)
•
FFIEC 031 and 041
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.
o Include in column R the carrying value of the portion of an HFS exposure that is
secured by the fair value of securitization exposure or mutual fund collateral that
meets the general requirements of the Simple Approach in §.37. In addition, the
bank must apply the same approach to securitization exposure collateral – either the
Simplified Supervisory Formula Approach or the Gross-Up Approach – that it applies
to determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFS exposure secured by
such collateral. Any remaining portion of the HFS exposure that is uncollateralized or
collateralized by other qualifying collateral would be reported in columns C through I,
as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
RC-R-101
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
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.
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 031 and 041
RC-R-102
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
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.
o Include in column R the carrying value of the portion of an HFS HVCRE exposure
that is secured by the fair value of securitization exposure or mutual fund collateral
that meets the general requirements of the Simple Approach in §.37. In addition, the
bank must apply the same approach to securitization exposure collateral – either the
Simplified Supervisory Formula Approach or the Gross-Up Approach – that it applies
to determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFS exposure that is
secured by such collateral. Any remaining portion of the HFS exposure that is
uncollateralized or collateralized by other qualifying collateral would be reported in
columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
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
FFIEC 031 and 041
RC-R-103
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.c
(cont.)
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).
•
•
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.
•
In column G–20% risk weight, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the 20
percent risk weight. This would include the portion of HFS loans covered by an FDIC
loss-sharing agreement.
•
In column H–50% risk weight, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the 50
percent risk weight.
•
In column I–100% risk weight,, include the portion of loans and leases HFS included in
Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual status (except
as noted above), that is secured by collateral or has a guarantee that qualifies for the
100 percent risk weight.
•
In column J–150% risk weight, include the carrying value of loans and leases HFS
included in Schedule RC, item 4.a, that are 90 days or more past due or in nonaccrual
status (except as noted above), excluding those portions that are covered by qualifying
collateral or eligible guarantees as described in §.37 and §.36, respectively, of the
regulatory capital rules.
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 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 Include in column R the carrying value of the portion of an HFS loan or lease that is
90 days or more past due or in nonaccrual status that is secured by the fair value of
securitization exposure or mutual fund collateral that meets the general requirements
of the Simple Approach in §.37. In addition, the bank must apply the same approach
to securitization exposure collateral – either the Simplified Supervisory Formula
Approach or the Gross-Up Approach – that it applies to determine the risk-weighted
asset amounts of its on- and off-balance sheet securitization exposures that are
reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFS exposure that is
secured by such collateral. Any remaining portion of the HFS exposure that is
FFIEC 031 and 041
RC-R-104
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.c
(cont.)
4.d
uncollateralized or collateralized by other qualifying collateral would be reported in
columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
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.
•
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
FFIEC 031 and 041
RC-R-105
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
4.d
(cont.)
the Simple Approach, the risk weight assigned to the collateralized portion of the
exposure may not be less than 20 percent.
• Include in column R the carrying value of the portion of such an HFS loan or lease
that is secured by the fair value or adjusted fair value of securitization exposure or
mutual fund collateral as determined under the Simple Approach or the Collateral
Haircut Approach, respectively; however, the bank must apply the same approach for
all eligible margin loans. In addition, if the bank applies the Simple Approach, it must
apply the same approach to securitization exposure collateral – either the Simplified
Supervisory Formula Approach or the Gross-Up Approach – that it applies to
determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFS exposure that is
secured by such collateral. Any remaining portion of the HFS exposure that is
uncollateralized or collateralized by other qualifying collateral would be reported in
columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
•
5
All other HFS loans and leases that must be risk weighted according to the Country Risk
Classification (CRC) methodology
o In column C–0% risk weight; column G–20% risk weight; column H–50% risk weight;
column I–100% risk weight; column J–150% risk weight. Assign these exposures to
risk-weight categories based on the CRC methodology described above in the
General Instructions for Part II:
o The carrying value of other loans and leases held for sale reported in Schedule RC,
item 4.a, that are not reported in Schedule RC-R, Part II, items 4.a through 4.c above.
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
1
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.
See the instructions for Schedule RC-R, Part II, item 4.a, above for the definition of statutory multifamily mortgage.
FFIEC 031 and 041
RC-R-106
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
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,
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 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.
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 031 and 041
RC-R-107
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
Also include the portion of any loan HFI which meets the definition of residential
mortgage exposure reported in Schedule RC, item 4.b, that is secured by collateral or
has a guarantee that qualifies for the 50 percent risk weight.
Notes:
1. Refer to the definition of “residential mortgage exposure” in §.2 of the regulatory capital
rules, and refer to the requirements for risk weighting residential mortgage loans in §.32
of the regulatory capital rules.
FFIEC 031 and 041
RC-R-108
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
2. A residential mortgage loan may receive a 50 percent risk weight if it meets the
qualifying criteria in §.32(g) of the regulatory capital rules:
o A property is owner-occupied or rented;
o The loan is prudently underwritten including the loan amount as a percentage of the
appraised value of the real estate collateral.
o The loan is not 90 days or more past due or on nonaccrual;
o The loan is not restructured or modified (except for loans restructured solely (1)
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).
o If the bank holds the first lien and junior lien(s) on a residential mortgage exposure,
and no other party holds an intervening lien, the bank must combine the exposures
and treat them as a single first-lien residential mortgage exposure.
3. A first lien home equity line (HELOC) may qualify for 50 percent risk weight if it meets
the qualifying criteria in §.32(g) listed above.
4. A residential mortgage loan of $1 million or less on a property of more than 4 units
may qualify for 50 percent risk weight if it meets the qualifying criteria in §.32(g) listed
above.
•
In column I–100% risk weight, include the carrying value of loans HFI related to
residential mortgages exposures reported in Schedule RC, item 4.b, that are not included
in columns C, G, H, or R. Include loans HFI that are junior lien residential mortgage
exposures if the bank does not hold the first lien on the property, except the portion of
any junior lien residential mortgage exposure that is secured by collateral or has a
guarantee that qualifies for the zero percent, 20 percent, or 50 percent risk weight. Also
include loans HFI that are residential mortgage exposures that have been restructured or
modified, except
○ Those loans restructured or modified solely pursuant to the U.S. Treasury’s HAMP,
and
o The portion of any restructured or modified residential mortgage exposure that is
secured by collateral or has a guarantee that qualifies for the zero percent,
20 percent, or 50 percent risk weight.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loan HFI reported in Schedule RC, item 4.b, that meets the definition of residential
mortgage exposure or statutory multifamily mortgage and is secured by qualifying
financial collateral that meets the definition of a securitization exposure in §.2 of the
regulatory capital rules or is a mutual fund only if the bank chooses to recognize the riskmitigating effects of the securitization exposure or mutual fund collateral under the Simple
Approach outlined in §.37 of the regulatory capital rules. Under the Simple Approach, the
risk weight assigned to the collateralized portion of the exposure may not be less than
20 percent.
○ Include in column R the carrying value of the portion of an HFI loan exposure that is
secured by the fair value of securitization exposure or mutual fund collateral that
meets the general requirements of the Simple Approach in §.37. In addition, the
bank must apply the same approach to securitization exposure collateral – either the
Simplified Supervisory Formula Approach or the Gross-Up Approach – that it applies
to determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFI loan exposure secured
FFIEC 031 and 041
RC-R-108a
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.a
(cont.)
5.b
1
by such collateral. Any remaining portion of the HFI loan exposure that is
uncollateralized or collateralized by other qualifying collateral would be reported in
columns C through I, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
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.
•
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 HFI 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.
See the instructions for Schedule RC-R, Part II, item 4.b, above for the definition of HVCRE exposure.
FFIEC 031 and 041
RC-R-109
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
5.b
(cont.)
5.c
Include in column R the carrying value of the portion of an HFI HVCRE exposure that
is secured by the fair value of securitization exposure or mutual fund collateral that
meets the general requirements of the Simple Approach in §.37. In addition, the
bank must apply the same approach to securitization exposure collateral – either the
Simplified Supervisory Formula Approach or the Gross-Up Approach – that it applies
to determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the HFI HVCRE exposure that
is secured by such collateral. Any remaining portion of the HFI exposure that is
uncollateralized or collateralized by other qualifying collateral would be reported in
columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
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.
•
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.
FFIEC 031 and 041
RC-R-110
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.c
(cont.)
•
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.
o Include in column R the carrying value of the portion of a loan or lease HFI that is
90 days or more past due or in nonaccrual status that is secured by the fair value of
securitization exposure or mutual fund collateral that meets the general requirements
of the Simple Approach in §.37. In addition, the bank must apply the same approach
to securitization exposure collateral – either the Simplified Supervisory Formula
Approach or the Gross-Up Approach – that it applies to determine the risk-weighted
asset amounts of its on- and off-balance sheet securitization exposures that are
reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the loan or lease HFI that is
secured by such collateral. Any remaining portion of the HFI loan or lease exposure
that is uncollateralized or collateralized by other qualifying collateral would be
reported in columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
5.d
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, net of unearned income. 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.
•
In column G–20% risk weight, include the carrying value of HFI loans to and acceptances
of other U.S. depository institutions that are reported in Schedule RC-C, Part I, item 2
(excluding the carrying value of any long-term exposures to non-OECD banks), plus the
FFIEC 031 and 041
RC-R-111
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.d
(cont.)
carrying value of the HFI guaranteed portion of SBA loans originated and held by the
reporting bank included in Schedule RC-C, Part I, and the carrying value of the portion
of HFI student loans reinsured by the U.S. Department of Education included in
Schedule RC-C, Part I, item 6.d, "Other consumer loans." Also include the portion of any
loans and leases HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c
above, that is secured by collateral or has a guarantee that qualifies for the 20 percent
risk weight. This would include the portion of loans and leases HFI covered by FDIC
loss-sharing agreements.
•
In column H–50% risk weight, include the carrying value of loans and leases HFI that
meet the definition of presold construction loan in §.2 of the regulatory capital rules that
qualify for the 50 percent risk weight. Also include the portion of any loans and leases
HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c above, that is secured
by collateral or has a guarantee that qualifies for the 50 percent risk weight.
•
In column I–100% risk weight, include the carrying value of loans and leases HFI
reported in Schedule RC, item 4.b, that is not included in columns C through H, J, or R
(excluding loans that are assigned a higher than 100 percent risk weight, such as
HVCRE loans and past due loans). This item would include 1-4 family construction loans
and leases HFI reported in Schedule RC-C, Part I, item 1.a.(1) and the portion of loans
HFI secured by multifamily residential property reported in Schedule RC-C, Part I,
item 1.d, with an original amount of more than $1 million. Also include the carrying value
of loans HFI that meet the definition of presold construction loan in §.2 of the regulatory
capital rules that qualify for the 100 percent risk weight. Also include the portion of any
loans and leases HFI not reported in Schedule RC-R, Part II, items 5.a through 5.c
above, that is secured by collateral or has a guarantee that qualifies for the 100 percent
risk weight.
•
In columns R and S–Application of Other Risk-Weighting Approaches, include the portion
of any loans and leases HFI including eligible margin loans, reported in Schedule RC,
item 4.b, that is secured by qualifying financial collateral that meets the definition of a
securitization exposure in §.2 of the regulatory capital rules or is a mutual fund only if the
bank chooses to recognize the risk-mitigating effects of the securitization exposure or
mutual fund collateral under the Simple Approach, or the collateral margin approach for
eligible margin loans, outlined in §.37 of the regulatory capital rules. Under the Simple
Approach, the risk weight assigned to the collateralized portion of the exposure may not
be less than 20 percent.
o Include in column R the carrying value of the portion of such a loan or lease HFI that
is secured by the fair value or adjusted fair value of securitization exposure or mutual
fund collateral as determined under the Simple Approach or the Collateral Haircut
Approach, respectively; however, the bank must apply the same approach for all
eligible margin loans. In addition, if the bank applies the Simple Approach, it must
apply the same approach to securitization exposure collateral – either the Simplified
Supervisory Formula Approach or the Gross-Up Approach – that it applies to
determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the loan or lease HFI that is
secured by such collateral. Any remaining portion of the HFI loan or lease exposure
that is uncollateralized or collateralized by other qualifying collateral would be
reported in columns C through J, as appropriate.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
FFIEC 031 and 041
RC-R-112
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
5.d
(cont.)
•
All other loans and leases HFI that must be risk weighted according to the Country Risk
Classification (CRC) methodology
o In column C–0% risk weight; column G–20% risk weight; column H–50% risk weight;
column I–100% risk weight; column J–150% risk weight. Assign these exposures to
risk-weight categories based on the CRC methodology described above in the
General Instructions for Part II:
o The carrying value of other loans and leases HFI reported in Schedule RC, item 4.b,
that are not reported in Schedule RC-R, Part II, items 5.a through 5.c above.
6
LESS: Allowance for loan and lease losses. Report in columns A and B the balance of
the allowance for loan and lease losses or the allowance for credit losses on loans and
leases, as applicable, reported in Schedule RC, item 4.c.
7
Trading assets. Report in column A the fair value of trading assets reported in
Schedule RC, item 5, excluding those trading assets that are securitization exposures, as
defined in §.2 of the regulatory capital rules.
The fair value of those trading assets reported in Schedule RC, item 5, that qualify as
securitization exposures must be reported in Schedule RC-R, Part II, item 9.c, column A.
The sum of Schedule RC-R, Part II, items 7 and 9.c, column A, must equal Schedule RC,
item 5.
If the bank is subject to the market risk capital rule, include in column B the fair value of all
trading assets that are covered positions as defined in Schedule RC-R, Part II, item 27
(except those trading assets that are both securitization exposures and covered positions,
which are excluded from column A of this item 7 and are to be reported instead in
Schedule RC-R, Part II, item 9.c, column A). The bank will report its standardized market
risk-weighted assets in Schedule RC-R, Part II, item 27.
For banks not subject to the market risk capital rule and for those trading assets reported in
column A that are held by banks subject to the market risk capital rule and do not meet the
definition of a covered position:
•
In column B, if the bank completes Schedule RC-D, include the fair value of derivative
contracts that are reported as assets in Schedule RC-D, item 11. If the bank does not
complete Schedule RC-D, include the portion of the amount reported in Schedule RC,
item 5, that represents the fair value of derivative contracts that are assets. Exclude from
column B those derivative contracts reported in these items that qualify as securitization
exposures. For purposes of risk weighting, include the credit equivalent amounts of
these derivatives, determined in accordance with the regulatory capital rules, in the riskweight categories in Schedule RC-R, Part II, items 20 and 21, as appropriate. Do not risk
weight these derivatives in this item.
In column B for non-advanced approaches institutions, include the amount of:
○ Investments in the capital of unconsolidated financial institutions that are reported in
Schedule RC, item 5, and have been deducted from capital in Schedule RC-R, Part I,
item 13.a, item 17, item 24, and item 45 on the FFIEC 031; item 13, item 17, item 24,
and item 45 on the FFIEC 041.
FFIEC 031 and 041
RC-R-113
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
7
(cont.)
In column B for advanced approaches institutions, include the amount of:
○ Non-significant investments in the capital of unconsolidated financial institutions that
are reported in Schedule RC, item 5, and have been deducted from capital in
Schedule RC-R, Part I, item 11, item 24, and item 45 on the FFIEC 031.
o Significant investments in the capital of unconsolidated financial institutions not in the
form of common stock that are reported in Schedule RC, item 5, and have been
deducted from capital in Schedule RC-R, Part I, item 24 and item 45 on the
FFIEC 031.
o Significant investments in the capital of unconsolidated financial institutions in the
form of common stock reported in Schedule RC, item 5, that are subject to the
10 percent and 15 percent common equity tier 1 capital threshold limitations and
have been deducted for risk-based capital purposes in Schedule RC-R, Part I,
items 13.b and 16, column B, on the FFIEC 031.
Also include in column B the fair value of any unsettled transactions (failed trades) that
are reported as trading assets in Schedule RC, item 5. For purposes of risk weighting,
unsettled transactions are to be reported in Schedule RC-R, Part II, item 22.
•
In column C–0% risk weight, if the bank completes Schedule RC-D, include the fair value
of those trading assets reported in Schedule RC-D that do not qualify as securitization
exposures that qualify for the zero percent risk weight. Such trading assets may include
portions of, but may not be limited to:
o Item 1, "U.S. Treasury securities,"
o The portion of the amount reported in item 2 that represents the fair value of
securities issued by U.S. Government agencies, and
o The portion of the amounts reported in item 4 that represents the fair value of
mortgage-backed securities (MBS) guaranteed by GNMA.
o If the bank does not complete Schedule RC-D, include the portion of the amount
reported in Schedule RC, item 5, that represents the fair value of the preceding types
of securities. 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 G–20% risk weight, if the bank completes Schedule RC-D, include the fair
value of those trading assets reported in Schedule RC-D that do not qualify as
securitization exposures that qualify for the 20 percent risk weight. Such trading assets
may include portions of, but may not be limited to:
o The portion of the amount reported in item 2 that represents the fair value of
securities issued by U.S. Government-sponsored agencies,
o The portion of the amount reported in item 3 that represents the fair value of general
obligations issued by states and political subdivisions in the United States,
o The portion of the amount reported in item 4 that represents the fair value of MBS
issued by FNMA and FHLMC,
FFIEC 031 and 041
RC-R-114
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
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.
•
In column B for all institutions, include the amount of:
○ Any goodwill reported in Schedule RC-M, item 2.b, without regard to any associated
DTLs;
○ 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;
○ 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;
○ 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);
and
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.
○ 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.
•
In column B for non-advanced approaches institutions, also include the amount of:
○ 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.a, item 24, and item 45 on the FFIEC 031; item 13,
item 24, and item 45 on the FFIEC 041; and
o Items subject to the 25 percent common equity tier 1 capital threshold limitation
that have been deducted for risk-based capital purposes in Schedule RC-R, Part I,
items 13.a, 14.a, and 15.a on the FFIEC 031; items 13 through 15 on the FFIEC 041.
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.
FFIEC 031 and 041
RC-R-119
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
•
In column B for advanced approaches institutions, also include the amount of:
○ Non-significant 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 11, item 24, and item 45 on the FFIEC 031;
o Significant investments in the capital of unconsolidated financial institutions not in the
form of common stock that are reported in Schedule RC, item 8 or item 11, and have
been deducted from capital in Schedule RC-R, Part I, item 24 and item 45 on the
FFIEC 031; and
o Items subject to the 10 percent and 15 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.b, 14.b, 15.b, and 16 on the FFIEC 031. These
excess amounts pertain to three items:
Significant investments in the capital of unconsolidated financial institutions in the
form of common stock;
MSAs; and
DTAs arising from temporary differences that could not be realized through net
operating loss carrybacks, net of related valuation allowances.
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 031 and 041
RC-R-120
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
Report as a negative number in column B the amount of default fund contributions in the
form of commitments made by a clearing member to a central counterparty’s mutualized
loss-sharing arrangement.
•
FFIEC 031 and 041
In column C–0% risk weight, include:
○ The carrying value of Federal Reserve Bank stock included in Schedule RC-F,
item 4;
RC-R-120a
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
○
8
(cont.)
o
o
○
Accrued interest receivable on assets included in the zero percent risk weight
category (column C of Schedule RC-R, Part II, items 1 through 7);
The carrying value of gold bullion not held for trading that is held in the bank's own
vault or in another bank's vault on an allocated basis, and exposures that arise from
the settlement of cash transactions (such as equities, fixed income, spot foreign
exchange, and spot commodities) with a central counterparty where there is no
assumption of ongoing credit risk by the central counterparty after settlement of the
trade and associated default fund contributions;
The carrying value of assets purchased through the Money Market Mutual Fund
Liquidity Facility that are reported in Schedule RC, item 11; and
The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the zero percent risk weight. This
would include the portion of these assets collateralized by deposits in the reporting
institution.
•
In column G–20% risk weight, include:
○ The carrying value of Federal Home Loan Bank stock included in Schedule RC-F,
item 4;
○ Accrued interest receivable on assets included in the 20 percent risk weight category
(column G of Schedule RC-R, Part II, items 1 through 7);
o The portion of customers' acceptance liability reported in Schedule RC, item 11, that
has been participated to other depository institutions; and
o The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the 20 percent risk weight. This would
include the portion of these assets covered by FDIC loss-sharing agreements.
•
In column H–50% risk weight, include accrued interest receivable on assets included
in the 50 percent risk weight category (column H of Schedule RC-R, Part II, items 1
through 7). Also include the portion of assets reported in Schedule RC, items 6 through
11, that is secured by collateral or has a guarantee that qualifies for the 50 percent risk
weight.
•
In column I–100% risk weight, include:
o Accrued interest receivable on assets included in the 100 percent risk weight
category (column I of Schedule RC-R, Part II, items 1 through 7);
o Publicly traded and not publicly traded equity exposures, equity exposures without
readily determinable fair values, and equity exposures to investment funds, to the
extent that the aggregate carrying value of the bank’s equity exposures does not
exceed 10 percent of total capital. If the bank’s aggregate carrying value of equity
exposures is greater than 10 percent of total capital, the bank must report its equity
exposures reported in Schedule RC, items 6 through 11, in either columns L, M, or N,
as appropriate;
○ The portion of assets reported in Schedule RC, items 6 through 11, that is secured by
collateral or has a guarantee that qualifies for the 100 percent risk weight; and
o The amount of all other assets reported in column A that is not included in columns C
through H, J through N, or R.
•
In column J–150% risk weight, include accrued interest receivable on assets included in
the 150 percent risk weight category (column J of Schedule RC-R, Part II, items 1
through 7). Also include the portion of assets reported in Schedule RC, items 6 through
11, that is secured by collateral or has a guarantee that qualifies for the 150 percent risk
weight.
FFIEC 031 and 041
RC-R-121
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
RC-R – REGULATORY CAPITAL
Part II. (cont.)
Item No.
Caption and Instructions
8
(cont.)
•
In column K–250% risk weight, include the amounts of items that do not exceed the
applicable common equity tier 1 capital deduction thresholds and are included in capital,
as described in §.22 of the regulatory capital rules. These amounts pertain to three
items:
o Significant investments in the capital of unconsolidated financial institutions in the
form of common stock (for advanced approaches institutions only);
○ MSAs (for all institutions); and
○ DTAs arising from temporary differences that could not be realized through net
operating loss carrybacks, net of related valuation allowances (for all institutions).
•
In column L–300% risk weight, include the fair value of publicly traded equity securities
with readily determinable fair values that are reported in Schedule RC, items 8 and 9.
•
In column M–400% risk weight, include the historical cost of equity securities (other than
those issued by investment firms) that do not have readily determinable fair values that
are reported in Schedule RC-F, item 4.
•
In column N–600% risk weight, include the historical cost of equity securities issued by
investment firms that do not have readily determinable fair values that are reported in
Schedule RC-F, item 4.
•
In columns R and S of item 8–Application of Other Risk-Weighting Approaches, include the
portion of any asset reported in Schedule RC, items 6 through 11 (except separate account
bank-owned life insurance and default fund contributions to central counterparties, which are
to be reported in columns R and S of items 8.a and 8.b, respectively), that is secured by
qualifying financial collateral that meets the definition of a securitization exposure in §.2 of the
regulatory capital rules or is a mutual fund only if the bank chooses to recognize the 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.
o Include in column R the carrying value of the portion of an asset that is secured by
the fair value of securitization exposure or mutual fund collateral that meets the
general requirements of the Simple Approach in §.37. In addition, the bank must
apply the same approach to securitization exposure collateral – either the Simplified
Supervisory Formula Approach or the Gross-up Approach – that it applies to
determine the risk-weighted asset amounts of its on- and off-balance sheet
securitization exposures that are reported in Schedule RC-R, Part II, items 9 and 10.
o Report in column S the risk-weighted asset amount of the securitization exposure or
mutual fund collateral that collateralizes the portion of the asset secured by such
collateral. Any remaining portion of the asset that is uncollateralized or collateralized
by other qualifying collateral would be reported in columns C through J.
For further information, see the discussions of “Treatment of Collateral and Guarantees”
and “Risk-Weighted Assets for Securitization Exposures” in the General Instructions for
Schedule RC-R, Part II.
FFIEC 031 and 041
RC-R-122
(3-21)
RC-R – REGULATORY CAPITAL
FFIEC 031 and 041
GLOSSARY
Allowance for Credit Losses (cont.):
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.”
Recoveries on financial assets measured at amortized cost represent collections on amounts that were
previously charged off against the related ACL. Recoveries shall be credited to the ACL, provided that
the total amount credited to the ACL as recoveries on a financial asset (which may include amounts
representing principal, interest, and fees) is limited to the amount previously charged off against the
ACL on that financial asset. Any amounts collected in excess of this limit should generally be
recognized as noninterest income upon collection.
Charge-Offs and Establishment of a New Amortized Cost Basis – When an institution makes a full or
partial charge-off of a financial asset measured at amortized cost that is deemed uncollectible, the
institution establishes a new cost basis for that financial asset. Consequently, once a new cost basis
has been established for a financial asset through a charge-off, this amortized cost basis may not be
directly "written up" at a later date. Reversing the previous charge-off and "re-booking" the charged-off
asset after the institution concludes that the prospects for recovering the charge-off have improved,
regardless of whether the institution assigns a new account number to the asset or the borrower signs
a new note, is not an acceptable accounting practice. Nevertheless, as stated above, management’s
estimate of the net amount expected to be collected for a financial asset, as reflected in the related
ACL, considers expected recoveries.
FFIEC 031 and 041
A-7
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Allowance for Credit Losses (cont.):
If losses charged off against an ACL exceed the amount of the ACL, a provision expense sufficient to
restore the ACL to an appropriate level must be charged to a provision for credit losses on the income
statement during the reporting period in which the charge-off is recorded. An institution shall not
increase an ACL by transferring an amount from retained earnings or any segregation thereof to the
ACL.
Collateral-Dependent Financial Assets – A collateral-dependent financial asset is a financial asset for
which repayment is expected to be provided substantially through the operation or sale of the collateral
when the borrower, based on management’s assessment, is experiencing financial difficulty as of the
reporting date.
For purposes of these reports, the ACL for a collateral-dependent loan is measured using the fair value
of collateral, regardless of whether foreclosure is probable. This application of this requirement for
purposes of these reports is limited to collateral-dependent loans; it does not apply to other financial
assets such as held-to-maturity debt securities that are collateral dependent.
When estimating the ACL for a collateral-dependent loan, the fair value of collateral should be adjusted
to consider estimated costs to sell if repayment or satisfaction of the loan depends on the sale of the
collateral. ACL adjustments for estimated costs to sell are not appropriate when the repayment of a
collateral-dependent loan is expected from the operation of the collateral.
The fair value of collateral securing a collateral-dependent loan may change over time. If the fair value
of the collateral as of the ACL evaluation date has decreased since the previous ACL evaluation date,
the ACL should be increased to reflect the additional decrease in the fair value of the collateral.
Likewise, if the fair value of the collateral has increased as of the ACL evaluation date, the increase in
the fair value of the collateral is reflected through a reduction in the ACL. Any negative ACL that
results is capped at the amount previously charged off. In general, any portion of the amortized cost
basis in excess of the fair value of collateral less estimated costs to sell, if applicable, that can be
identified as uncollectible should be promptly charged off against the ACL.
Financial Assets with Collateral Maintenance Agreements – Institutions may have financial assets that
are secured by collateral (such as debt securities) and are subject to collateral maintenance
agreements requiring the borrower to continuously replenish the amount of collateral securing the
asset. If the fair value of the collateral declines, the borrower is required to provide additional collateral
as specified by the agreement.
ASC Topic 326 includes a practical expedient for financial assets with collateral maintenance
agreements where the borrower is required to provide collateral greater than or equal to the amortized
cost basis of the asset and is expected to continuously replenish the collateral. In those cases, the
institution may elect the collateral maintenance practical expedient and measure expected credit losses
for these qualifying assets based on the fair value of the collateral. If the fair value of the collateral is
greater than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the institution may record an ACL of zero for the financial asset when
the collateral maintenance practical expedient is applied. Similarly, if the fair value of the collateral is
less than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the ACL is limited to the difference between the fair value of the
collateral and the amortized cost basis of the asset as of the reporting date when applying the collateral
maintenance practical expedient.
Off-Balance-Sheet Credit Exposures – Each institution should also estimate, as a separate liability
account, expected credit losses for off-balance-sheet credit exposures not accounted for as insurance,
over the contractual period during which the institution is exposed to credit risk. The estimate of
expected credit losses should take into consideration the likelihood that funding will occur as well as
FFIEC 031 and 041
A-8
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
(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.
(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.
FFIEC 031 and 041
A-33
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
NOW accounts, as authorized by federal law, are limited to accounts held by:
(i)
Individuals or sole proprietorships;
(ii)
Organizations that are operated primarily for religious, philanthropic, charitable,
educational, or other similar purposes and that are not operated for profit. These
include organizations, partnerships, corporations, or associations that are not
organized for profit and are described in section 501(c)(3) through (13) and (19)
and section 528 of the Internal Revenue Code, such as church organizations;
professional associations; trade associations; labor unions; fraternities, sororities
and similar social organizations; and nonprofit recreational clubs; or
(iii) Governmental units including the federal government and its agencies and
instrumentalities; state governments; county and municipal governments and their
political subdivisions; the District of Columbia; the Commonwealth of Puerto Rico,
American Samoa, Guam, and any territory or possession of the United States and
their political subdivisions.
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:
FFIEC 031 and 041
A-34
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
(i) Deposits or accounts maintained in connection with an arrangement that permits
the depositor to obtain credit directly or indirectly through the drawing of a
negotiable or nonnegotiable check, draft, order or instruction or other similar
device (including telephone or electronic order or instruction) on the issuing
institution that can be used for the purpose of making payments or transfers to third
parties or others, or to another deposit account of the depositor.
(ii)
The balance of deposits or accounts that otherwise meet the definition of time
deposits, but from which payments may be made to third parties by means of a
debit card, an automated teller machine, remote service unit or other electronic
device, regardless of the number of payments made.
(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, (Part I,) 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.
FFIEC 031 and 041
A-35
(3-21)
GLOSSARY
FFIEC 031 and 041
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.
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.
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).
FFIEC 031 and 041
A-36
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
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
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.
FFIEC 031 and 041
A-37
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
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.
(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.
FFIEC 031 and 041
A-38
(3-21)
GLOSSARY
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FFIEC 031 and 041
A-39
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Deposits (cont.):
See also "Brokered Deposits" and "Hypothecated Deposits."
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.
FFIEC 031 and 041
A-40
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Foreclosed Assets (cont.):
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
evaluating whether collectability of an amount of consideration is probable, an institution shall
consider only the buyer’s ability and intention to pay that amount of consideration when it is due.
These five criteria require careful analysis for seller-financed sales of OREO. In particular, criteria (a)
and (e) may require significant judgment. When determining whether the buyer is committed to
perform its obligations under criterion (a) and collectability under criterion (e), a selling institution
should consider all facts and circumstances related to the buyer’s ability and intent to pay the
transaction price, which may include:
•
•
•
•
•
•
•
•
•
•
•
•
Amount of cash paid as a down payment;
Existence of recourse provisions;
Credit standing of the buyer;
Age and location of the property;
Cash flow from the property;
Payments by the buyer to third parties;
Other amounts paid to the selling institution, including current or future contingent payments;
Transfer of noncustomary consideration (i.e., consideration other than cash and a note receivable);
Other types of financing involved with the property or transaction;
Financing terms of the loan (reasonable and customary terms, amortization, any graduated
payments, any balloon payment);
Underwriting inconsistent with the institution’s underwriting policies for loans not involving OREO
sales; and
Future subordination of the selling institution’s receivable.
Although ASC Subtopic 610-20 does not include the prescriptive minimum down payment
requirements in ASC Subtopic 360-20, the amount and character of a buyer’s equity (typically the down
payment) and recourse provisions remain important factors when evaluating criteria (a) and (e).
Specifically, the buyer’s initial equity in the property immediately after the sale is an important
consideration in determining whether a buyer is committed to perform its obligations under criterion (a).
Furthermore, the buyer’s initial equity is a factor to consider under criterion (e) when evaluating the
collectability of consideration that the institution is entitled to receive from the buyer.
FFIEC 031 and 041
A-59
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Foreclosed Assets (cont.):
In applying the revenue recognition principles in ASC Topic 606, all relevant factors are to be weighed
collectively in evaluating whether the five contract criteria have been met as the first step in
determining the appropriate accounting for a seller-financed OREO transaction. However, the
agencies consider the down payment and financing terms to be of particular importance when making
this determination. A transaction with an insignificant down payment and nonrecourse financing
generally would not meet the definition of a contract (within the meaning of Topic 606) unless there is
considerable support from other factors. The need for support from other factors recedes in
importance for a transaction with a substantial down payment and recourse financing to a buyer with
adequate capacity to repay.
If the five contract criteria in ASC Topic 606 have not been met, the institution generally may not
derecognize the OREO asset or recognize revenue (gain or loss) as an accounting sale has not
occurred. The institution should continue to assess the transaction to determine whether the contract
criteria have been met in a later period. Until that time, any consideration the institution has received
from the buyer should generally be recorded as a deposit liability. In addition, if the transaction price is
less than the carrying amount of the OREO, the institution should consider whether this indicates a
decline in fair value of the OREO that should be recognized as a valuation allowance, or an increase in
an existing valuation allowance, and through a charge to expense as discussed above in this Glossary
entry.
If an institution determines the contract criteria in ASC Topic 606 have been met, it must then
determine whether it has satisfied its performance obligations as identified in the contract by
transferring control of the asset to the buyer. Control of an asset refers to the ability to direct the use
of, and obtain substantially all of the remaining benefits from, the asset. As it relates to an institution’s
sale of OREO, ASC Topic 606 includes the following indicators of the transfer of control:
(a)
(b)
(c)
(d)
(e)
The institution has a present right to payment for the asset;
The buyer has legal title to the asset;
The institution has transferred physical possession of the asset;
The buyer has the significant risks and rewards of ownership of the asset; and
The buyer has accepted the asset.
For seller-financed sales of OREO, the transfer of control generally occurs on the closing date of the
sale when the institution obtains the right to receive payment for the property and transfers legal title to
the buyer. However, an institution must consider all relevant facts and circumstances to determine
whether control of the OREO has transferred, which may include the selling institution’s:
•
•
•
•
Involvement with the property following the transaction;
Obligation to repurchase the property in the future;
Obligation to provide support for the property following the sale transaction; and
Retention of an equity interest in the property.
In particular, if an institution has the obligation or right to repurchase the OREO, the buyer does not
obtain control of the OREO because the buyer is limited in its ability to direct the use of, and obtain
substantially all of the remaining benefits from, the asset even though it may have physical possession.
In this situation, an institution should account for the contract as either (1) a lease in accordance with
ASC Topic 840, Leases, or ASC Topic 842, Leases, as applicable, or (2) a financing arrangement in
accordance with ASC Topic 606. In addition, situations may exist where the selling institution has legal
title to the OREO, while the borrower whose property was foreclosed upon under the original loan still
has redemption rights to reclaim the property in the future. If such redemption rights exist, the selling
institution may not be able to transfer control to the buyer of the OREO and recognize revenue until the
redemption period expires.
FFIEC 031 and 041
A-60
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
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.
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."
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.
FFIEC 031 and 041
A-93
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GLOSSARY
FFIEC 031 and 041
GLOSSARY
Nonaccrual Status (cont.):
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."
(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.”
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
FFIEC 031 and 041
A-94
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GLOSSARY
FFIEC 031 and 041
GLOSSARY
Nonaccrual Status (cont.):
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.3 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.
3
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, 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.
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FFIEC 031 and 041
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 031 and 041
A-95
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Nonaccrual Status (cont.):
Until the restructured asset is restored to accrual status, if ever, cash payments received must be
treated in accordance with the criteria stated above in the preceding section of this entry. In addition,
after a formal restructuring, if a restructured asset that has been returned to accrual status later meets
the criteria for placement in nonaccrual status as a result of past due status based on its modified
terms or for any other reasons, the asset must be placed in nonaccrual status.
For further information on formally restructured assets, see the Glossary entry for "Troubled Debt
Restructurings."
Treatment of multiple extensions of credit to one borrower – As a general principle, nonaccrual status
for an asset should be determined based on an assessment of the individual asset's collectability and
payment ability and performance. Thus, when one loan to a borrower is placed in nonaccrual status, a
bank does not automatically have to place all other extensions of credit to that borrower in nonaccrual
status. When a bank has multiple loans or other extensions of credit outstanding to a single borrower,
and one loan meets the criteria for nonaccrual status, the bank should evaluate its other extensions of
credit to that borrower to determine whether one or more of these other assets should also be placed in
nonaccrual status.
Noninterest-Bearing Account: See "Deposits."
Nontransaction Account: See "Deposits."
NOW Account: See "Deposits."
Offsetting: Offsetting is the reporting of assets and liabilities on a net basis in the balance sheet. Banks
are permitted to offset assets and liabilities recognized in the Consolidated Report of Condition when a
"right of setoff" exists. Under ASC Subtopic 210-20, Balance Sheet – Offsetting, a right of setoff exists
when all of the following conditions are met:
(1) Each of two parties owes the other determinable amounts. Thus, only bilateral netting is
permitted.
FFIEC 031 and 041
A-96
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Private Company: A private company is a business entity that is not a public business entity. For further
information, see the Glossary entry for “Public Business Entity.”
Public Business Entity: Accounting Standards Update No. 2013-12, “Definition of a Public Business
Entity,” added this term to the Master Glossary in the Accounting Standards Codification. The
definition states that a business entity, such as bank or savings association, that meets any one of five
specified criteria is a public business entity for reporting purposes under U.S. GAAP. This also applies
for Call Report purposes. In contrast, a private company is a business entity that is not a public
business entity. An institution that is a public business entity is not permitted to apply private company
accounting alternatives when preparing its Call Report.
As defined in the ASC Master Glossary, a business entity is a public business entity if it meets any one
of the following criteria:
•
•
•
•
•
It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial
statements, or does file or furnish financial statements (including voluntary filers), with the SEC
(including other entities whose financial statements or financial information are required to be or
are included in a filing).
It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations
promulgated under the Act, to file or furnish financial statements with a regulatory agency other
than the SEC (such as one of the federal banking agencies).
It is required to file or furnish financial statements with a foreign or domestic regulatory agency in
preparation for the sale of or for purposes of issuing securities that are not subject to contractual
restrictions on transfer.
It has issued debt or equity securities that are traded, listed, or quoted on an exchange or an overthe-counter market, which includes an interdealer quotation or trading system for securities not
listed on an exchange (for example, OTC Markets Group, Inc., including the OTC Pink Markets, or
the OTC Bulletin Board).
It has one or more securities that are not subject to contractual restrictions on transfer, and it is
required by law, contract, or regulation to prepare U.S. GAAP financial statements (including
footnotes) and make them publicly available on a periodic basis (for example, interim or annual
periods). An entity must meet both of these conditions to meet this criterion.
The Master Glossary also explains that if an entity meets the definition of a public business entity solely
because its financial statements or financial information is included in another entity’s filing with the
SEC, the entity is only a public business entity for purposes of financial statements that are filed or
furnished with the SEC, but not for other reporting purposes or for Call Report purposes.
If a bank or savings association does not meet any one of the first four criteria, it would need to
consider whether it meets both of the conditions included in the fifth criterion to determine whether it
would be a public business entity. With respect to the first condition under the fifth criterion, a stock
institution must determine whether it has a class of securities not subject to contractual restrictions on
transfer, which the FASB has stated means that the securities are not subject to management
preapproval on resale. A contractual management preapproval requirement that lacks substance
would raise questions about whether the stock institution meets this first condition.
If an institution is a wholly owned subsidiary of a holding company, an implicit contractual restriction on
transfer is presumed to exist on the institution’s common stock; therefore, if the institution has issued
no other debt or equity securities, the institution would not meet the first condition of the fifth criterion.
A mutual institution that has issued no debt securities also does not meet the first condition of the fifth
criterion. In all other scenarios (e.g., a closely-held bank or a Subchapter S bank that is not a wholly
owned subsidiary of a holding company), an institution should assess whether contractual restrictions
on transfer exist on its securities based on its individual facts and circumstances.
FFIEC 031 and 041
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GLOSSARY
FFIEC 031 and 041
GLOSSARY
Public Business Entity (cont.):
With respect to the second condition under the fifth criterion, an insured depository institution with
$500 million or more in total assets as of the beginning of its fiscal year is required by Section 36 of the
Federal Deposit Insurance Act and Part 363 of the FDIC’s regulations, “Annual Independent Audits and
Reporting Requirements,” to prepare and make publicly available audited annual U.S. GAAP financial
statements. In certain circumstances, an insured depository institution with $500 million or more in
total assets that is a subsidiary of a holding company may choose to satisfy this annual financial
statement requirement at a holding company level rather than at the institution level. An insured
depository institution of this size that satisfies the financial statement requirement of Section 36 and
Part 363 at either the institution level or the holding company level would meet the fifth criterion’s
second condition.
Purchase Acquisition: See "Business Combinations."
Purchased Credit-Deteriorated Assets: This Glossary entry applies to institutions that have adopted
ASC Topic 326, Financial Instruments–Credit Losses. Institutions that have not adopted ASC
Topic 326 should continue to refer to the Glossary entry for “Purchased Credit-Impaired Loans and
Debt Securities.”
Purchased credit-deteriorated (PCD) assets are acquired financial assets that, at acquisition, have
experienced a more-than-insignificant deterioration in credit quality since origination, as determined by
an acquirer’s assessment.
In accordance with ASC Topic 326, institutions are required to estimate and record an allowance for
credit losses (ACL) for PCD assets at the time of purchase. This acquisition date ACL is added to the
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
FFIEC 031 and 041
A-102
(3-21)
GLOSSARY
FFIEC 031 and 041
GLOSSARY
Purchased Credit-Deteriorated Assets (cont.):
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.
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 refer to
the Glossary entry for “Nonaccrual Status” and ASC Subtopic 310-10.
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
FFIEC 031 and 041
A-102a
(3-21)
GLOSSARY
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| File Type | application/pdf |
| File Modified | 2021-04-16 |
| File Created | 2021-04-15 |