FFIEC002_202406_i_draft

Draft Instructions for FFIEC 002 Revisions
Proposed to Take Effect Beginning
with the June 30, 2024, Report Date

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The following draft instructions, which are subject to change,
presents the pages from the FFIEC 002 instructions as it is
proposed to be revised, subject to final approval by the Office of
Management and Budget.

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These proposed revisions are described in the federal banking
agencies’ initial Paperwork Reduction Act (PRA) Federal
Register notices published in the Federal Register on September
28, 2023 (see FIL-53-2023, dated October 2, 2023) and on
December 27, 2023 (see FFIEC 002 December 2023 Letter,
dated December 27, 2023). As discussed in the agencies’ final
PRA Federal Register notice published in the Federal Register on
May 22, 2024, the agencies are proceeding with the revisions to
the FFIEC 002, with certain modifications.

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The final PRA Federal Register notice and draft redlined reporting
form for these proposed revisions to the FFIEC 002 are available
on the FFIEC webpage for the FFIEC 002.

Draft as of June 25, 2024
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Table of Contents
Impacted Items/ Instructions/ Entry

Pages

Effective June 30, 2024:
A. ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326):
Troubled Debt Restructurings and Vintage Disclosures
1. Schedule C, Loans and Leases, General Instructions
2. Schedule N, Past Due, Nonaccrual, and Restructured Loans,
General Instructions
3. Glossary, Loan Fees
4. Glossary, Loan Modifications to Borrowers Experiencing Financial
Difficulty
5. Glossary, Nonaccrual Status

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Effective December 31, 2024:
B. Loans to Nondepository Financial Institutions
1. Schedule C, Loans and Leases, Item 2
2. Schedule C, Loans and Leases, Item 2(b)
3. Schedule C, Loans and Leases, Item 3
4. Schedule C, Loans and Leases, Item 4
5. Schedule C, Loans and Leases, Item 7*
6. Schedule C, Loans and Leases, Item 8

14-15
16
17-19
20
21-22
22-24

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4-8
9-10

*Updated June 25, 2024, in response to comment letter received on final 30-day Federal Register notice.

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Schedule C

Refer to the Glossary entry for
"Loan Modifications to Borrowers
Experiencing Financial Difficulty"
and Call Report Glossary entry for
"Foreclosed Assets" for further
discussion on these topics.

report all loans secured by real estate. Include all loans
(other than those to states and political subdivisions in
the U.S.), regardless of purpose and regardless of
whether originated by the bank or purchased from others, that are secured by real estate as evidenced by
mortgages, deeds of trust, land contracts, or other
instruments, whether first or junior liens (e.g., equity
loans, second mortgages) on real estate. See the Glossary entry for “loans secured by real estate” for the
definition of this term.

tial satisfaction of a loan or lease (unless the asset
received is itself reportable as a loan or lease) and any
loans for which the branch or agency has obtained
physical possession of the underlying collateral,
regardless of whether formal foreclosure or repossession proceedings have been instituted against the
borrower.

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Refer to the Glossary entry for “transfers of financial
assets” for a detailed discussion of this topic.
Exclude, for purposes of this schedule, the following:

Include as loans secured by real estate:

(1) all loans of immediately available funds that
mature in one business day or roll over under a
continuing contract, i.e., federal funds sold
(report in Schedule RAL, item 1(d), “Federal
funds sold and securities purchased under agreements to resell”);

(1) Loans secured by residential properties that are
guaranteed by the Farmers Home Administration
(FmHA) and extended, collected, and serviced by
a party other than the FmHA.
(2) Loans secured by properties and guaranteed by
governmental entities in foreign countries.

(2) all holdings of commercial paper (report in
Schedule RAL, item 1(c), “Other bonds, notes,
debentures, and corporate stock,” if held for purposes other than trading);

(3) Participations in pools of Federal Housing
Administration (FHA) Title I home improvement
loans that are secured by liens (generally, junior
liens) on residential properties.

(3) interest earned not collected on loans (report in
Schedule RAL, item 1(h), “Other assets including
other claims on nonrelated parties”);

Exclude from loans secured by real estate:

(1) Loans to real estate companies, real estate investment trusts, mortgage lenders, and foreign nongovernmental entities that specialize in mortgage
loan originations and that service mortgages for
other lending institutions when the real estate
mortgages or similar liens on real estate are not
sold to the branch or agency but are merely
pledged as collateral (report in Schedule C, part I,
item 2, Loans to depository institutions and
acceptances of other banks,” or as all other loans
in Schedule C, part I, item 8).

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(4) contracts of sale or other loans indirectly representing other real estate (report in Schedule RAL,
item 1(h), “Other assets including other claims on
nonrelated parties”);

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(5) undisbursed loan funds, sometimes referred to as
incomplete loans or loans in process, unless the
borrower is liable for and pays the interest
thereon. If interest is being paid by the borrower
on the undisbursed proceeds, the amounts of
such undisbursed funds should be included in
both loans and deposits;

(2) Bonds issued by the Federal National Mortgage
Association or by the Federal Home Loan Mortgage Corporation that are collateralized by residential mortgages.

(6) loan commitments that have not yet been taken
down, even if fees have been paid; see Schedule L,
item 1; and

(3) Pooled residential mortgages for which participation certificates have been issued or guaranteed
by the Government National Mortgage Association, the Federal National Mortgage Association,
or the Federal Home Loan Mortgage Corporation. However, if the reporting branch or agency
is the seller-servicer of the residential mortgages
backing such securities and, as a result of a

(7) loans and leases held for trading (report in Schedule RAL, item 1(f), “Trading assets”).

Item Instructions for Part I
Item 1 Loans secured by real estate.
In column A, report in the appropriate subitem all
loans secured by real estate. In column B, IBFs are to
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FFIEC 002

INSTRUCTIONS FOR THE PREPARATION OF

Past Due, Nonaccrual, and
Restructured Loans
Schedule N

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modified to borrowers
experiencing financial
difficulty

General Instructions

(1) Closed-end installment loans, amortizing loans
secured by real estate, and any other loans and
lease financing receivables with payments scheduled monthly are to be reported as past due when
the borrower is in arrears two or more monthly
payments. (Branches or agencies may use 30 days
as a proxy for a month if they prefer.) Other multipayment obligations with payments scheduled
other than monthly are to be reported as past due
when one scheduled payment is due and unpaid
for 30 days or more.

Report all loans, including lease financing receivables,
that are past due, are in nonaccrual status, or have been
restructured because of a deterioration in the financial
position of the obligor. All such loans and lease financing receivables held in the reporting branch or agency
and its IBF should be distributed by category and
reported net of any specific reserves. Institutions
should report financial assets without any deductions
for any applicable allowance for credit losses. Loan
amounts should be reported net of unearned income
to the extent that the same categories of loans are
reported net of unearned income in Schedule C.
Report the full outstanding balances of past due, nonaccrual, and restructured loans and lease financing
receivables, as reported for purposes of Schedule C,
not simply the delinquent payments.

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(2) Open-end credit such as charge-card plans, check
credit, and other revolving credit plans are to be
reported as past due when the customer has not
made the minimum payment for two or more billing cycles.
(3) Single payment and demand notes providing for
the payment of interest at stated intervals are to
be reported as past due after one interest payment
is due and unpaid for 30 days or more.

Exclude interest earned but not collected on loans
(report in Schedule RAL, item 1(h), “Other assets
including other claims on nonrelated parties”).

(4) Single payment notes providing for the payment
of interest at maturity are to be reported as past
due after maturity if interest or principal remains
unpaid for 30 days or more.

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NOTE: Exclude all transactions of the branch or
agency, including its IBF, with related depository institutions (report in Schedule M). However, include
transactions with related nondepository institutions.

(5) Unplanned overdrafts are to be reported as past
due if the account remains continuously overdrawn for 30 days or more.

Definitions

For purposes of this schedule, branches or agencies
should use one of two methods to recognize partial
payments on “retail credit,” i.e., open-end and closedend credit extended to individuals for household, family, and other personal expenditures, including consumer loans and credit cards, and loans to individuals
secured by their personal residence, including home
equity and home improvement loans. A payment
equivalent to 90 percent or more of the contractual

Past due. For purposes of this schedule, grace periods
allowed by the branch or agency, including its IBF,
after a loan technically has become past due, but before
the imposition of late charges, are not to be taken into
account in determining past due status. Furthermore,
loans and lease financing receivables are to be reported
as past due when either interest or principal is unpaid
in the following circumstances:
FFIEC 002

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Schedule N

accrued interest) in full, or (2) by the guarantee of a
financially responsible party. A debt is “in the process
of collection” if collection of the debt is proceeding in
due course either (1) through legal action, including
judgment enforcement procedures, or (2) in appropriate circumstances, through collection efforts not
involving legal action which are reasonably expected to
result in repayment of the debt or in its restoration to a
current status in the near future.

payment may be considered a full payment in computing delinquency. Alternatively, a branch or agency may
aggregate payments and give credit for any partial payment received. For example, if a regular monthly
installment is $300 and the borrower makes payments
of only $150 per month for a six-month period, the
loan would be $900 ($150 shortage times six payments), or three monthly payments past due. A branch
or agency may use either or both methods for its retail
credit but may not use both methods simultaneously
with a single loan.

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For purposes of applying the third test for nonaccrual
status listed above, the date on which a loan reaches
nonaccrual status is determined by its contractual
terms. If the principal or interest on a loan becomes
due and unpaid for 90 days or more on a date that falls
between report dates, the loan should be placed in nonaccrual status as of the date it becomes 90 days past
due and it should remain in nonaccrual status until it
meets the criteria for restoration to accrual status
described below.

Any PCI loan held as of the adoption date of ASC
Topic 326 should prospectively be accounted for as
purchased credit-deteriorated (PCD) loans. As of the
adoption date of the standard, the remaining noncredit discount or premium on a PCD loan, after the
adjustment for the allowance for credit losses, should
be accreted to interest income at the new effective interest rate on the loan, if the loan is not required to be
placed on nonaccrual. For a PCD loan that is not
reported in nonaccrual status, the delinquency status of
the PCD loan should be determined in accordance
with its contractual repayment terms for purposes of
reporting the amortized cost basis of the loan as past
due in Schedule N, column A or B, as appropriate. If
PCD loan 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 ASC Topic 326, 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 credit-deteriorated
assets.”

In the following situations, a loan need not be placed in
nonaccrual status:

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(1) The loan upon which principal or interest is due
and unpaid for 90 days or more is a consumer
loan, or a loan secured by a 1-to-4 family residential property. Nevertheless, such loans should be
subject to other alternative methods of evaluation
to assure that the reporting institution’s net
income is not materially overstated. To the extent
that the reporting institution has elected to carry
such a loan in nonaccrual status on its books, the
loan must be reported as nonaccrual in this
schedule.
(2) Any outstanding PCI loans as of the adoption
date of ASC Topic 326, should prospectively be
accounted for as PCD loans. Any remaining noncredit discount on such loans should be accreted
into interest income at the effective interest rate
on the adoption date of ASC Topic 326 if a loan
is not required to be placed in nonaccrual status.
For PCD loans acquired after the adoption date,
ASC Topic 326 refers to ASC Subtopic 310-10 for
guidance on recognition of interest income. For
PCD loans with common risk characteristics that
a branch or agency chooses to aggregate and
account for as a pool for allowance measurement
purposes under ASC Topic 326, the determination of nonaccrual or accrual status should be

Nonaccrual. For purposes of this schedule, loans and
lease financing receivables are to be reported as being
in nonaccrual status if: (1) they are maintained on a
cash basis because of deterioration in the financial
position of the borrower, (2) payment in full of interest
or principal is not expected, or (3) principal or interest
has been in default for a period of 90 days or more
unless the obligation is both well secured and in the process of collection.
A debt is “well secured” if it is secured (1) by collateral
in the form of liens on or pledges of real or personal
property, including securities, that have a realizable
value sufficient to discharge the debt (including
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FFIEC 002

Schedule N
institution

modified to a borrower
experiencing financial
difficulty

future cash flows) from an unaffiliated third party
(such as another institution or the receiver of a
failed institution), including those that the seller
had maintained in nonaccrual status.

made at the individual loan level, not at the pool
level.
(3) The following criteria are met for a PCD loan,
including a PCD loan that was previously a PCI
loan 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”):

As a general rule, a nonaccrual loan may be restored to
accrual status when (1) none of its principal and interest
is due and unpaid, and the reporting institution expects
repayment of the remaining contractual principal and
interest, or (2) when it otherwise becomes well secured
and in the process of collection. For purposes of meeting the first test for restoration to accrual status, the
reporting institAny remaining noncredit discountution
must have received repayment of the past due principal
and interest unless, as discussed in the Glossary entry for
“nonaccrual status,” (1) the loan has been restructured
in a troubled debt restructuring and qualifies for
accrual status, (2) the loan is a PCD loan and it meets
the two criteria specified in the third situation discussed above in which the loan need not be placed in
nonaccrual status, or (3) the borrower has resumed
paying the full amount of the scheduled contractural
interest and principal payments on a loan that is past
due and in nonaccrual status, even though the loan has
not been brought fully current, and certain repayment
criteria are met. For further information, see the Glossary entry for “nonaccrual status.”

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a. The institution reasonably estimates the timing and amounts of cash flows expected to be
collected, and
Nonaccrual Status

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 institutions or improving
the collateral for resale.

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When a PCD loan that meets the criteria above is not
placed in nonaccrual status, the loan 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 loan is in
nonaccrual or accrual status, an institution is not permitted to accrete the credit-related discount embedded
in the purchase price of such a loan 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 loan 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 loan in nonaccrual status, the
loan must be reported as a nonaccrual asset at its
amortized cost basis in this schedule in 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 ASC Topic 326, 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.”

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Restructured and in compliance with modified terms.
For purposes of this schedule, restructured loans and
leases are those loans and leases whose terms have been
modified, because of a deterioration in the financial
condition of the borrower, to provide for a reduction of
either interest or principal, regardless of whether such
loans and leases are secured or unsecured, regardless of
whether such credits are guaranteed by the government
or by others, and (except as noted in the following
paragraph) regardless of the effective interest rate on
such credits.
Once a loan or lease has been restructured because of
such credit problems, it continues to be considered
restructured until paid in full. However, a restructured
loan or lease that is in compliance with its modified
terms and yields a market rate (i.e., the recorded
amount of the obligation bears an effective interest
rate that at the time of the restructuring is greater than
or equal to the rate that the branch or agency is willing
to accept for a new extension of credit with comparable risk) need not continue to be reported as “restruc-

(4) The criteria for amortization (i.e., accretion of
discount) specified in AICPA Practice Bulletin
No. 6 are met with respect to a loan or other debt
instrument acquired at a discount (because there
is uncertainty as to the amounts or timing of
FFIEC 002

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June 2024
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Schedule N

89 days; single payment and demand notes providing for payment of interest at stated intervals
after one interest payment is due and unpaid for
30 through 89 days; single payment notes providing for payment of interest at maturity, on which
interest or principal remains unpaid for 30
through 89 days after maturity; unplanned overdrafts, whether or not the branch or agency is
accruing interest on them, if the account remains
continuously overdrawn for 30 through 89 days.

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tured and in compliance with modified terms” in calendar years after the year in which the restructuring took
place. A loan extended or renewed at a stated interest
rate equal to the current interest rate for new debt with
similar risk is not considered a restructured loan. Also,
a loan to a purchaser of “other real estate owned” by
the reporting branch or agency for the purpose of
facilitating the disposal of such real estate is not considered a restructured loan. For further information,
see ASC Subtopic 310-40, Receivables—Troubled
Debt Restructurings by Creditors.

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Report as “restructured and in compliance with modified terms” all restructured loans and leases as defined
above that are in compliance with their modified terms,
that is, restructured loans and leases (1) on which no
contractual payments of principal or interest scheduled under the modified repayment terms are due and
unpaid or (2) on which contractual payments of both
principal and interest scheduled under the modified
repayment terms are less than 30 days past due.
Exclude from “restructured and in compliance with
modified terms” all restructured loans secured by
1-to-4 family residential properties and all restructured
loans to individuals for household, family, and other
personal expenditures. (However, any restructured
loans of these two types that subsequently become past
due 30 days or more or are placed in nonaccrual status
should be reported accordingly.)
modified to borrowers
See Insert A experiencing financial
difficulty

Column Instructions

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Institutions should report in columns A and B asset
amounts without any deduction for allowances for
credit losses.

Report in columns A and B of Memoranda item 2 the
fair value, if positive, of all interest rate, foreign
exchange rate, equity, and commodity and other contracts or which a required payment by the branch or
agency’s counter-party is due and unpaid for 30
through 89 days and due and unpaid for 90 days or
more, respectively.
Exclude from columns A and B all loans and lease
financing receivables that are in nonaccrual status and
all loans and leases that are restructured and in compliance with their modified terms.
Report in column C the outstanding balances of loans,
including lease financing receivables, that the branch
or agency, including its IBF, has placed in nonaccrual
status.
Also include in this column all restructured loans and
leases that are in nonaccrual status.
Report in column D the outstanding balances of loans,
including lease financing receivables, that have been
restructured and are in compliance with their modified
terms.

Report in columns A and B (except for Memoranda
item 2) the full outstanding balances (not just delinquent payments) of loans, including lease financing
receivables, that are past due and upon which the
branch or agency, including its IBF, continues to
accrue interest, as follows:

Exclude from column D (1) those restructured loans
and leases on which under the modified repayment
terms either principal or interest is 30 days or more past
due (report in Schedule N, column A or B, as appropriate) and (2) those restructured loans and leases that are
in nonaccrual status under the modified repayment
terms (report in Schedule N, column C).

(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
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June 2024
March

(2) In column B, report the loans, including lease
financing receivables, as specified above on which
payment is due and unpaid for 90 days or more.

NOTE: Columns A, B, C, and D are mutually exclusive. The full outstanding balance of any loan, including any lease financing receivable, should be reported
in no more than one of these four columns. Informa-

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modified to borrowers
experiencing financial
difficulty

FFIEC 002

Insert A

Loan Modifications to Borrowers Experiencing Financial Difficulty
Branches and agencies are required for financial reporting purposes to disclose modifications to borrowers
experiencing financial difficulty if such modifications include principal forgiveness, an interest rate reduction, an
other-than-insignificant payment delay, or a term extension (or a combination thereof).
The amounts reported should include modifications that were accounted for as new loans in addition to
modifications that were accounted for as a continuation of existing loans. Include only loans modified after the
beginning of the fiscal year in which ASU No. 2022-02, “Financial Instruments -Credit Losses (Topic 326):
Troubled Debt Restructurings and Vintage Disclosures,” was adopted.

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For further information, see the Glossary entry for "Loan Modifications to Borrowers Experiencing Financial
Difficulty."

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June 2024

Glossary

with a maturity of more than one business day if
the agreement requires the branch or agency to
resell the identical asset purchased; and

Loan
For purposes of this report, a loan is generally an
extension of credit resulting from direct negotiations
between a lender and a borrower. The reporting branch
or agency may originate a loan by directly negotiating
with a borrower or it may purchase a loan or a portion
of a loan originated by another lender that directly
negotiated with a borrower. The reporting branch or
agency may also sell a loan or a portion of a loan,
regardless of the method by which it acquired the loan.

(9) participations (acquired or held) in a single loan
or in a pool of loans or receivables (see discussion in the Glossary entry for “transfers of
financial assets”).

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See also “loans secured by real estate,” “overdraft,”
and “transfers of financial assets.”

Loans may take the form of promissory notes,
acknowledgments of advance, due bills, invoices, overdrafts, acceptances, and similar written or oral
obligations.

Loan Fees

The accounting standards for nonrefundable fees and
costs associated with lending, committing to lend, and
purchasing a loan or group of loans are set forth in
ASC Subtopic 310-20, Receivables—Nonrefundable
Fees and Other Costs (formerly FASB Statement
No. 91, “Accounting for Nonrefundable Fees and
Costs Associated with Originating or Acquiring Loans
and Initial Direct Costs of Leases”), a summary of
which follows. The statement applies to all types of
loans as well as to debt securities (but not to loans or
debt securities carried at market value if the changes in
market value are included in earnings) and to all types
of lenders. For further information, see ASC Subtopic
310-20. A branch or agency may acquire a loan by
originating the loan (lending) or by acquiring a loan
from a party other than the borrower (purchasing).
Lending, committing to lend, refinancing or restructuring loans, arranging standby letters of credit, syndicating loans, and leasing activities are all considered
“lending activities.” Nonrefundable loan fees paid by
the borrower to the lender may have many different
names, such as origination fees, points, placement fees,
commitment fees, application fees, management fees,
restructuring fees, and syndication fees, but in this
Glossary entry, they are referred to as loan origination
fees, commitment fees, or syndication fees. ASC Subtopic 310-20 applies to both a lender and a purchaser,
and should be applied to individual loan contracts.
Aggregation of similar loans for purposes of recognizing net fees or costs and purchase premiums or discounts is permitted under certain circumstances
specified in ASC Subtopic 310-20 or if the result does
not differ materially from the amount that would have
been recognized on an individual loan-by-loan basis.

Among the extensions of credit reportable as loans in
Schedule C, which covers both loans held for sale and
loans that the reporting branch or agency has the
intent and ability to hold for the foreseeable future or
until maturity or payoff, are:

(1) acceptances of other banks purchased in the
open market, not held for trading;

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(2) acceptances executed by or for the account of
the reporting branch or agency and subsequently
acquired by it through purchase or discount;
(3) customers’ liability to the reporting branch or
agency on drafts paid under letters of credit for
which the branch or agency has not been
reimbursed;

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(4) “advances” and commodity or bill-of-lading
drafts payable upon arrival of goods against
which drawn, for which the reporting branch or
agency has given deposit credit to customers;
(5) paper pledged by the branch or agency whether
for collateral to secure bills payable (e.g., margin
collateral to secure bills rediscounted) or for any
other purpose;
(6) sales of so-called “term federal funds” (i.e., sales
of immediately available funds with a maturity
of more than one business day), other than
those involving security resale agreements;
(7) factored accounts receivable;
(8) loans arising out of the purchase of assets
(other than securities) under resale agreements

FFIEC 002

In general, the statement specifies that:
GL-29

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June 2012

Glossary

(3)

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(4)

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(2)

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(1)

including loan
modifications to
borrowers experiencing
generally by the interest method based on the
Loan origination fees should be deferred and financial difficulty
contractual term of the loan. However, if the
recognized over the life of the related loan as an
branch or agency holds a large number of simiadjustment of yield (interest income). Once a
and 2) the
lar loans for which prepayments are probable
branch or agency adopts ASC Subtopic 310-20,
change in cash
and the timing and amount of prepayments can
recognizing a portion of loan fees as revenue to
flows is more
be reasonably estimated, the branch or agency
offset all or part of origination costs in the
than minor.
may consider estimates of future principal prereporting period in which a loan is originated is
payments in the calculation of the constant
no longer acceptable.
effectiveyield necessary to apply the interest
Certain direct loan origination costs specified in
method. Once a branch or agency adopts ASC
the Statement should be deferred and recogSubtopic 310-20, the practice of recognizing fees
nized over the life of the related loan as a reducover the estimated average life of a group of
tion of the loan’s yield. Loan origination fees
loans is no longer acceptable.
and related direct loan origination costs for a
following exist: 1) the
given loan should be offset and only the net
(6) A refinanced or restructured loan, other than a
amount deferred and amortized.
troubled debt restructuring, should be
accounted for as a new loan if the terms of the
Direct loan origination costs should be offset
new loan are at least as favorable to the lender as
against related commitment fees and the net
the terms for comparable loans to other customamounts deferred except for: (a) commitment
ers with similar collection risks who are not
fees (net of costs) where the likelihood of exerrefinancing or restructuring a loan. Any unamcise of the commitment is remote, which generortized net fees or costs and any prepayment
ally should be recognized as service fee income
penalties from the original loan should be recogon a straight line basis over the loan commitnized in interest income when the new loan is
ment period, and (b) retrospectively determined
granted. If the refinancing or restructuring does
amortized
cost
basis
of
fees, which are recognized as service fee income
not meet these conditions or if only minor
the
refinanced
or
on the date as of which the amount of the fee is
modifications are made to the original loan conrestructured
loan.
determined. All other commitment fees (net of
tract, the unamortized net fees or costs from the
costs) shall be deferred over the entire commitoriginal loan and any prepayment penalties
ment period and recognized as an adjustment of
should be carried forward as a part of the net
yield over the related loan’s life or, if the cominvestment in the new loan. The investment in
mitment expires unexercised, recognized in
the new loan should consist of the remaining net
income upon expiration of the commitment.
investment in the original loan, any additional
Loan syndication fees should be recognized by
amounts loaned, any fees received, and direct
the branch or agency managing a loan syndicaloan origination costs associated with the transtion (the syndicator) when the syndication is
action. In a troubled debt restructuring involvcomplete unless a portion of the syndication
ing a modification of terms, fees received should
loan is retained. If the yield on the portion of
be applied as a reduction of the recorded investthe loan retained by the syndicator is less than
ment in the loan, and all related costs, including
the average yield to the other syndication pardirect loan origination costs, should be charged
ticipants after considering the fees passed
to expense as incurred.
through by the syndicator, the syndicator should
defer a portion of the syndication fee to produce
(7) Deferred net fees or costs shall not be amortized
a yield on the portion of the loan retained that is
during periods in which interest income on a
not less than the average yield on the loans held
loan is not being recognized because of conby the other syndication participants.
cerns about realization of loan principal or
interest.
Loan fees, certain direct loan origination costs,
Direct loan origination costs of a completed loan are
and purchase premiums and discounts on loans
defined to include only (a) incremental direct costs of
shall be recognized as an adjustment of yield

(5)

GL-30
June2024
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June

10

See also the Glossary entry for "Loan
modifications to Borrowers Experiencing
FFIEC 002
Financial Difficulty".

Glossary
See Insert B

when the commitment expires (i.e., fees retrospectively
determined and fees for commitments where exercise is
remote) and (b) syndication fees that are not deferred,
should be included in noninterest income which is recognized as part of unremitted profit and loss.

loan origination incurred in transactions with independent third parties for that particular loan and (b) certain costs directly related to specified activities performed by the lender for that particular loan.
Incremental direct costs are costs to originate a loan
that (a) result directly from and are essential to the
lending transaction andwould not have been incurred
by the lender had that lending transaction not
occurred. The specified activities performed by the
lender are evaluating the prospective borrower’s
financial condition; evaluating and recording guarantees, collateral, and other security arrangements; negotiating loan terms; preparing and processing loan
documents; and closing the transaction. The costs
directly related to those activities include only that portion of the employees’ total compensation and payrollrelated fringe benefits directly related to time spent
performing those activities for that particular loan and
other costs related to those activities that would not
have been incurred but for that particular loan.

Loans Secured by Real Estate

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For purposes of this report, loans secured by real estate
are loans predicated upon a security interest in real
property. A loan predicated upon a security interest in
real property is a loan secured wholly or substantially
by a lien on real property for which the lien is central to
the extension of the credit—that is, the borrower
would not have been extended credit in the same
amount or on terms as favorable without the lien on
real property. All loans satisfying the criteria above are
to be reported as loans secured by real estate (Schedule C, part I, item 1), regardless of whether secured by
first or junior liens, regardless of the department
within the branch or agency that made the loans,
regardless of how the loans are categorized in the
branch or agency’s records, and regardless of the purpose of the financing. Only in transactions where a lien
on real property has been taken as collateral solely
through an abundance of caution and where the terms
as a consequence have not been made more favorable
than they would have been in the absence of the lien,
would the loans not be considered to be secured by real
estate and not be classifiable as loans secured by real
estate in this report.

R

All other lending-related costs, whether or not incremental, should be charged to expense as incurred,
including costs related to activities performed by the
lender for advertising, identifying potential borrowers,
soliciting potential borrowers, servicing existing loans,
and other ancillary activities related to establishing and
monitoring credit policies, supervision, and administration. Employees’ compensation and fringe benefits
related to these activities, unsuccessful loan origination
efforts, and idle time should be charged to expense as
incurred. Administrative costs, rent, depreciation, and
all other occupancy and equipment costs are considered indirect costs and should be charged to expense as
incurred.

D

Money Market Deposit Account (MMDA)
See “deposits.”

Net unamortized loan fees represent an adjustment of
the loan yield, and shall be reported in the same manner as unearned income on loans, i.e., deducted from
the related loan balances (to the extent possible) or
deducted from total loans in “Any unearned income on
loans reflected in items 1–8 above” in Schedule C,
part I. Net unamortized direct loan origination costs
shall be added to the related loan balances in Schedule C. Amounts of loan origination, commitment and
other fees and costs recognized as an adjustment of
yield should be included in interest income which is
recognized as part of unremitted profit and loss. Other
fees, such as (a) commitment fees that are recognized
during the commitment period or included in income

FFIEC 002

NOW Account
See “deposits.”

Nonaccrual Status
Branches and agencies shall not accrue interest or discount on (1) any asset which is maintained on a cash
basis because of deterioration in the financial condition of the borrower, (2) any asset for which payment
in full of interest or principal is not expected, or (3) any
asset upon which principal or interest has been in

11

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Insert B

Loan Modifications to Borrowers Experiencing Financial Difficulty
The accounting standards for loan modifications to borrowers experiencing financial difficulty are set
forth in ASC Topic 326, Financial Instruments - Credit Losses and ASC Topic 310, Receivables. ASC Subtopic 310-10
requires modifications of receivables to borrowers experiencing financial difficulty where the modification results in the form of
principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension (or a
combination thereof) to be disclosed for financial statement purposes. These disclosures only include loan modifications to
borrowers experiencing financial difficulty, regardless of whether the modifications result in new loans or the continuation of
existing loans. Loan modifications to borrowers who are not experiencing financial difficulty or do not meet the definition above
would not be disclosed.

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For reporting purposes, loans modified to borrowers experiencing financial difficulty must be reported in the appropriate loan
category in Schedule C, Part I, items 1 through 8. Additionally, if the loan is in compliance with its modified terms, these
modifications are reported in the appropriate loan category in Schedule N Column D. For loans that
are not in compliance with their modified terms, the loans must be included in the amounts reported in the appropriate loan
category in Schedule N, Columns A through C.
See the Glossary entry for “Nonaccrual Status” for a discussion of the conditions under which a loan on nonaccrual that has
undergone a modification to a borrower experiencing financial difficulty (including those that involve a multiple note structure)
may be returned to accrual status.
Other Considerations:

A modification of a loan in which an institution receives physical possession of the borrower's assets whether in full or partial
satisfaction of the debt should be accounted for in accordance with ASC Subtopic 310-20. Thus, in such situations, the loan
should be treated as if assets have been received in satisfaction of the loan and reported as described in the Call Report
Glossary entry for "Foreclosed Assets."

R

In addition, if a modification of a loan includes both a modification of terms and the acceptance of property in partial satisfaction
of the loan, the accounting for such a modification is a two-step process. First, the amortized cost basis of the loan is reduced
by the fair value (less cost to sell, if appropriate) of the property received, and second, the institution is expected to measure
any expected credit losses on the remaining amortized cost basis of the modified loan in accordance with ASC Subtopic
326-20, “Financial Instruments - Credit Losses - Measured at Amortized Cost” and record any related allowance. If the
modification of terms meets the definition of a loan modification to a borrower experiencing financial difficulty, then include the
loan in the amounts reported on Schedule C Part I or Schedule N, as appropriate.

D

A modification may also involve the substitution or addition of a new debtor for the original borrower. The treatment of these
situations depends upon their substance. Modifications in which the substitute or additional debtor controls, is controlled by, or
is under common control with the original borrower, or performs the custodial function of collecting certain of the original
borrower's funds, should be accounted for as modifications of terms. Modifications in which the substitute or additional debtor
does not have a control or custodial relationship with the original borrower should be accounted for as a receipt of a “new” loan
in full or partial satisfaction of the original borrower's loan. The "new" loan should be recorded at its fair value. If the
modification of terms meets the definition of a loan modification to a borrower experiencing financial difficulty, then include the
loan in the amounts reported on Schedule C Part I or Schedule N, as appropriate.

12

June 2024

Glossary

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 N until it has been
brought fully current or until it later must be
placed in nonaccrual status.

No. 39, “Offsetting of Amounts Related to Certain
Contracts”), a right of setoff exists when all of the following conditions are met:
(1) Each of two parties owes the other determinable
amounts. Thus, only bilateral netting is
permitted.

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(2) The reporting party has the right to set off the
amount owed with the amount owed by the other
party.
(3) The reporting party intends to set off. This condition does not have to be met for fair value
amounts recognized for conditional or exchange
contracts that have been executed with the same
counterparty under a master netting
arrangement.

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.

D

R

(4) The right of setoff is enforceable at law. Legal
constraints should be considered to determine
whether the right of setoff is enforceable. Accordingly, the right of setoff should be upheld in
bankruptcy (or receivership). Offsetting is appropriate only if the available evidence, both positive
and negative, indicates that there is reasonable
assurance that the right of setoff would be upheld
in bankruptcy (or receivership). According to
ASC Subtopic 210-20, for forward, interest rate
swap, currency swap, option, and other conditional and exchange contracts, a master netting
arrangement exists if the reporting branch or
agency has multiple contracts, whether for the
same type of conditional or exchange contract or
for different types of contracts, with a single
counter-party that are subject to a contractual
agreement that provides for the net settlement of
all contracts through a single payment in a single
currency in the event of default or termination of
any one contract. Offsetting the assets and liabilities recognized for conditional or exchange contracts outstanding with a single counterparty
results in the net position between the two counterparties being reported as an asset or a liability
in the Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks. The
reporting entity’s choice to offset or not to offset
assets and liabilities recognized for conditional or
exchange contracts must be applied consistently.
Offsetting of assets and liabilities is also permitted by other accounting pronouncements

Offsetting
Offsetting is the reporting of assets and liabilities on a
net basis in Schedule RAL. Branches and agencies are
permitted to offset assets and liabilities recognized in
the Report of Assets and Liabilities of U.S. Branches
and Agencies of Foreign Banks when a “right of setoff ” exists. Under ASC Subtopic 210-20, Balance
Sheet—Offsettting (formerly FASB Interpretation
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13

FFIEC 002

Schedule C

Exclude loans for nonfarm nonresidential property
construction and land development purposes and
loans secured by vacant lots in established nonfarm
nonresidential sections or in areas set aside primarily
for nonfarm nonresidential properties (report in
Schedule C, part I, item 1.a).

properties. These lines of credit, commonly known as
home equity lines, are typically secured by a junior lien
and are usually accessible by check or credit card.
Item 1.c.(2) Closed-end loans secured by 1–4 family
residential properties.
Report the amount of all closed-end loans secured by
1-to-4 family residential properties (i.e., closed-end
first mortgages and junior liens).

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Item 2 Loans to depository institutions and
acceptances of other banks.
For the reporting branch or agency, report in the
appropriate subitems all loans (other than those
secured by real estate), including overdrafts to banks,
other depository institutions, and other associations,
companies, and financial intermediaries whose primary business is to accept deposits and to extend credit
for business or for personal expenditure purposes and
the branch or agency’s holdings of all bankers acceptances accepted by other banks that are not held for
trading. Acceptances accepted by other banks may be
purchased in the open market or discounted by the
reporting branch or agency. For further information,
see the Glossary entry for “bankers acceptances.”

Item 1.d Secured by multifamily (5 or more)
residential properties.
Report all other nonfarm residential loans secured by
real estate as evidenced by mortgages (FHA and conventional) or other liens that are not reportable in
Schedule C, part I, item 1.c.
Specifically, include loans on:

(1) Nonfarm properties with 5 or more dwelling units
in structures (including apartment buildings and
apartment hotels) used primarily to accommodate households on a more or less permanent
basis.

Include as loans to depository institutions and acceptances of other banks:

(2) 5 or more unit housekeeping dwellings with commercial units combined where use is primarily
residential.

R

(1) Loans to depository institutions for the purpose
of purchasing or carrying securities.

(3) Cooperative-type apartment buildings containing
5 or more dwelling units.

(2) Loans to depository institutions for which the
collateral is a mortgage instrument and not the
underlying real property. Report loans to depository institutions where the collateral is the real
estate itself, as evidenced by mortgages or similar
liens, in item 1.

D

Exclude loans for multifamily residential property construction and land development purposes and loans
secured by vacant lots in established multifamily residential sections or in areas set aside primarily for multifamily residential properties (report in Schedule C, part
I, item 1.a). Also exclude loans secured by nonfarm
nonresidential properties (report in Schedule C, part I,
item 1.e).

(3) Purchases of mortgages and other loans under
agreements to resell that do not involve the lending of immediately available funds or that mature
in more than one business day, if acquired from
depository institutions.

Item 1.e Secured by nonfarm nonresidential
properties.
Report loans secured by real estate as evidenced by
mortgages or other liens on business and industrial
properties, hotels, motels, churches, hospitals, educational and charitable institutions, dormitories, clubs,
lodges, association buildings, “homes” for aged persons and orphans, golf courses, recreational facilities,
and similar properties.

(4) Certain participations in pools of loans (other
than residential mortgages), if issued by depository institutions. (See the Glossary entry for
“transfers of financial assets” for further
information.)
(5) The reporting institution’s own acceptances discounted and held in its portfolio when the
account party is another depository institution.

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FFIEC 002

Schedule C

reported in item 4, “Commercial and industrial
loans”).

(6) Loans of immediately available funds to depository institutions that mature in more than one
business day, other than security resale agreements (term federal funds sold).

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

Exclude from loans to depository institutions and
acceptances of other banks:

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

Item 2(a) To commercial banks in the U.S. (including
IBFs).
Report this item broken down between loans to and
acceptances of U.S. branches and agencies of other
foreign banks (item 2(a)(1)) and loans to and acceptances of other commercial banks in the U.S.
(item 2(a)(2)).

(2) Loans secured by real estate, even if extended to
depository institutions (report in item 1).

(3) Loans to holding companies of depository institutions (report as all other loans in item 3 or
item 8, as appropriate).
(4) Loans to real estate investment trusts and to
mortgage companies that specialize in mortgage
loan originations and warehousing or in mortgage loan servicing (report as all other loans in
item 3).

Commercial banks in the U.S. covers:

(1) U.S. branches and agencies of other foreign
banks; and
(2) all other commercial banks in the U.S., i.e., U.S.
branches of U.S. banks and all nonrelated international banking facilities (IBFs).

(6) Loans to brokers and dealers in securities, investment companies, and mutual funds (report as
loans for purchasing or carrying securities in
3
item 7).

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

R

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

Loans to and acceptances of commercial banks in the
U.S. include all loans and all other instruments evidencing loans to operating commercial banks and their
branches in the U.S., including their IBFs. Loans to
and acceptances of U.S.-chartered banks that are
owned by foreign banks or by foreign official banking
institutions should be included in item 2(a)(2), “Loans
to other commercial banks in the U.S.”

(7) Loans to Small Business Investment Companies
(report as all other loans in item 8).

D

(8) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend credit
for the purpose of purchasing or carrying securities (as described in Federal Reserve Regulation U) and loans to “plan lenders” (as defined in
Federal Reserve Regulation G) (report as loans
for purchasing or carrying securities in 3item 7).

Exclude from items 2(a)(1) and 2(a)(2) loans to other
depository institutions such as mutual savings banks,
savings and loan associations, and credit unions
(report in item 2(b) below).

(9) Loans to federally-sponsored lending agencies
(report as all other loans in item 8). Refer to the
Glossary entry for “federally-sponsored lending
agency” for the definition of this term.

Item 2(a)(1) To U.S. branches and agencies of other
foreign banks.
For the reporting branch or agency, report in column A all loans to and acceptances of U.S. branches
and agencies of other (nonrelated) foreign banks
located in the 50 states of the U.S., the District of

(10) Loans to any related depository institutions
(report in Schedule M).
(11) Loans secured by production payments (e.g.,
shares in future oil or mining production) (to be
FFIEC 002

15

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June
2012
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Schedule C
3, "Loans to other
financial institutions"

Columbia, Puerto Rico, and U.S. territories and
possessions.

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

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

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

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

AF
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(2) Loans to and acceptances of commercial banks
(including IBFs) in the U.S. (report in
item 2(a) above).
(3) Loans to brokers and dealers in securities and
loans to investment trusts of the mutual fund or
the closed-end types that hold stock for investment purposes (to be reported in item 7, “Loans
for purchasing or carrying securities”).

(3) investment companies that are chartered under
Article XII of the New York State banking law
and that are majority-owned by one or more foreign banks.

NOTE: For its IBF, report in column B loans to IBFs
of nonrelated U.S. branches and agencies of foreign
banks, and to nonrelated U.S. branches and agencies of
foreign banks domiciled in Puerto Rico and in the U.S.
territories and possessions.

NOTE: In the IBF column, report loans extended to
IBFs of nonrelated depository institutions, mentioned
above, that are domiciled in the U.S., and to the nonrelated depository institutions mentioned above domiciled in Puerto Rico and the U.S. territories and
possessions.

Item 2(a)(2) To other commercial banks in the U.S.
For the reporting branch or agency, report in column
A all loans to and acceptances of commercial banks in
the U.S. and to their IBFs, other than U.S. branches
and agencies of other foreign banks.

R

Item 2(c) To banks in foreign countries.
Report this item broken down between loans to and
acceptances of foreign branches of U.S. banks
(item 2(c)(1)) and loans to and acceptances of other
banks in foreign countries (item 2(c)(2)).

NOTE: For its IBF, report in column B (and include in
column A) all loans to IBFs of nonrelated commercial
banks domiciled in the U.S., other than U.S. branches
and agencies of foreign banks (report in item 2(a)(1)
above), and to nonrelated U.S. and foreign banks
domiciled in Puerto Rico and in the U.S. territories
and possessions.

Banks in foreign countries cover:
(1) foreign-domiciled branches of U.S. banks; and

D

(2) foreign-domiciled non-U.S. banks, including foreign commercial banks, savings banks, discount
houses, and other similar foreign institutions.

Item 2(b) To other depository institutions in the U.S.
Report only in column A those loans of the reporting
branch or agency to the following depository institutions, other than commercial banks, domiciled in the
U.S.:

See the Glossary entry for “banks, U.S. and foreign”
for further discussion of these terms.

(3) savings or building and loan associations;

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

(4) cooperative banks;

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

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

(5) industrial banks; and

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

(6) other similar depository institutions.
C-6
June 2012 2024
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FFIEC 002

Schedule C

lateral except real estate. (Loans secured by real
estate are to be reported in item 1 above.)

(2) Dollar exchange acceptances accepted by foreign
governments and official institutions (report in
item 6).

(3) Finance companies and foreign mortgage finance
companies. Include both direct loans and marketable instruments of finance companies purchased
either directly from the issuing companies or from
commercial paper dealers. Include such loans to
the following institutions:

(3) Loans to foreign governments and official institutions, including foreign central banks (report in
item 6). See the Glossary entry for “foreign governments and official institutions” for the definition of this term.

(a) factors and other financial intermediaries,

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(4) Loans to related banks in foreign countries
(report in Schedule M).

(b) short-term business credit institutions that
extend credit to finance inventories or to
carry accounts receivable, and

Item 2(c)(1) To foreign branches of U.S. banks.
Report in columns A and B, as appropriate, all loans to
and acceptances of foreign branches of U.S.-chartered
banks, including loans to “shell” branches such as
those in the Bahamas and Cayman Islands.
depository

(c) institutions whose functions are predominantly to finance personal expenditures.

(4) Bank holding companies.
(5) Insurance companies.

Item 2(c)(2) To other banks in foreign countries.
Report in columns A and B, as appropriate, all loans to
as definedand
below.
acceptances of banks in foreign countries, other
than foreign-domiciled branches of other U.S. banks
and any banks related to the reporting institution.
Include loans to and acceptances of foreign-domiciled
banking subsidiaries of U.S. banks.
See Insert C
Item 3 Loans to other financial institutions.
Report in this item loans to nonbank financial institutions, associations, companies, and financial intermediaries whose primary business is to extend credit for
business purposes or for financing personal expenditures. Include those loans for which the collateral is the
mortgage instrument, not the real estate property.
Those loans where the collateral is the real estate itself,
as evidenced by mortgages or similar liens, are to be
reported in item 1.

R

(6) Other domestic and foreign financial intermediaries (excluding those institutions included in item 2
above) whose functions are predominantly extensions of credit for business purposes, such as
investment companies that hold stock of operating companies for management or development
purposes.

Exclude, for purposes of the reporting branch or
agency, including its IBF:

D

(1) All transactions that are included in Schedule RAL, item 1(d), “Federal funds sold and
securities purchased under agreements to resell.”
(2) Loans to brokers and dealers in securities and
loans to investment trusts of the mutual fund or
the closed-end types that hold stock for investment purposes. These should be reported against
item 7, “Loans for purchasing or carrying
securities.”

For the reporting branch or agency, including its IBF,
and for the IBF only (where applicable), include extensions of credit, as defined, to the following financial
institutions:

(3) Loans to financial corporations whose sole function is to borrow money and relend it to its affiliated companies or a corporate joint venture in
which an affiliated company is a joint venturer.

(1) Investment banks.
(2) Real estate investment trust (REITs) and mortgage companies that specialize in mortgage loan
originations and warehousing and that service
mortgages for other lending institutions. Include
unsecured loans, loans secured by mortgage
instruments, and loans secured by any other colFFIEC 002

Item 4 Commercial and industrial loans.
For the reporting branch or agency, report in the
appropriate subitem loans for commercial and industrial purposes to sole proprietorships, partnerships,

17

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Insert C
Nondepository financial institutions (NDFIs) encompass a wide range of financial entities that provide services similar to
those of traditional banks but do not accept deposits from the general public and are not regulated by the Federal banking
agencies. NDFIs include, but are not limited to, mortgage companies, insurance companies, investment funds (such as
mutual funds, money market funds, hedge funds, and private capital funds), pension funds, broker-dealers, securitization
vehicles, and other financial entities engaged in credit intermediation, asset management, market-making, and other
financial services activities.
Include the following loans in this item:

AF
T

(1) Loans to mortgage credit intermediaries. Include loans to mortgage companies that specialize in residential or
commercial mortgage loan origination or servicing activities (other than those that meet the definition of a “loan secured by
real estate”). Include loans to special purpose entities designed to facilitate residential or commercial mortgage-related
securitizations activities, such as mortgage warehousing facilities, including loans to direct lenders, real estate investment
trusts (REITs), collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), private debt funds, assetbacked commercial paper (ABCP) conduits, or other financial intermediaries in which the underlying assets are
predominately (greater than 50% of assets or lending activities) comprised of residential or commercial mortgages. Include
CLO tranche holdings that are reported as “loans” in accordance with GAAP. (Exclude outright purchases of mortgages or
other loans that meet the definition of "loans secured by real estate,", which - unless held for trading - are to be reported in
item 1 above.
(2) Loans to business credit intermediaries. Include loans to special purpose entities, finance companies, direct lenders,
CDOs, CLOs, private debt funds, leasing companies, ABCP conduits, Business Development Companies (BDCs), Small
Business Investment Companies (SBICs), or other financial intermediaries in which the underlying assets are predominately
(greater than 50% of assets or lending activities) comprised of loans to businesses. Include CLO tranche holdings that are
reported as “loans” in accordance with GAAP. Include loans to other non-bank business lenders, including internet-based
lending platforms and other marketplace lenders.

R

(3) Loans to private equity funds. Include all loans to private equity funds. Include capital call commitment and other
subscription-based facilities to private equity and venture capital funds, or any other general partnership funds that raise
capital through limited partnership arrangements in which the underlying investment assets are predominately (greater than
50% of assets) comprised of equity investments in private, non-listed assets or companies.

D

(4) Loans to consumer credit intermediaries. Include loans to special purposes entities, finance companies, direct lenders,
private debt funds, leasing companies, ABCP conduits, or other financial intermediaries in which the underlying assets are
predominately (greater than 50% of assets or lending activities) comprised of loans to consumers. Include loans designed
to facilitate asset-backed securitization (ABS) activities for consumer credit products, such as auto ABS, credit card ABS,
student loan ABS, etc. Include loans to other non-bank consumer lenders, including internet-based lending platforms and
other marketplace lenders.

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Insert C Continued
(5) Other loans to nondepository financial institutions. Other NDFI loans include, but are not limited to, the following:
(a) Loans to holding companies of other depository institutions.
(b) Loans to insurance companies.
(c) Loans to federally-sponsored lending agencies (see the Glossary entry for "federally-sponsored lending agency" for the
definition of this term).
(d) Loans to investment banks and brokers and dealers. Exclude loans that meet the definition of a "loan secured by real
estate" (Report in Schedule C, item 1) and loans that meet the definition of "loans for purchasing or carrying securities,
including margin loans" (Report in Schedule C, item 7).
(e) Loans and advances made to the bank's own trust department.

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(f) Loans to publicly-listed investment funds, such as money market funds, mutual funds (both open and closed-end), index
funds, and exchange-traded funds.
(g) Loans to private capital funds, including private equity and private debt funds.
(h) Loans to hedge funds.

(i) Loans to pension funds, endowments, family offices and sovereign wealth funds.
(j) Loans to securitization vehicles.

D

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(k) Loans to other investment firms and financial vehicles.

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Schedule C

corporations, and other business enterprises, whether
secured (other than by real estate) or unsecured, singlepayment or installment. These loans may take the form
of direct or purchased loans. Include the reporting
institution’s own acceptances that it holds in its portfolio when the account party is a commercial or industrial enterprise. Also include loans to individuals for
commercial, industrial, and professional purposes but
not for investment or personal expenditure purposes.

(6) Loans made to finance construction that are not
secured by real estate.
(7) Loans to merchants or dealers on their own
promissory notes secured by the pledge of their
own installment paper.
(8) Loans extended under credit cards and related
plans that are readily identifiable as being issued
in the name of a commercial or industrial
enterprise.

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Include loans of the types listed below. These descriptions may overlap and are not all inclusive.

(9) Dealer flooring or floor-plan loans.

(1) Loans for commercial, industrial, and professional purposes to:

(10) Loans collateralized by production payments
(e.g., oil or mining production payments). Treat
as a loan to the original seller of the production
payment rather than to the holder of the production payment. For example, report in this item, as
a loan to an oil company, a loan made to a nonprofit organization collateralized by an oil production payment; do not include in item 8 as a
loan to the nonprofit organization.

(a) mining, oil- and gas-producing, and quarrying companies;
(b) manufacturing companies of all kinds,
including those which process agricultural
commodities;
(c) construction companies;

(11) Loans and participations in loans secured by conditional sales contracts made to finance the purchase of commercial transportation equipment.

(d) transportation and communications companies and public utilities;
(e) wholesale and retail trade enterprises and
other dealers in commodities;

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(12) Commercial and industrial loans guaranteed by
foreign governmental institutions.

(f) cooperative associations including farmers’
cooperatives;

Exclude from commercial and industrial loans:

(g) service enterprises such as hotels, motels,
laundries, automotive service stations, and
nursing homes and hospitals operated for
profit;

(1) Loans secured by real estate, even if for commercial and industrial purposes (report in item 1).

D

(2) Loans to depository institutions (report in
item 2).
, including margin

(h) insurance agents; and

loans institutions
(3) Loans to nondepository financial
such as real estate investment trusts, mortgage
companies, and insurance companies (report as
loans to other financial institutions in item 3).

(i) practitioners of law, medicine, and public
accounting.

(2) Loans for the purpose of financing capital expenditures and current operations.

(4) Loans for the purpose of purchasing or carrying
securities (report in item 7).

(3) Loans to business enterprises guaranteed by the
Small Business Administration.

(5) Loans for the purpose of financing agricultural
production, whether made to farmers or to
nonagricultural businesses (report in item 8).

(4) Loans to farmers for commercial and industrial
purposes (when farmers operate a business enterprise as well as a farm).

(6) Loans to nonprofit organizations, such as hospitals or educational institutions (report as all other
loans in item 8), except those for which oil or min-

(5) Loans supported by letters of commitment from
the Agency for International Development.
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FFIEC 002

Schedule C

account party is a foreign government or official institution, including such acceptances for the purpose of
financing dollar exchange. See the Glossary entry for
“foreign governments and official institutions” for the
definition of this term.

ing production payments serve as collateral which
are to be reported in this item.
(7) Holdings of acceptances accepted by other banks
(report in item 2).
(8) Holdings of own acceptances when the account
party is another bank (report in item 2) or a foreign government or official institution (report in
item 6).

Exclude from loans to foreign governments and official
institutions:
(1) Loans to nationalized banks and other banking
institutions owned by foreign governments and
not functioning as central banks, banks of issue,
or development banks (report in the appropriate
subitem of item 2 above).

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(9) Equipment trust certificates (report in Schedule RAL, item 1(c)(4)).
(10) Any commercial and industrial loans held for
trading purposes (report on Schedule RAL,
item 1(f), “Trading assets”).

(2) Loans to U.S. branches and agencies of foreign
official banking institutions (report as a loan to a
commercial bank in the U.S. in item 2(a)(1)).

Item 4(a) To U.S. addressees (domicile).
Report all commercial and industrial loans to U.S.
addressees. For a detailed discussion of U.S. and nonU.S. addressees, see the Glossary entry for “domicile.”

(3) Loans to foreign-government-owned nonbank
corporations and enterprises (report in item 3, 4,
or 8 as appropriate).

NOTE: In the IBF column, report all commercial and
industrial loans made to businesses located in Puerto
Rico and the U.S. territories and possessions.

Item 7 Loans for purchasing or carrying securities
(secured and unsecured). , including margin loans.
Report all loans extended by the reporting branch or
agency, or by the IBF only for the purpose of purchasing or carrying securities., including margin loans.

R

Item 4(b) To non-U.S. addressees (domicile).
For the reporting branch or agency, including its IBF,
report all commercial and industrial loans to non-U.S.
addressees. For a detailed discussion of U.S. and nonU.S. addressees, see the Glossary entry for “domicile.”
For the branch or agency only, include all commercial
and industrial loans to U.S. addresses that have since 1
moved or relocated outside the 50 states of the United
States, the District of Columbia, Puerto Rico, and the
U.S. territories and possessions.

Loans for purchasing or carrying securities include:

D

(1) All loans to brokers and dealers in securities
(other than those secured by real estate and those
to depository institutions).
(2) All loans, whether secured (other than by real
estate) or unsecured, to any other borrower
(except related depository institutions, which are
reported in Schedule M) for the purpose of purchasing or carrying securities (debt or equity),
such as:
, including margin loans

NOTE: Report in the IBF column all commercial and
industrial loans made to businesses located in foreign
countries.
Item 5 Not applicable.

(a) Loans made to provide funds to pay for the
purchase of securities at settlement date.

Item 6 Loans to foreign governments and official
institutions (including foreign central banks).
Report all loans (other than those secured by real
estate), including planned and unplanned overdrafts,
to governments in foreign countries, to their official
institutions, and to international and regional institutions. Include bankers acceptances accepted by the
reporting bank and held in its portfolio when the
FFIEC 002

(b) Loans made to provide funds to repay
indebtedness incurred in purchasing
securities.
(c) Loans that represent the renewal of loans to
purchase or carry securities.

21

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Schedule C

Item 8 All other loans.
For the reporting branch or agency, including its IBF,
and for the IBF only, report in the appropriate column
all loans and discounts (other than loans for purchasing or carrying securities) that cannot properly be
reported in one of the preceding items in this schedule,
such as:

(d) Loans to investment companies and mutual
funds, but excluding loans to Small Business
Investment Companies (reported in item 8).

(d)

(e) Loans to “plan lenders” as defined in Section 221.4(a) of Federal Reserve Regulation U.
(f) Loans to lenders other than brokers, dealers,
and banks whose principal business is to
extend credit for the purpose of purchasing
or carrying securities.

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(1) Unplanned overdrafts to deposit accounts (except
overdrafts of depository institutions and foreign
governments and official institutions, which are
to be reported in items 2 and 6 above, respectively,
or Schedule M if of related depository
institutions).

but excluding loans to finance an acquirer’s purchase of the stock of another entity in a merger
or acquisition that meets the definition of a business combination under U.S. generally accepted
accounting principles (and which may include
funds to cover acquisition-related costs incurred
to effect the business combination).

(2) Loans (other than those secured by real estate) to
nonprofit organizations (e.g., churches, hospitals,
educational and charitable institutions, clubs, and
similar associations) except those collateralized by
production payments where the proceeds ultimately go to a commercial or industrial organization (report in item 4).

For purposes of the FFIEC 002, the purpose of
a loan collateralized by “stock” is determined as
follows:

• For loans that are collateralized in whole or in
part by “margin stock,” as defined by Federal
Reserve Regulation U, the purpose of the loan
is determined by the latest Statement of Purpose (Form FR U-1) on file.

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See Insert D

(3) Loans to individuals for investment or personal
expenditure purposes (as distinct from commercial, industrial, or professional purposes), other
than those secured by real estate.
(4) Loans to finance agricultural production,
whether made to farmers or to nonagricultural
businesses, and other loans to farmers except
those secured by real estate (report in item 1).

• For loans that are collateralized by “stock”
other than “margin stock,” the bank may
determine the purpose of the loan according
to the most current information available.

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

D

Exclude from loans for purchasing or carrying
securities:
, including margin loans:

5
(1) Loans to nonrelated banks in foreign countries
that act as brokers and dealers in securities
(report in item 2(c)).

(6) Loans to Small Business Investment Companies.
(7) Obligations (other than securities and leases) of
states and political subdivisions in the U.S.
Report here obligations of states and political
subdivisions in the United States (including
planned and unplanned overdrafts and obligations secured by real estate), other than those
obligations reported as securities issued by such
entities in Schedule RAL, item 1(c)(4), and (b) as
lease financing receivables of states and political
subdivisions in the U.S. in Schedule C, part I,
item 9. Exclude all such obligations held for trading purposes.

(2) Loans to depository institutions (other than
related depository institutions reported in Schedule M) for the purpose of purchasing or carrying
securities (report in subitems of item 2, as
appropriate).
(3) Transactions reportable in Schedule RAL,
item 1(d), “Federal funds sold and securities purchased under agreements to resell.”
(4) Loans secured by real estate (report in item 1).

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FFIEC 002

Insert D

D

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(2) All non-purpose securities-based margin loans, regardless of borrower type. Include, for example, nonpurpose securities-based margin loans that are predominately secured (greater than 50% of underlying collateral)
by securities with readily determinable fair values. A securities-based margin loan is a loan provided to an
investor that is secured by the borrower's investment portfolio, which generally consists of equity and debt
securities with readily determinable fair values. Securities-based margin loans are further distinguished by routine
monitoring and margining practices, which generally involves ongoing assessment and adjustment of the loan's
credit availability. Margining is a risk management practice where the lender routinely reviews the value of the
underlying securities collateral to ensure it remains sufficient to secure the loan based on agreed upon terms. If
the market value of the underlying securities falls below a certain threshold, the lender may initiate a “margin call”.

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Schedule C

service (report as securities in Schedule RAL, item 1(c)(4)).

States and political subdivisions in the U.S.
include:

(c) Mortgage-backed securities issued by state
and local housing authorities (report as
securities in Schedule RAL, item 1(c)(2)).

(a) the fifty states of the United States and the
District of Columbia and their counties,
municipalities, school districts, irrigation
districts, and drainage and sewer districts; and

(d) Obligations of state and local governments
that are guaranteed by the U.S. government
(report as securities in Schedule RAL,
item 1(c)(4)).

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(b) the governments of Puerto Rico and of the
U.S. territories and possessions and their
political subdivisions.

(e) Nonrated obligations of states and political
subdivisions in the U.S. that the reporting
institution considers securities for other
financial reporting purposes (report as securities in Schedule RAL, item 1(c)(4)).

Treatment of industrial development bonds
(IDBs). Industrial development bonds (IDBs),
sometimes referred to as “industrial revenue
bonds,” are typically issued by local industrial
development authorities to benefit private commercial and industrial development. For purposes of this report, all IDBs should be reported
as securities issued by states and political subdivisions in the U.S. in Schedule RAL, item 1(c)(4),
or as loans in this item, consistent with the asset
category in which the branch or agency reports
IDBs for other financial reporting purposes.
Regardless of whether they are reported as securities in Schedule RAL, item 1(c)(4), or as loans
in this item, all IDBs that meet the definition of a
“security” in ASC Topic 320, Investments-Debt
and Equity Securities (formerly FASB Statement
No. 115, “Accounting for Certain Investments in
Debt and Equity Securities”), must be measured
in accordance with ASC Topic 320.

(f) Lease financing receivables of states and
political subdivisions in the U.S. (report as
leases in item 9 below).

(g) Obligations of states and political subdivisions in the U.S. held in trading accounts
(report in Schedule RAL, item 1(f)).

R

(8) Loans to federally-sponsored lending agencies.
Refer to the Glossary entry for “federallysponsored lending agency” for the definition of
this term.

Exclude from all other loans extensions of credit initially made in the form of planned or “advance agreement” overdrafts other than those made to borrowers
of the types whose obligations are specifically reportable in this item (report in other items, as appropriate).
For example, report advances to banks in foreign countries in the form of “advance agreement” overdrafts as
loans to banks in foreign countries in item 2(c). Report
both planned and unplanned overdrafts on “due to”
deposit accounts of depository institutions in item 2.

D

Treatment of other obligations of states and
political subdivisions in the U.S. In addition to
those IDBs that are reported in this item in
accordance with the preceding paragraph,
include as obligations (other than securities and
leases) of states and political subdivisions in the
U.S., all other obligations except those that meet
any of the following criteria:

Item 9 Lease financing receivables (net of unearned
income).
For the reporting branch or agency, including its IBF,
and for the IBF only, report in the appropriate column
all lease financing receivables of U.S. addressees
(item 9(a)) and all lease financing receivables of nonU.S. addressees (item 9(b)). Include all outstanding
receivable balances relating to direct financing and leveraged leases on property acquired by the branch or
agency for leasing purposes. These balances should

(a) Industrial development bonds (IDBs) that
are reported as securities in accordance with
the reporting treatment described above
(report as securities in Schedule RAL,
item 1(c)(4)).
(b) Notes, bonds, and debentures (including tax
warrants and tax-anticipation notes) that
are rated by a nationally-recognized rating
FFIEC 002

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