DEPOSITORY INSTITUTION REPORTS

1

FFIEC

Federal Financial Institutions Examination Council

Arlington, VA 22226

CALL REPORT DATE: June 30, 2015

SECOND 2015 CALL, NUMBER 272

SUPPLEMENTAL INSTRUCTIONS

June 2015 Call Report Forms

Sample Call Report forms and an instruction book update for June 2015 are available on both the

FFIEC's website (http://www.ffiec.gov/ffiec_report_forms.htm) and the FDIC’s website

(http://www.fdic.gov/callreports). Call Report forms, including the cover (signature) page, and instructional

materials can be printed and downloaded from the FFIEC’s and the FDIC’s websites. In addition, institutions

that use Call Report software generally can print paper copies of blank forms from their software. Please

ensure that the person responsible for preparing Call Reports at your institution has been notified about the

electronic availability of the June 2015 report forms and instruction book update as well as these Supplemental

Instructions. The locations of changes to the text of the previous quarter’s Supplemental Instructions (except

references to the quarter-end report date) are identified by a vertical line in the right margin.

Submission of Completed Reports

Each institution’s Call Report data must be submitted to the FFIEC's Central Data Repository (CDR), an

Internet-based system for data collection (https://cdr.ffiec.gov/cdr/), using one of the two methods described in

the banking agencies' Financial Institution Letter (FIL) for the June 30, 2015, report date. The CDR Help Desk

is available from 9:00 a.m. until 8:00 p.m., Eastern Time, Monday through Friday, to provide assistance with

user accounts, passwords, and other CDR system-related issues. The CDR Help Desk can be reached by

telephone at (888) CDR-3111, by fax at (703) 774-3946, or by e-mail at CDR.Help@ffiec.gov.

Institutions are required to maintain in their files a signed and attested hard-copy record of the Call Report data

file submitted to the CDR

tern Time, Monday through Friday, to provide assistance with

user accounts, passwords, and other CDR system-related issues. The CDR Help Desk can be reached by

telephone at (888) CDR-3111, by fax at (703) 774-3946, or by e-mail at CDR.Help@ffiec.gov.

Institutions are required to maintain in their files a signed and attested hard-copy record of the Call Report data

file submitted to the CDR. The appearance of this hard-copy record of the submitted data file need not match

exactly the appearance of the sample report forms on the FFIEC’s website, but the hard-copy record should

show at least the caption of each Call Report item and the reported amount. A copy of the cover page printed

from Call Report software or from the FFIEC’s website should be used to fulfill the signature and attestation

requirement. The signed cover page should be attached to the hard-copy record of the Call Report data file

that must be placed in the institution's files.

Currently, Call Report preparation software products marketed by Axiom Software Laboratories, Inc.;

Cardinal Software; DBI Financial Systems, Inc.; Fed Reporter, Inc.; FIS Compliance Solutions; FiServ, Inc.;

Jack Henry & Associates, Inc.; Lombard Risk; and Wolters Kluwer Financial Services meet the technical

specifications for producing Call Report data files that are able to be processed by the CDR. The addresses

and telephone numbers of these vendors are listed on the final page of these Supplemental Instructions.

Debt Issuance Costs

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU requires debt issuance costs to

be recognized as a direct deduction from the face amount of the related debt liability, similar to debt discounts.

The ASU is limited to the presentation of debt issuance costs; therefore, the recognition and measurement

guidance for such costs is unaffected

ting Standards Update (ASU)

No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU requires debt issuance costs to

be recognized as a direct deduction from the face amount of the related debt liability, similar to debt discounts.

The ASU is limited to the presentation of debt issuance costs; therefore, the recognition and measurement

guidance for such costs is unaffected. At present, Accounting Standards Codification (ASC) Subtopic 835-30,

Interest − Imputation of Interest, requires debt issuance costs to be reported on the balance sheet as an asset

(i.e., a deferred charge). For Call Report purposes, the costs of issuing debt currently are reported, net of

accumulated amortization, in Schedule RC-F, item 6, “All other assets,” and Schedule RC, item 11, “Other

assets.”

For institutions that are public business entities, as defined under U.S. generally accepted accounting principles

(GAAP) (as discussed in a later section of these Supplemental Instructions), ASU 2015-03 is effective for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For example,

institutions with a calendar year fiscal year that are public business entities must apply the ASU in their Call

Reports beginning March 31, 2016. For institutions that are not public business entities (i.e., that are private

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companies), the ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within

fiscal years beginning after December 15, 2016. Thus, institutions with a calendar year fiscal year that are

private companies must apply the ASU in their December 31, 2016, and subsequent quarterly Call Reports.

Early adoption of the guidance in ASU 2015-03 is permitted

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companies), the ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within

fiscal years beginning after December 15, 2016. Thus, institutions with a calendar year fiscal year that are

private companies must apply the ASU in their December 31, 2016, and subsequent quarterly Call Reports.

Early adoption of the guidance in ASU 2015-03 is permitted.

After an institution adopts ASU 2015-03, any transaction in which debt issuance costs were incurred and

classified as deferred charges in “Other assets” before the adoption of the ASU should be reported as a direct

deduction from the carrying amount of the related debt liability and included in the appropriate balance sheet

category of liabilities in Call Report Schedule RC, e.g., item 16, “Other borrowed money,” or item 19,

“Subordinated notes and debentures.”

For additional information, institutions should refer to ASU 2015-03, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share

In May 2015, the FASB issued ASU No. 2015-07, “Disclosures for Investments in Certain Entities That

Calculate Net Asset Value per Share (or Its Equivalent).” This ASU removes the requirement to categorize

within the fair value hierarchy all investments for which fair value is measured using the net asset value (NAV)

per share (or its equivalent) practical expedient described in ASC Topic 820, Fair Value Measurement (formerly

FASB Statement No. 157, “Fair Value Measurements”). It also removes the requirement to make certain

disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical

expedient, regardless of whether the expedient has been applied

e (NAV)

per share (or its equivalent) practical expedient described in ASC Topic 820, Fair Value Measurement (formerly

FASB Statement No. 157, “Fair Value Measurements”). It also removes the requirement to make certain

disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical

expedient, regardless of whether the expedient has been applied. Rather, the ASU limits those disclosures to

investments for which the entity has elected to measure fair value using the NAV per share practical expedient

to help users of its financial statements understand the nature and risks of the investments and whether the

investments, if sold, are probable of being sold at amounts different from their NAV per share (or its

equivalent). In addition, although the investments are not categorized within the fair value hierarchy, the ASU

requires a reporting entity to disclose the amount of investments for which fair value is measured using the

NAV per share practical expedient to permit reconciliation of the fair value of investments included in the fair

value hierarchy to the line items presented in the statement of financial position.

ASC Topic 820 currently permits a reporting entity, as a practical expedient, to measure the fair value of certain

investments in investment companies and real estate funds using the NAV per share of the investment. In

contrast to other investments within the fair value hierarchy, which are categorized on the basis of the

observability of the significant inputs in the fair value measurement, investments valued using the NAV per

share practical expedient currently are categorized on the basis of whether the investment is redeemable with

the investee at NAV on the measurement date, never redeemable with the investee at NAV, or redeemable

with the investee at NAV at a future date

re categorized on the basis of the

observability of the significant inputs in the fair value measurement, investments valued using the NAV per

share practical expedient currently are categorized on the basis of whether the investment is redeemable with

the investee at NAV on the measurement date, never redeemable with the investee at NAV, or redeemable

with the investee at NAV at a future date.

The criteria for categorizing investments in the fair value hierarchy that are measured using the NAV per share

practical expedient do not consider the observability of inputs and are therefore inconsistent with the

overarching intent of the fair value hierarchy. By removing the requirement to include investments measured

using the NAV per share practical expedient within the fair value hierarchy, ASU 2015-07 ensures that all

investments within the hierarchy are categorized using a consistent approach. Investments that calculate NAV

per share, but for which the practical expedient is not applied, must continue to be included in the fair value

hierarchy.

For Call Report purposes, the issuance of ASU 2015-07 means that an institution that has adopted the ASU

and elects to measure the fair value of an investment that meets criteria specified in Topic 820 using the NAV

per share practical expedient should continue to report the investment’s fair value in the appropriate asset item

in column A of Schedule RC-Q, Assets and Liabilities Measured at Fair Value on a Recurring Basis. However,

the institution should exclude the investment from the Level 1, 2, and 3 disclosures in columns C, D, and E of

Schedule RC-Q and it should instead report the fair value measured using the NAV per share practical

expedient in column B along with the netting adjustments currently reported in column B

A of Schedule RC-Q, Assets and Liabilities Measured at Fair Value on a Recurring Basis. However,

the institution should exclude the investment from the Level 1, 2, and 3 disclosures in columns C, D, and E of

Schedule RC-Q and it should instead report the fair value measured using the NAV per share practical

expedient in column B along with the netting adjustments currently reported in column B. In contrast, if the

institution does not elect to measure an investment that meets criteria specified in Topic 820 using the NAV

practical expedient, it must disclose in column C, D, or E of Schedule RC-Q, as appropriate, the level within the

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fair value hierarchy within which its fair value measurement in its entirety falls based on the lowest level input

that is significant to the fair value measurement in its entirety.

ASU 2015-07 is effective for institutions that are public business entities, as defined under U.S. GAAP (as

discussed in a later section of these Supplemental Instructions), for fiscal years beginning after December 15,

2015, and interim periods within those fiscal years. For example, institutions with a calendar year fiscal year

that are public business entities must apply the ASU in their Call Reports beginning March 31, 2016. For

institutions that are not public business entities (i.e., that are private companies), the ASU is effective for fiscal

years beginning after December 15, 2016, and interim periods within those fiscal years. Accordingly,

institutions with a calendar year fiscal year that are private companies must apply the ASU in their Call Reports

beginning March 31, 2017. Earlier application is permitted. If an institution chooses to early adopt ASU

2015-07 for second quarter 2015 financial reporting purposes, the institution may implement the provisions of

the ASU in the manner described above in its Call Report for June 30, 2015. However, prior Call Reports

should not be amended

e companies must apply the ASU in their Call Reports

beginning March 31, 2017. Earlier application is permitted. If an institution chooses to early adopt ASU

2015-07 for second quarter 2015 financial reporting purposes, the institution may implement the provisions of

the ASU in the manner described above in its Call Report for June 30, 2015. However, prior Call Reports

should not be amended.

For additional information, institutions should refer to ASU 2015-07, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Extraordinary Items

In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by

Eliminating the Concept of Extraordinary Items.” This ASU eliminates from U.S. GAAP the concept of

extraordinary items. At present, ASC Subtopic 225-20, Income Statement – Extraordinary and Unusual Items

(formerly Accounting Principles Board Opinion No. 30, “Reporting the Results of Operations”), requires an

entity to separately classify, present, and disclose extraordinary events and transactions. An event or

transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly

supports its classification as an extraordinary item. For Call Report purposes, if an event or transaction

currently meets the criteria for extraordinary classification, an institution must segregate the extraordinary item

from the results of its ordinary operations and report the extraordinary item in its income statement in

Schedule RI, item 11, “Extraordinary items and other adjustments, net of income taxes.”

ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2015. Thus, for example, institutions with a calendar year fiscal year must begin to apply the

ASU in their Call Reports for March 31, 2016. Early adoption of ASU 2015-01 is permitted provided that the

guidance is applied from the beginning of the fiscal year of adoption

ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2015. Thus, for example, institutions with a calendar year fiscal year must begin to apply the

ASU in their Call Reports for March 31, 2016. Early adoption of ASU 2015-01 is permitted provided that the

guidance is applied from the beginning of the fiscal year of adoption. For Call Report purposes, an institution

with a calendar year fiscal year must apply the ASU prospectively, that is, in general, to events or transactions

occurring after the date of adoption. However, an institution with a fiscal year other than a calendar year may

elect to apply ASU 2015-01 prospectively or, alternatively, it may elect to apply the ASU retrospectively to all

prior calendar quarters included in the institution’s year-to-date Call Report income statement that includes the

beginning of the fiscal year of adoption.

After an institution adopts ASU 2015-01, any event or transaction that would have met the criteria for

extraordinary classification before the adoption of the ASU should be reported in Call Report Schedule RI,

item 5.l, “Other noninterest income,” or item 7.d, “Other noninterest expense,” as appropriate, unless the event

or transaction would otherwise be reportable in another item of Schedule RI. In addition, consistent with

ASU 2015-01, the agencies plan to remove the term “extraordinary items” from, and revise the caption for,

Schedule RI, item 11, in 2016.

For additional information, institutions should refer to ASU 2015-01, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Accounting by Private Companies for Identifiable Intangible Assets in a Business Combination

In December 2014, the FASB issued ASU No. 2014-18, “Accounting for Identifiable Intangible Assets in a

Business Combination,” which is a consensus of the Private Company Council (PCC)

should refer to ASU 2015-01, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Accounting by Private Companies for Identifiable Intangible Assets in a Business Combination

In December 2014, the FASB issued ASU No. 2014-18, “Accounting for Identifiable Intangible Assets in a

Business Combination,” which is a consensus of the Private Company Council (PCC). This ASU provides an

accounting alternative that permits a private company, as defined in U.S. GAAP (and discussed in a later

section of these Supplemental Instructions), to simplify the accounting for certain intangible assets. The

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accounting alternative applies when a private company is required to recognize or otherwise consider the fair

value of intangible assets as a result of certain transactions, including when applying the acquisition method to

a business combination under ASC Topic 805, Business Combinations (formerly FASB Statement No. 141

(revised 2007), “Business Combinations”).

Under ASU 2014-018, a private company that elects the accounting alternative should no longer recognize

separately from goodwill:

•

Customer-related intangible assets unless they are capable of being sold or licensed independently from

the other assets of a business, and

•

Noncompetition agreements.

However, because mortgage servicing rights and core deposit intangibles are regarded as capable of being

sold or licensed independently, a private company that elects this accounting alternative must recognize these

intangible assets separately from goodwill, initially measure them at fair value, and subsequently measure them

in accordance with ASC Topic 350, Intangibles – Goodwill and Other (formerly FASB Statement No. 142,

“Goodwill and Other Intangible Assets”)

are regarded as capable of being

sold or licensed independently, a private company that elects this accounting alternative must recognize these

intangible assets separately from goodwill, initially measure them at fair value, and subsequently measure them

in accordance with ASC Topic 350, Intangibles – Goodwill and Other (formerly FASB Statement No. 142,

“Goodwill and Other Intangible Assets”).

A private company that elects the accounting alternative in ASU 2014-18 also must adopt the private company

goodwill accounting alternative described in ASU 2014-02, “Accounting for Goodwill,” which is discussed in a

later section of these Supplemental Instructions. However, a private company that elects the goodwill

accounting alternative in ASU 2014-02 is not required to adopt the accounting alternative for identifiable

intangible assets in ASU 2014-18.

A private company’s decision to adopt ASU 2014-18 must be made upon the occurrence of the first business

combination (or other transaction within the scope of the ASU) in fiscal years beginning after December 15,

2015. The effective date of the private company’s decision to adopt the accounting alternative for identifiable

intangible assets depends on the timing of that first transaction.

•

If the first transaction occurs in the private company’s first fiscal year beginning after December 15, 2015,

the adoption will be effective for that fiscal year’s annual financial reporting period and all interim and

annual periods thereafter.

•

If the first transaction occurs in a fiscal year beginning after December 15, 2016, the adoption will be

effective in the interim period that includes the date of the transaction and subsequent interim and annual

periods thereafter.

Early application of the intangibles accounting alternative is permitted for any annual or interim period for which

a private company’s financial statements have not yet been made available for issuance

l year beginning after December 15, 2016, the adoption will be

effective in the interim period that includes the date of the transaction and subsequent interim and annual

periods thereafter.

Early application of the intangibles accounting alternative is permitted for any annual or interim period for which

a private company’s financial statements have not yet been made available for issuance. Customer-related

intangible assets and noncompetition agreements that exist as of the beginning of the period of adoption

should continue to be accounted for separately from goodwill, i.e., such existing intangible assets should not be

combined with goodwill.

A bank or savings association that meets the private company definition in U.S. GAAP is permitted, but not

required, to adopt ASU 2014-18 for Call Report purposes and may choose to early adopt the ASU, provided it

also adopts the private company goodwill accounting alternative. If a private institution issues U.S. GAAP

financial statements and adopts ASU 2014-18, it should apply the ASU’s intangible asset accounting alternative

in its Call Report in a manner consistent with its reporting of intangible assets in its financial statements.

For additional information on the private company accounting alternative for identifiable intangible assets,

institutions should refer to ASU 2014-18, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Supplementary Leverage Ratio for Advanced Approaches Institutions

Item 45 of Schedule RC-R, Part I, Regulatory Capital Components and Ratios, applies to the reporting of the

supplementary leverage ratio (SLR) by advanced approaches institutions. In the sample Call Report forms and

the Call Report instructions for report dates before March 31, 2015, the caption for item 45 and the instructions

pplementary Leverage Ratio for Advanced Approaches Institutions

Item 45 of Schedule RC-R, Part I, Regulatory Capital Components and Ratios, applies to the reporting of the

supplementary leverage ratio (SLR) by advanced approaches institutions. In the sample Call Report forms and

the Call Report instructions for report dates before March 31, 2015, the caption for item 45 and the instructions

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for this item both indicated that, in the first quarter of 2015, advanced approaches institutions should begin to

report their SLR as calculated for purposes of Schedule A, item 98, of the FFIEC 101, Regulatory Capital

Reporting for Institutions Subject to the Advanced Capital Adequacy Framework.

However, because of amendments to the banking agencies’ regulatory capital rules in 2014 that revised certain

aspects of the SLR, the agencies will be revising the portion of Schedule A of the FFIEC 101 that applies to the

calculation of the SLR. Accordingly, the reporting of the SLR in item 45 of Schedule RC-R, Part I, has been

deferred and the new effective date for item 45 has not yet been determined.

Private Company Accounting Alternatives

In May 2012, the Financial Accounting Foundation, the independent private sector organization responsible

for the oversight of the FASB, approved the establishment of the PCC to improve the process of setting

accounting standards for private companies. The PCC is charged with working jointly with the FASB to

determine whether and in what circumstances to provide alternative recognition, measurement, disclosure,

display, effective date, and transition guidance for private companies reporting under U.S. GAAP. Alternative

guidance for private companies may include modifications or exceptions to otherwise applicable existing

U.S. GAAP standards.

The banking agencies have concluded that a bank or savings association that is a private company, as defined

in U.S

ive recognition, measurement, disclosure,

display, effective date, and transition guidance for private companies reporting under U.S. GAAP. Alternative

guidance for private companies may include modifications or exceptions to otherwise applicable existing

U.S. GAAP standards.

The banking agencies have concluded that a bank or savings association that is a private company, as defined

in U.S. GAAP (as discussed in a later section of these Supplemental Instructions), is permitted to use private

company accounting alternatives issued by the FASB when preparing its Call Reports, except as provided in

12 U.S.C. 1831n(a) as described in the following sentence. If the agencies determine that a particular

accounting principle within U.S. GAAP, including a private company accounting alternative, is inconsistent with

the statutorily specified supervisory objectives, the agencies may prescribe an accounting principle for

regulatory reporting purposes that is no less stringent than U.S. GAAP. In such a situation, an institution would

not be permitted to use that particular private company accounting alternative or other accounting principle

within U.S. GAAP for Call Report purposes. The agencies would provide appropriate notice if they were to

disallow any accounting alternative under the statutory process.

Accounting by Private Companies for Goodwill

On January 16, 2014, the FASB issued ASU No. 2014-02, “Accounting for Goodwill,” which is a consensus of

the PCC. This ASU generally permits a private company to elect to amortize goodwill on a straight-line basis

over a period of ten years (or less than ten years if more appropriate) and apply a simplified impairment model

to goodwill. In addition, if a private company chooses to adopt the ASU’s goodwill accounting alternative, the

ASU requires the private company to make an accounting policy election to test goodwill for impairment at

either the entity level or the reporting unit level

ght-line basis

over a period of ten years (or less than ten years if more appropriate) and apply a simplified impairment model

to goodwill. In addition, if a private company chooses to adopt the ASU’s goodwill accounting alternative, the

ASU requires the private company to make an accounting policy election to test goodwill for impairment at

either the entity level or the reporting unit level. Goodwill must be tested for impairment when a triggering

event occurs that indicates that the fair value of an entity (or a reporting unit) may be below its carrying amount.

In contrast, U.S. GAAP does not otherwise permit goodwill to be amortized, instead requiring goodwill to be

tested for impairment at the reporting unit level annually and between annual tests in certain circumstances.

The ASU’s goodwill accounting alternative, if elected by a private company, is effective prospectively for new

goodwill recognized in annual periods beginning after December 15, 2014, and in interim periods within annual

periods beginning after December 15, 2015. Goodwill existing as of the beginning of the period of adoption is

to be amortized prospectively over ten years (or less than ten years if more appropriate). The ASU states that

early application of the goodwill accounting alternative is permitted for any annual or interim period for which a

private company’s financial statements have not yet been made available for issuance.

A bank or savings association that meets the private company definition in ASU 2014-02, as discussed in the

following section of these Supplemental Instructions (i.e., a private institution), is permitted, but not required,

to adopt this ASU for Call Report purposes and may choose to early adopt the ASU. If a private institution

issues U.S. GAAP financial statements and adopts the ASU, it should apply the ASU’s goodwill accounting

alternative in its Call Report in a manner consistent with its reporting of goodwill in its financial statements

tructions (i.e., a private institution), is permitted, but not required,

to adopt this ASU for Call Report purposes and may choose to early adopt the ASU. If a private institution

issues U.S. GAAP financial statements and adopts the ASU, it should apply the ASU’s goodwill accounting

alternative in its Call Report in a manner consistent with its reporting of goodwill in its financial statements.

Thus, for example, a private institution with a calendar year fiscal year that chooses to adopt ASU 2014-02

must apply the ASU’s provisions in its December 31, 2015, and subsequent quarterly Call Reports unless early

application of the ASU is elected. If a private institution with a calendar year fiscal year chooses to early adopt

ASU 2014-02 for second quarter 2015 financial reporting purposes, the institution may implement the

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provisions of the ASU in its Call Report for June 30, 2015. This would require the private institution to report in

its second quarter 2015 Call Report six months’ amortization of goodwill existing as of January 1, 2015, and the

amortization of any new goodwill recognized in the first six months of 2015. Goodwill amortization expense

should be reported in item 7.c.(1) of the Call Report income statement (Schedule RI) unless the amortization is

associated with a discontinued operation, in which case the goodwill amortization should be included within the

results of discontinued operations and reported in Schedule RI, item 11, “Extraordinary items and other

adjustments, net of income taxes.”

Private institutions choosing to early adopt the goodwill accounting alternative in ASU 2014-02 that have a

fiscal year or an early application date other than the one described in the example above should contact their

assigned Call Report analyst for reporting guidance. If you do not know the analyst assigned to your institution,

state member banks should contact their Federal Reserve District Bank

institutions choosing to early adopt the goodwill accounting alternative in ASU 2014-02 that have a

fiscal year or an early application date other than the one described in the example above should contact their

assigned Call Report analyst for reporting guidance. If you do not know the analyst assigned to your institution,

state member banks should contact their Federal Reserve District Bank. National banks, FDIC supervised

banks, and savings associations should call the FDIC’s Data Collection and Analysis Section in Washington,

D.C., at (800) 688-3342.

For additional information on the private company accounting alternative for goodwill, institutions should refer to

ASU 2014-02, which is available at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Definitions of Private Company and Public Business Entity

ASU No. 2013-12, “Definition of a Public Business Entity,” which was issued in December 2013, added this

term to the Master Glossary in the Accounting Standards Codification. This ASU states that a business entity,

such as bank or savings association, that meets any one of five criteria set forth in the ASU is a public

business entity for reporting purposes under U.S. GAAP, including 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 the private company accounting alternatives discussed in preceding sections of

these Supplemental Instructions when preparing its Call Report.

As defined in ASU 2013-12, 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)

c 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 securities that are traded, listed, or quoted on an exchange or an over-the-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.

ASU 2013-12 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

to meet this criterion.

ASU 2013-12 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.

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. A mutual institution does not meet the fifth criterion. 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

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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.

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 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

pendent Audits and Reporting

Requirements,” to prepare and make publicly available 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 institution of this size that satisfies the financial statement

requirement of Section 36 and Part 363 at the institution level would meet the fifth criterion’s second condition.

However, if the institution has a parent holding company and the holding company’s financial statements are

used to satisfy the requirements of Section 36 and Part 363, and the institution is not required by some other

law, contract, or regulation to prepare and make publicly available its standalone U.S. GAAP financial

statements (including footnotes), the institution would not meet the fifth criterion’s second condition and

therefore would be a private company for Call Report purposes.

For additional information on the definition of a public business entity, institutions should refer to ASU 2013-12,

which is available at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Accounting for a Subsequent Restructuring of a Troubled Debt Restructuring

When a loan has previously been modified in a troubled debt restructuring (TDR), the lending institution and

the borrower may subsequently enter into another restructuring agreement. The facts and circumstances of

each subsequent restructuring of a TDR loan should be carefully evaluated to determine the appropriate

accounting by the institution under U.S. GAAP. Under certain circumstances it may be acceptable not to

account for the subsequently restructured loan as a TDR

the lending institution and

the borrower may subsequently enter into another restructuring agreement. The facts and circumstances of

each subsequent restructuring of a TDR loan should be carefully evaluated to determine the appropriate

accounting by the institution under U.S. GAAP. Under certain circumstances it may be acceptable not to

account for the subsequently restructured loan as a TDR. The federal financial institution regulatory agencies

will not object to an institution no longer treating such a loan as a TDR if at the time of the subsequent

restructuring the borrower is not experiencing financial difficulties and, under the terms of the subsequent

restructuring agreement, no concession has been granted by the institution to the borrower. To meet these

conditions for removing the TDR designation, the subsequent restructuring agreement must specify market

terms, including a contractual interest rate not less than a market interest rate for new debt with similar credit

risk characteristics and other terms no less favorable to the institution than those it would offer for such new

debt. When assessing whether a concession has been granted by the institution, the agencies consider any

principal forgiveness on a cumulative basis to be a continuing concession. When determining whether the

borrower is experiencing financial difficulties, the institution's assessment of the borrower's financial condition

and prospects for repayment after the restructuring should be supported by a current, well-documented credit

evaluation performed at the time of the restructuring.

If at the time of the subsequent restructuring the institution appropriately demonstrates that a loan meets the

conditions discussed above, the impairment on the loan need no longer be measured as a TDR in accordance

with ASC Subtopic 310-10, Receivables – Overall (formerly FASB Statement No.114), and the loan need no

longer be disclosed as a TDR in the Call Report, except as noted below

ng.

If at the time of the subsequent restructuring the institution appropriately demonstrates that a loan meets the

conditions discussed above, the impairment on the loan need no longer be measured as a TDR in accordance

with ASC Subtopic 310-10, Receivables – Overall (formerly FASB Statement No.114), and the loan need no

longer be disclosed as a TDR in the Call Report, except as noted below. Accordingly, going forward, loan

impairment should be measured under ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly

FASB Statement No. 5). Even though the loan need no longer be measured for impairment as a TDR or

disclosed as a TDR, the recorded investment in the loan should not change at the time of the subsequent

restructuring (unless cash is advanced or received). In this regard, when there have been charge-offs prior to

the subsequent restructuring, consistent with longstanding Call Report instructions, no recoveries should be

recognized until collections on amounts previously charged off have been received. Similarly, if interest

payments were applied to the recorded investment in the TDR loan prior to the subsequent restructuring, the

application of these payments to the recorded investment should not be reversed nor reported as interest

income at the time of the subsequent restructuring.

If the TDR designation is removed from a loan that meets the conditions discussed above and the loan is later

modified in a TDR or individually evaluated and determined to be impaired, then the impairment on the loan

should be measured under ASC Subtopic 310-10 and, if appropriate, the loan should be disclosed as a TDR.

rted as interest

income at the time of the subsequent restructuring.

If the TDR designation is removed from a loan that meets the conditions discussed above and the loan is later

modified in a TDR or individually evaluated and determined to be impaired, then the impairment on the loan

should be measured under ASC Subtopic 310-10 and, if appropriate, the loan should be disclosed as a TDR.

SUPPLEMENTAL INSTRUCTIONS – MARCH 2015

8

For a subsequently restructured TDR loan on which there was principal forgiveness and therefore does not

meet the conditions discussed above, the impairment on the loan should continue to be measured as a TDR.

However, if the subsequent restructuring agreement specifies a contractual interest rate that, at the time of the

subsequent restructuring, is not less than a market interest rate for new debt with similar credit risk

characteristics and the loan is performing in compliance with its modified terms after the subsequent

restructuring, the loan need not continue to be reported as a TDR in Schedule RC-C, Part I, Memorandum

item 1, in calendar years after the year in which the subsequent restructuring took place. To be considered in

compliance with its modified terms, a loan that is a TDR must be in accrual status and must be current or less

than 30 days past due on its contractual principal and interest payments under the modified repayment terms.

Institutions may choose to apply this guidance prospectively to TDR loans that, upon a subsequent

restructuring on or after October 1, 2014, meet the conditions discussed above for removing the TDR

designation. Institutions also may choose to apply this guidance to loans outstanding as of September 30,

2014, for which there has been a previous subsequent restructuring that met the conditions discussed above at

the time of the subsequent restructuring. However, prior Call Reports should not be amended

g on or after October 1, 2014, meet the conditions discussed above for removing the TDR

designation. Institutions also may choose to apply this guidance to loans outstanding as of September 30,

2014, for which there has been a previous subsequent restructuring that met the conditions discussed above at

the time of the subsequent restructuring. However, prior Call Reports should not be amended.

Reporting Certain Government-Guaranteed Mortgage Loans upon Foreclosure

In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-14, “Classification of Certain

Government-Guaranteed Mortgage Loans upon Foreclosure,” to address diversity in practice for how

government-guaranteed mortgage loans are recorded upon foreclosure. The ASU updates guidance

contained in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly FASB

Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended),

because U.S. GAAP previously did not provide specific guidance on how to categorize or measure foreclosed

mortgage loans that are government guaranteed. The new ASU clarifies the conditions under which a creditor

must derecognize a government-guaranteed mortgage loan and recognize a separate “other receivable” upon

foreclosure (that is, when a creditor receives physical possession of real estate property collateralizing a

mortgage loan in accordance with the guidance in ASC Subtopic 310-40).

Under the new guidance, institutions should derecognize a mortgage loan and record a separate other

receivable upon foreclosure of the real estate collateral if the following conditions are met:

•

The loan has a government guarantee that is not separable from the loan before foreclosure.

•

At the time of foreclosure, the institution has the intent to convey the property to the guarantor and make a

claim on the guarantee and it has the ability to recover under that claim

a separate other

receivable upon foreclosure of the real estate collateral if the following conditions are met:

•

The loan has a government guarantee that is not separable from the loan before foreclosure.

•

At the time of foreclosure, the institution has the intent to convey the property to the guarantor and make a

claim on the guarantee and it has the ability to recover under that claim.

•

At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the

real estate is fixed (that is, the real estate property has been appraised for purposes of the claim and thus

the institution is not exposed to changes in the fair value of the property).

This guidance is applicable to fully and partially government-guaranteed mortgage loans provided the three

conditions identified above have been met. In such situations, upon foreclosure, the separate other receivable

should be measured based on the amount of the loan balance (principal and interest) expected to be

recovered from the guarantor. This other receivable should be reported in Schedule RC-F, item 6, “All other

assets,” and itemized and described if the aggregate amount of these other receivables exceeds the reporting

threshold for item 6. Any interest income earned on the other receivable would be reported in Schedule RI,

item 1.g, “Other interest income.” Other real estate owned would not be recognized by the institution.

For institutions that are public business entities, as defined under U.S. GAAP (as discussed in an earlier

section of these Supplemental Instructions), ASU 2014-14 is effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2014. For example, institutions with a calendar year

fiscal year that are public business entities must apply the ASU in their Call Reports beginning March 31, 2015

ss entities, as defined under U.S. GAAP (as discussed in an earlier

section of these Supplemental Instructions), ASU 2014-14 is effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2014. For example, institutions with a calendar year

fiscal year that are public business entities must apply the ASU in their Call Reports beginning March 31, 2015.

However, institutions that are not public business entities (i.e., that are private companies) are not required to

apply the guidance in ASU 2014-14 until annual periods ending after December 15, 2015, and interim periods

beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are private

companies must apply the ASU in their December 31, 2015, and subsequent quarterly Call Reports. Earlier

adoption of the guidance in ASU 2014-14 is permitted if the institution has already adopted the amendments in

SUPPLEMENTAL INSTRUCTIONS – MARCH 2015

9

ASU No. 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon

Foreclosure” (which is discussed in the following section of these Supplemental Instructions).

Entities can elect to apply ASU 2014-14 on either a modified retrospective transition basis or a prospective

transition basis. However, institutions must use the method of transition that is elected for ASU 2014-04 (that

is, either modified retrospective or prospective). Applying ASU 2014-14 on a prospective transition basis

should be less complex for institutions than applying the ASU on a modified retrospective transition basis.

Under the prospective transition method, an institution should apply the new guidance to foreclosures of real

estate property collateralizing certain government-guaranteed mortgage loans (based on the criteria described

above) that occur after the date of adoption of the ASU

ition basis

should be less complex for institutions than applying the ASU on a modified retrospective transition basis.

Under the prospective transition method, an institution should apply the new guidance to foreclosures of real

estate property collateralizing certain government-guaranteed mortgage loans (based on the criteria described

above) that occur after the date of adoption of the ASU. Under the modified retrospective transition method, an

institution should apply a cumulative-effect adjustment to affected accounts existing as of the beginning of the

annual period for which the ASU is adopted. The cumulative-effect adjustment for this change in accounting

principle should be reported in Schedule RI-A, item 2.

For additional information, institutions should refer to ASU 2014-14, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure

In January 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-04, “Reclassification of

Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” to address diversity in

practice for when certain loan receivables should be derecognized and the real estate collateral recognized.

The ASU updates guidance contained in Accounting Standards Codification Subtopic 310-40, Receivables –

Troubled Debt Restructurings by Creditors (formerly FASB Statement No.15, “Accounting by Debtors and

Creditors for Troubled Debt Restructurings,” as amended).

Under prior accounting guidance, all loan receivables were reclassified to other real estate owned (OREO)

when the institution, as creditor, obtained physical possession of the property, regardless of whether formal

foreclosure proceedings had taken place

turings by Creditors (formerly FASB Statement No.15, “Accounting by Debtors and

Creditors for Troubled Debt Restructurings,” as amended).

Under prior accounting guidance, all loan receivables were reclassified to other real estate owned (OREO)

when the institution, as creditor, obtained physical possession of the property, regardless of whether formal

foreclosure proceedings had taken place. The new ASU clarifies when a creditor is considered to have

received physical possession (resulting from an in-substance repossession or foreclosure) of residential real

estate collateralizing a consumer mortgage loan. Under the new guidance, physical possession for these

residential real estate properties is considered to have occurred and a loan receivable would be reclassified to

OREO only upon:

•

The institution obtaining legal title upon completion of a foreclosure even if the borrower has redemption

rights that provide the borrower with a legal right for a period of time after foreclosure to reclaim the

property by paying certain amounts specified by law, or

•

The completion of a deed in lieu of foreclosure or similar legal agreement under which the borrower

conveys all interest in the residential real estate property to the institution to satisfy the loan.

Other real estate owned in the form of 1-4 family residential properties, when held in domestic offices, is

reported in Schedule RC-M, item 3.c, except for properties resulting from foreclosures on real estate backing

“GNMA loans,” which, at present, are reported in Schedule RC-M, item 3.f

er

conveys all interest in the residential real estate property to the institution to satisfy the loan.

Other real estate owned in the form of 1-4 family residential properties, when held in domestic offices, is

reported in Schedule RC-M, item 3.c, except for properties resulting from foreclosures on real estate backing

“GNMA loans,” which, at present, are reported in Schedule RC-M, item 3.f. (As discussed in the preceding

section of these Supplemental Instructions, the manner in which certain government-guaranteed mortgage

loans are recorded upon foreclosure will change when an institution adopts ASU 2014-14.)

Loans secured by real estate other than consumer mortgage loans collateralized by residential real estate

should continue to be reclassified to OREO when the institution has received physical possession of a

borrower's real estate, regardless of whether formal foreclosure proceedings take place.

For institutions that are public business entities, as defined under U.S. GAAP (as discussed above in these

Supplemental Instructions), ASU 2014-04 is effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2014. For example, institutions with a calendar year fiscal year that are

public business entities must apply the ASU in their Call Reports beginning March 31, 2015. However,

institutions that are not public business entities (i.e., that are private companies) are not required to apply the

guidance in ASU 2014-04 until annual periods beginning after December 15, 2014, and interim periods within

annual periods beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are

ASU in their Call Reports beginning March 31, 2015. However,

institutions that are not public business entities (i.e., that are private companies) are not required to apply the

guidance in ASU 2014-04 until annual periods beginning after December 15, 2014, and interim periods within

annual periods beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are

SUPPLEMENTAL INSTRUCTIONS – MARCH 2015

10

private companies must apply the ASU in their December 31, 2015, and subsequent quarterly Call Reports.

Earlier adoption of the guidance in ASU 2014-04 is permitted.

Entities can elect to apply the ASU on either a modified retrospective transition basis or a prospective transition

basis. Applying the ASU on a prospective transition basis should be less complex for institutions than applying

the ASU on a modified retrospective transition basis. Under the prospective transition method, an institution

should apply the new guidance to all instances where it receives physical possession of residential real estate

property collateralizing consumer mortgage loans that occur after the date of adoption of the ASU. Under the

modified retrospective transition method, an institution should apply a cumulative-effect adjustment to

residential consumer mortgage loans and OREO existing as of the beginning of the annual period for which the

ASU is effective. The cumulative-effect adjustment for this change in accounting principle should be reported

in Schedule RI-A, item 2. As a result of adopting the ASU on a modified retrospective basis, assets

reclassified from OREO to loans should be measured at the carrying value of the real estate at the date of

adoption while assets reclassified from loans to OREO should be measured at the lower of the net amount of

the loan receivable or the OREO property’s fair value less costs to sell at the time of adoption

-A, item 2. As a result of adopting the ASU on a modified retrospective basis, assets

reclassified from OREO to loans should be measured at the carrying value of the real estate at the date of

adoption while assets reclassified from loans to OREO should be measured at the lower of the net amount of

the loan receivable or the OREO property’s fair value less costs to sell at the time of adoption.

For additional information, institutions should refer to ASU 2014-04, which is available at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.

“Purchased” Loans Originated By Others

When acquiring loans originated by others, institutions should consider whether the transaction should be

accounted for as a purchase of the loans or as a secured borrowing (i.e., a loan to the originator) in

accordance with ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for

Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended). For the

transaction to qualify as a sale by the originator to the acquiring institution, certain conditions must be met:

•

First, unless the transfer is of an entire financial asset, the transferred portion of the financial asset must

meet the definition of a participating interest.

•

Second, the transfer must meet all of the conditions set forth in ASC Subtopic 860-10 to demonstrate that

the transferor has surrendered control over the transferred financial assets.

For example, some institutions have entered into various residential mortgage loan purchase programs. These

programs often function like traditional warehouse lines of credit; however, in some cases, the mortgage loan

transfers are legally structured as purchases by the institution rather than as pledges of collateral to secure the

funding. Under these programs, an institution provides funding to a mortgage loan originator while

simultaneously obtaining an interest in the mortgage loans subject to a takeout commitment

tion like traditional warehouse lines of credit; however, in some cases, the mortgage loan

transfers are legally structured as purchases by the institution rather than as pledges of collateral to secure the

funding. Under these programs, an institution provides funding to a mortgage loan originator while

simultaneously obtaining an interest in the mortgage loans subject to a takeout commitment. A takeout

commitment is a written commitment from an approved investor (generally, an unrelated third party) to

purchase one or more mortgage loans from the originator.

Although the facts and circumstances of each program must be carefully evaluated to determine the

appropriate accounting, an institution should generally account for a mortgage purchase program with

continuing involvement by the originator, including takeout commitments, as a secured borrowing with pledge

of collateral, i.e., a loan to the originator secured by the residential mortgage loans, rather than a purchase of

mortgage loans.

When loans obtained in a mortgage purchase program do not qualify for sale accounting, the financing

provided to the originator (if not held for trading purposes) should be reported in Call Report Schedule RC-C,

Part I, item 9.a, “Loans to nondepository financial institutions,” and on the balance sheet in Schedule RC,

item 4.a, “Loans and leases held for sale,” or item 4.b, “Loans and leases, net of unearned income,” as

appropriate. For risk-based capital purposes, a loan to a mortgage loan originator secured by residential

mortgages that is reported in Schedule RC-C, Part I, item 9.a, and is not past due 90 days or more or on

nonaccrual should be assigned a 100 percent risk weight and included in column I of Schedule RC-R, Part II,

item 4.d or 5.d, based on its balance sheet classification

arned income,” as

appropriate. For risk-based capital purposes, a loan to a mortgage loan originator secured by residential

mortgages that is reported in Schedule RC-C, Part I, item 9.a, and is not past due 90 days or more or on

nonaccrual should be assigned a 100 percent risk weight and included in column I of Schedule RC-R, Part II,

item 4.d or 5.d, based on its balance sheet classification.

In situations where the transaction between the mortgage loan originator and the transferee (acquiring)

institution is accounted for as a secured borrowing with pledge of collateral, the transferee (acquiring)

SUPPLEMENTAL INSTRUCTIONS – MARCH 2015

11

institution’s designation of the financing provided to the originator as held for sale is appropriate only when the

conditions in ASC Subtopic 310-10, Receivables – Overall (formerly AICPA Statement of Position 01-6,

"Accounting by Certain Entities (Including Entities With Trade Receivables) That Lend to or Finance the

Activities of Others") and the 2001 Interagency Guidance on Certain Loans Held for Sale have been met. In

these situations, the mortgage loan originator’s planned sale of the pledged collateral (i.e., the individual

residential mortgage loans) to a takeout investor is not relevant to the transferee institution’s designation of the

loan to the originator as held for investment or held for sale. In situations where the transferee institution

simultaneously extends a loan to the originator and transfers an interest (for example, a participation interest)

in the loan to the originator to another party, the transfer to the other party also should be evaluated to

determine whether the conditions in ASC Topic 860 for sale accounting treatment have been met

for investment or held for sale. In situations where the transferee institution

simultaneously extends a loan to the originator and transfers an interest (for example, a participation interest)

in the loan to the originator to another party, the transfer to the other party also should be evaluated to

determine whether the conditions in ASC Topic 860 for sale accounting treatment have been met. If this

transfer qualifies to be accounted for as a sale, the portion of the loan to the originator that is retained by the

transferee institution should be classified as held for investment when the transferee has the intent and ability

to hold that portion for the foreseeable future or until maturity or payoff (which is generally in the near term).

True-up Liability under an FDIC Loss-Sharing Agreement

An insured depository institution that acquires a failed insured institution may enter into a loss-sharing

agreement with the FDIC under which the FDIC agrees to absorb a portion of the losses on a specified pool of

the failed institution’s assets during a specified time period. The acquiring institution typically records an

indemnification asset representing its right to receive payments from the FDIC for losses during the specified

time period on assets covered under the loss-sharing agreement.

Since 2009, most loss-sharing agreements have included a true-up provision that may require the acquiring

institution to reimburse the FDIC if cumulative losses in the acquired loss-share portfolio are less than the

amount of losses claimed by the institution throughout the loss-sharing period. Typically, a true-up liability may

result because the recovery period on the loss-share assets (e.g., eight years) is longer than the period during

which the FDIC agrees to reimburse the acquiring institution for losses on the loss-share portfolio (e.g., five

years).

Consistent with U.S

olio are less than the

amount of losses claimed by the institution throughout the loss-sharing period. Typically, a true-up liability may

result because the recovery period on the loss-share assets (e.g., eight years) is longer than the period during

which the FDIC agrees to reimburse the acquiring institution for losses on the loss-share portfolio (e.g., five

years).

Consistent with U.S. GAAP and the Glossary entry for “Offsetting” in the Call Report instructions, institutions

are permitted to offset assets and liabilities recognized in the Report of Condition when a “right of setoff” exists.

Under ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 39, "Offsetting of

Amounts Related to Certain Contracts"), in general, a right of setoff exists when a reporting institution and

another party each owes the other determinable amounts, the reporting institution has the right to set off the

amounts each party owes and also intends to set off, and the right of setoff is enforceable at law. Because the

conditions for the existence of a right of offset in ASC Subtopic 210-20 normally would not be met with respect

to an indemnification asset and a true-up liability under a loss-sharing agreement with the FDIC, this asset and

liability should not be netted for Call Report purposes. Therefore, institutions should report the indemnification

asset gross (i.e., without regard to any true-up liability) in item 6 of Schedule RC-F, Other Assets, and any true-

up liability in item 4 of Schedule RC-G, Other Liabilities.

In addition, an institution should not continue to report assets covered by loss-sharing agreements in

Schedule RC-M, item 13 (and in Schedule RC-N, item 11, if appropriate) after the expiration of the loss-sharing

period even if the terms of the loss-sharing agreement require reimbursements from the institution to the FDIC

for certain amounts during the recovery period

G, Other Liabilities.

In addition, an institution should not continue to report assets covered by loss-sharing agreements in

Schedule RC-M, item 13 (and in Schedule RC-N, item 11, if appropriate) after the expiration of the loss-sharing

period even if the terms of the loss-sharing agreement require reimbursements from the institution to the FDIC

for certain amounts during the recovery period.

Amending Previously Submitted Report Data

Should your institution find that it needs to revise previously submitted Call Report data, please make the

appropriate changes to the data, ensure that the revised data passes the FFIEC-published validation criteria,

and submit the revised data file to the CDR using one of the two methods described in the banking agencies'

Financial Institution Letter for the June 30, 2015, report date. For technical assistance with the submission of

amendments to the CDR, please contact the CDR Help Desk by telephone at (888) CDR-3111, by fax at

(703) 774-3946, or by e-mail at CDR.Help@ffiec.gov.

SUPPLEMENTAL INSTRUCTIONS – MARCH 2015

12

Other Reporting Matters

For the following topics, institutions should continue to follow the guidance in the specified Call Report

Supplemental Instructions:

•

Troubled Debt Restructurings, Current Market Interest Rates, and ASU No. 2011-02 – Supplemental

Instructions for December 31, 2014

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201412.pdf)

•

Determining the Fair Value of Derivatives – Supplemental Instructions for June 30, 2014

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201406.pdf)

•

Indemnification Assets and Accounting Standards Update No

ket Interest Rates, and ASU No. 2011-02 – Supplemental

Instructions for December 31, 2014

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201412.pdf)

•

Determining the Fair Value of Derivatives – Supplemental Instructions for June 30, 2014

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201406.pdf)

•

Indemnification Assets and Accounting Standards Update No. 2012-06 – Supplemental Instructions for

June 30, 2014 (http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201406.pdf)

•

Other-Than-Temporary Impairment of Debt Securities – Supplemental Instructions for June 30, 2014

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201406.pdf)

•

Small Business Lending Fund – Supplemental Instructions for March 31, 2013

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201303.pdf)

•

Reporting purchased subordinated securities in Schedule RC-S – Supplemental Instructions for

September 30, 2011 (http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201109.pdf)

•

Treasury Department’s Capital Purchase Program – Supplemental Instructions for September 30, 2011

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201109.pdf)

•

Deposit insurance assessments – Supplemental Instructions for September 30, 2009

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_041_suppinst_200909.pdf)

•

Accounting for share-based payments under FASB Statement No

•

Treasury Department’s Capital Purchase Program – Supplemental Instructions for September 30, 2011

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_FFIEC041_suppinst_201109.pdf)

•

Deposit insurance assessments – Supplemental Instructions for September 30, 2009

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_041_suppinst_200909.pdf)

•

Accounting for share-based payments under FASB Statement No. 123 (Revised 2004), Share-Based

Payment – Supplemental Instructions for December 31, 2006

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_041_suppinst_200612.pdf)

•

Commitments to originate and sell mortgage loans – Supplemental Instructions for March 31, 2006

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_041_suppinst_200603.pdf) and June 30, 2005

(http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC031_041_suppinst_200506.pdf)

Call Report Software Vendors

For information on available Call Report preparation software products, institutions should contact:

Axiom Software Laboratories, Inc.

67 Wall Street, 17th Floor

New York, New York 10005

Telephone: (212) 248-4188

http://www.axiomsl.com

Cardinal Software

6700 Pioneer Parkway

Johnston, Iowa 50131

Telephone: (888) 262-3348

http://www.cardinal400.com

DBI Financial Systems, Inc.

P.O. Box 14027

Bradenton, Florida 34280

Telephone: (800) 774-3279

http://www.e-dbi.com

Fed Reporter, Inc.

28118 Agoura Road, Suite 202

Agoura Hills, California 91301

Telephone: (888) 972-3772

http://www.fedreporter.net

FIS Compliance Solutions

16855 West Bernardo Drive,

Suite 270

San Diego, California 92127

Telephone: (800) 825-3772

http://www.callreporter.com

FiServ, Inc.

1345 Old Cheney Road

Lincoln, Nebraska 68512

Telephone: (402) 423-2682

http://www.premier.fiserv.com

Jack Henry & Associates, Inc

Agoura Hills, California 91301

Telephone: (888) 972-3772

http://www.fedreporter.net

FIS Compliance Solutions

16855 West Bernardo Drive,

Suite 270

San Diego, California 92127

Telephone: (800) 825-3772

http://www.callreporter.com

FiServ, Inc.

1345 Old Cheney Road

Lincoln, Nebraska 68512

Telephone: (402) 423-2682

http://www.premier.fiserv.com

Jack Henry & Associates, Inc.

Regulatory Filing Group

7600B North Capital of Texas

Highway, Suite 320

Austin, Texas 78731

Telephone: (800) 688-9191

http://filing.jackhenry.com

Lombard Risk

One Gateway Center,

26th Floor

Newark, New Jersey 07102

Telephone: (973) 648-0900

http://www.lombardrisk.com

Wolters Kluwer Financial Services

130 Turner Street, Building 3,

4th Floor

Waltham, Massachusetts 02453

Telephone (800) 261-3111

http://www.wolterskluwer.com