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Board of Governors of the Federal Reserve System

Instructions for Preparation of

Consolidated Financial Statements forBank Holding Companies

Reporting Form FR Y9C

Reissued March 2007

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Contents for

Y-9C Instructions

Organization of the Instruction Book

The instruction book is divided into three sections:

(1) The General Instructions describing overall report-ing requirements.

(2) The Line Item Instructions for each schedule ofthe report for the consolidated bank holding com-pany.

(3) The Glossary presenting, in alphabetical order, defi-nitions and discussions of accounting treatmentsunder generally accepted accounting principles(GAAP) and other topics that require more extensivetreatment than is practical to include in the line item

instructions or that are relevant to several line itemsor to the overall preparation of these reports.

In determining the required treatment of particular trans-actions or portfolio items or in determining the defini

tions and scope of the various items, the General Instruc-tions, the line item instructions, and the Glossary (all ofwhich are extensively cross-referenced) must be used

jointly. A single section does not necessarily give thecomplete instructions for completing all the items of the

reports. The instructions and definitions in section (2) arenot necessarily self-contained; reference to more detailedtreatments in the Glossary may be needed. However, theGlossary is not, and is not intended to be, a com-prehensive discussion of accounting principles orreporting.

Additional copies of this instruction book may be obtainedfrom the Federal Reserve Bank in the district where thereporting bank holding company submits its FR Y-9Creports, or may be found on the Federal Reserve Boardspublic website (www.federalreserve.gov).

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GENERAL INSTRUCTIONS FOR PREPARATION OF FINANCIAL STATEMENTSFOR BANK HOLDING COMPANIES

Who Must Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-1

A. Reporting Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-1

B. Exemptions from Reporting the Bank Holding Company Statements . . . . . . . . . . . . . . . . . GEN-2C. Shifts in Reporting Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-2

Where to Submit the Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-2

When to Submit the Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-2

How to Prepare the Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-3A. Applicability of GAAP, Consolidation Rules and SEC Consistency . . . . . . . . . . . . . . . . . . GEN-3

Scope of the consolidated bank holding company to be reported in thesubmitted reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-3

Rules of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-3Reporting by type of office (for bank holding companies with foreign offices) . . . . . . . . GEN-4Exclusions from coverage of the consolidated report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-4

B. Report Form Captions, Non-applicable Items and Instructional Detail . . . . . . . . . . . . . . . . GEN-4C. Rounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-5D. Negative Entries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-5E. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GEN-6

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LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED FINANCIAL STATEMENTSFOR BANK HOLDING COMPANIES

Schedule HIConsolidated Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HI-1

Schedule HI-AChanges in Equity Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HI-A-1

Schedule HI-BCharge-Offs and Recoveries on Loans and Leases and Changes

in Allowance for Loan and Lease Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HI-B-1

Notes to the Income StatementPredecessor Financial Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- ISnotes-P-1

Notes to the Income StatementOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ISnotes-1

Schedule HCConsolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-1

Schedule HC-BSecurities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-B-1

Schedule HC-CLoans and Lease Financing Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-C-1

Schedule HC-DTrading Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-D-1Schedule HC-EDeposit Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-E-1Schedule HC-FOther Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-F-1Schedule HC-GOther Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-G-1Schedule HC-HInterest Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-H-1Schedule HC-IInsurance-Related Underwriting Activities (Including Reinsurance) . . . . . . HC-I-1Schedule HC-KQuarterly Averages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-K-1Schedule HC-LDerivatives and Off-Balance Sheet Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-L-1Schedule HC-MMemoranda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HC-M-1Schedule HC-NPast Due and Nonaccrual Loans, Leases, and Other Assets . . . . . . . . . . . . . . HC-N-1Schedule HC-PClosed-End 1-4 Family Residential Mortage Banking Activities. . . . . . . . . . HC-P-1

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GLOSSARY

Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 1

Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 1

Accounting Errors, Corrections of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 3

Accounting Estimates, Changes in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 3Accounting Principles, Changes in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 3

Accrued Interest Receivable Related to Credit Card Securitizations . . . . . . . . . . . . . . . . . . . . . . . GL- 3

Acquisition, Development, or Construction (ADC) Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . GL- 4

Agreement Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 4

Allowance for Loan and Lease Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 4

Applicable Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 6

Associated Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 6ATS Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 6

Bankers Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 6

Bank-Owned Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 8

Banks, U.S. and Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL- 9

Bill-of-Lading Draft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-11

Borrowings and Deposits in Foreign Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-11

Brokered Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-11Brokered Retail Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-11

Brokers Security Draft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-12

Business Combinations GL-12

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Coupon Stripping, Treasury Receipts, and STRIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-16

Custody Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-17

Dealer Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-17

Deferred Compensation Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-17

Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-19

Demand Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-19

Depository Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-19

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-19

Derivative Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-26

Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-31

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-31

Domestic Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-31

Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-31

Due Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-32

Edge and Agreement Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-32

Equity-Indexed Certificates of Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-32

Equity Method of Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-33

Excess Balance Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-33

Extinguishments of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-35

Extraordinary Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-35

Fails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-35

Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-36

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Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-43

Insurance Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Insurance Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Interest-Bearing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Interest Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

Internal-Use Computer Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-48

International Banking Facility (IBF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-49

Investments in Common Stock of Unconsolidated Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-50

Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-50

Lease Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-51

Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-52

Limited-Life Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-53

Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-53

Loan Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-54

Loan Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-55

Loans Secured By Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-57

Loss Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-58

Mandatory Convertible Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-58

Market (Fair)Value of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-58

Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-59

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Pass-through Reserve Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63

Perpetual Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63

Perpetual Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63

Policyholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63

Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63

Pools of Residential Mortgages, Participations in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-63Pools of Securities, Participations in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Preauthorized Transfer Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Premiums and Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Purchase Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Purchased Impaired Loans and Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-64

Put Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Real Estate, Loan Secured by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Reciprocal Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Reinsurance Recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Renegotiated Troubled Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Repurchase Agreements to Maturity and Long-Term Repurchase Agreements . . . . . . . . . . . . . GL-66

Repurchase/Resale Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-66

Reserve Balances, Pass-through . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-68

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Super NOW Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Suspense Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Syndications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Telephone Transfer Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Term Federal Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Trade Date and Settlement Date Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Trading Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-78

Transaction Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-79

Transfers of Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-79

Travelers Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-84

Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-84

Troubled Debt Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-84

Trust Preferred Securities as Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-86

Trust Preferred Securities Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-86

U.S. Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-87

U.S. Territories and Possessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-87

Valuation Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-87

Variable Interest Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-87

When-Issued Securities Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-88

Yield Maintenance Dollar Repurchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GL-89

FR Y-9C Checklist for Verifying Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHK-1

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INSTRUCTIONS FOR PREPARATION OF

Financial Statementsfor Bank Holding Companies

For purposes of this report, savings and loan holding companies are subject to the samereporting requirements as bank holding companies, unless otherwise noted in theseinstructions. All references to bank holding company(s) are inclusive of savings and

loan holding company(s) unless otherwise noted.1

GENERAL INSTRUCTIONS

Who Must Report

A. Reporting Criteria

All bank holding companies, regardless of size, arerequired to submit financial statements to the FederalReserve, unless specifically exempted (see description ofexemptions below).1

The specific reporting requirements for each bank hold-ing company depend upon the size of the holding com-pany, or other specific factors as determined by theappropriate Federal Reserve Bank. Bank holding compa-nies must file the appropriate forms as described below:

(1) Bank Holding Companies with Total Consoli-dated Assets of $500 Million or More. Bank hold-ing companies with total consolidated assets of$500 million or more (the top tier of a multi tiered

For tiered bank holding companies. When bankholding companies with total consolidated assets of$500 million, or more, own or control, or are ownedor controlled by, other bank holding companies (i.e.,are tiered bank holding companies), only the top-tier

holding company must file the FR Y-9C for theconsolidated bank holding company organizationunless the top-tier holding company is exempt fromreporting the FR Y-9C. If a top-tier holding companyis exempt from reporting the FR Y-9C, then thelower-tier holding company (with total consoli-dated assets of $500 million or more) must file theFR Y-9C.

In addition, such tiered bank holding companies,regardless of the size of the subsidiary bank holdingcompanies, must also submit, or have the top-tierbank holding company subsidiary submit, a separate

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Companies (FR Y-9SP) on a semiannual basis, as ofthe last calendar day of June and December.2

For tiered bank holding companies. When bankholding companies with total consolidated assets ofless than $500 million, own or control, or are ownedor controlled by, other bank holding companies (i.e.,

are tiered bank holding companies), the top-tierholding company must file the FR Y-9SP for thetop-tier parent company of the bank holding com-pany. In addition, such tiered bank holding compa-nies must also submit, or have the bank holdingcompany subsidiary submit, a separate FR Y-9SP foreach lower-tier bank holding company.

When a bank holding company that has total consoli-

dated assets of less than $500 million is a subsidiaryof a bank holding company that files the FR Y-9C,the bank holding company that has total consolidatedassets of less than $500 million would report on theFR Y-9LP rather than the FR Y-9SP.

The instructions for the FR Y-9LP, FR Y-9ES, and theFR Y-9SP are not included in this booklet but may beobtained from the Federal Reserve Bank in the districtwhere the bank holding company files its reports, or maybe found on the Federal Reserve Boards public website(www.federalreserve.gov/boarddocs/reportforms).

B Exemptions from Reporting the

(1) a bank holding company that has been granted anexemption under Section 4(d) of the Bank HoldingCompany Act; or

(2) a qualified foreign banking organization as definedby Section 211.23(a) of Regulation K (12 CFR211.23(a)) that controls a U.S. subsidiary bank.

Bank holding companies that are not required to fileunder the above criteria may be required to file this reportby the Federal Reserve Bank of the district in which theyare registered.

C. Shifts in Reporting Status

A top-tier bank holding company that reaches $500 mil-

lion or more in total consolidated assets as of June 30 ofthe preceding year must begin reporting the FR Y-9C andthe FR Y-9LP in March of the current year, and anylower-tier bank holding companies must begin reportingthe FR Y-9LP in March of the current year. If a top-tierbank holding company reaches $500 million or more intotal consolidated assets due to a business combination, areorganization, or a branch acquisition that is not abusiness combination, then the bank holding company

must begin reporting the FR Y-9C and the FR Y-9LPwith the first quarterly report date following the effectivedate of the business combination, reorganization, orbranch acquisition, and any lower-tier bank holding

General Instructions

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www.frbservices.org/centralbank/reportingcentral/index.html for procedures for electronic submission.

When to Submit the Reports

The Consolidated Financial Statements for Bank HoldingCompanies (FR Y-9C) are required to be submitted as ofMarch 31, June 30, September 30, and December 31. Thesubmission date for bank holding companies is 40 calen-dar days after the March 31, June 30, and September 30 asof dates unless that day falls on a weekend or holiday(subject to timely filing provisions). The submission datefor bank holding companies is 45 calendar days after theDecember 31 as of date. For example, the June 30 reportmust be received by August 9, and the December 31 report

by February 14.The term submission date is defined as the date bywhich the Federal Reserve must receive the bank holdingcompanys FR Y-9C.

If the submission deadline falls on a weekend or holiday,the report must be received on the first business day afterthe Saturday, Sunday, or holiday. Earlier submission aidsthe Federal Reserve in reviewing and processing the

reports and is encouraged. No extensions of time forsubmitting reports are granted.

The reports are due by the end of the reporting day onthe submission date (5:00 P.M. at each district Reserve

Scope of the consolidated bank holdingcompany to be reported in the submittedreports

For purposes of this report, the bank holding companyshould consolidate its subsidiaries on the same basis as it

does for its annual reports to the SEC or, for those bankholding companies that do not file reports with the SEC,on the same basis as described in generally acceptedaccounting principles (GAAP). Generally, under the rulesfor consolidation established by the SEC and by GAAP,bank holding companies should consolidate any com-pany in which it owns more than 50 percent of theoutstanding voting stock.

Each bank holding company shall account for any invest-ments in unconsolidated subsidiaries, associated compa-nies, and those corporate joint ventures over which thebank holding company exercises significant influenceaccording to the equity method of accounting, as pre-scribed by GAAP. The equity method of accounting isdescribed in Schedule HC, item 8. (Refer to the Glossaryentry for subsidiaries for the definitions of the termssubsidiary, associated company, and corporate jointventure.)

Rules of Consolidation


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expense related to such loans and deposits of the bankholding company and its consolidated subsidiary.)

Exception: For purposes of reporting the total assets ofcaptive insurance and reinsurance subsidiaries in Sched-ule HC-M, Memoranda, items 7(a) and 7(b), only, bankholding companies should measure the subsidiaries total

assets before eliminating intercompany transactionsbetween the consolidated subsidiary and other offices orsubsidiaries of the consolidated bank holding company.Otherwise, captive insurance and reinsurance subsidi-aries should be reported on a consolidated basis asdescribed in the preceding paragraph.

Subsidiaries of Subsidiaries. For a subsidiary of a bankholding company that is in turn the parent of one or more

subsidiaries:(1) Each subsidiary shall consolidate its majority-owned

subsidiaries in accordance with the consolidationrequirements set forth above.

(2) Each subsidiary shall account for any investments inunconsolidated subsidiaries, corporate joint venturesover which the bank holding company exercisessignificant influence, and associated companies

according to the equity method of accounting.Noncontrolling (minority) interests. A noncontrollinginterest, sometimes called a minority interest, is theportion of equity in a bank holding companys subsidiary

in the line item instructions. That is, as a general rule, theoffice information shall be reported at the same level ofconsolidation as the fully consolidated statement, shallreflect only transactions with parties outside the scopeof the consolidated bank holding company, and shallexclude all transactions between offices of the consoli-

dated bank holding company as defined above. See theGlossary entries for domestic office and foreignoffice for the definitions of these terms.

Exclusions from coverage of theconsolidated report

Subsidiaries where control does not rest with the par-ent. If control of a majority-owned subsidiary by the

bank holding company does not rest with the bankholding company because of legal or other reasons (e.g.,the subsidiary is in bankruptcy), the subsidiary is notrequired to be consolidated for purposes of the report.2

Thus, the bank holding companys investments in suchsubsidiaries are not eliminated in consolidation but willbe reflected in the reports in the balance sheet item forInvestments in unconsolidated subsidiaries and associ-ated companies (Schedule HC, item 8) and other trans-

actions of the bank holding company with such subsidi-aries will be reflected in the appropriate items of thereports in the same manner as transactions with unrelatedoutside parties. Additional guidance on this topic is


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be the same between the FR Y-9C report filed with theFederal Reserve and the financial statements filed withthe SEC.

B. Report Form Captions, Non-applicableItems and Instructional Detail

No caption on the report forms shall be changed in anyway. An amount or a zero should be entered for all itemsexcept in those cases where (1) the reporting bank hold-ing company does not have any foreign offices; (2) thereporting company does not have any depository institu-tions that are subsidiaries other than commercial banks;or (3) the reporting bank holding company has no con-solidated subsidiaries that render services in any fidu-

ciary capacity and its subsidiary banks have no trustdepartments. If the reporting bank holding company hasonly domestic offices, Schedule HC, items 13(b)(1) and13(b)(2), and Schedule HI, items 1(a)(2) and 2(a)(2)should be left blank. If the reporting company does nothave any depository institutions that are subsidiariesother than commercial banks, then Schedule HC-E, items2(a) through 2(e) should be left blank. If the reportingcompany does not have any trust activities, then

Schedule HI, item 5(a) should be left blank. Bank hold-ing company should leave blank memorandum items9(a) through 9(d) of Schedule HI if the reporting bankholding company does not have average trading assets of

comprehensive statement on accounting for bank holdingcompanies.

Questions and requests for interpretations of mattersappearing in any part of these instructions should beaddressed to the appropriate Federal Reserve Bank (thatis, the Federal Reserve Bank in the district where thebank holding company submits this report).

C. Rounding

For bank holding companies with total assets of less than$10 billion, all dollar amounts must be reported inthousands, with the figures rounded to the nearest thou-sand. Items less than $500 will be reported as zero. Forbank holding companies with total assets of $10 billionor more, all dollar amounts may be reported in thousands,but each bank holding company, at its option, may roundthe figures reported to the nearest million, with zerosreported in the thousands column. For bank holdingcompanies exercising this option, amounts less than$500,000 will be reported as zero.

Rounding could result in details not adding to their stated

totals. However, to ensure consistent reporting, therounded detail items should be adjusted so that the totalsand the sums of their components are identical.

On the Consolidated Financial Statements for Bank


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(2) Schedule HI, memorandum item 7 Other non-interest expense (itemize and describe the threelargest amounts that exceed 1 percent of ScheduleHI, items 1(h) and 5(m)).

(3) Schedule HI, item 5(e), Venture capital revenue.

(4) Schedule HI, item 5(f), Net servicing fees.

(5) Schedule HI, item 5(g), Net securitizationincome.

(6) Schedule HI-A, item 12, Other comprehensiveincome.

(7) Schedule HC, item 8, Investments in unconsoli-dated subsidiaries and associated companies.

(8) Schedule HC, item 26(a), Retained earnings.

(9) Schedule HC, item 26(b), Accumulated othercomprehensive income.

(10) Schedule HC, item 26(c), Other equity capitalcomponents.

(11) Schedule HC, item 27(a), Total bank holdingcompany equity capital.

(12) Schedule HC, item 28, Total equity capital.

(13) Schedule HC-C, items 10, 10(a), and 10(b), onLease financing receivables (net of unearned

changes in the bank holding companys own cred-itworthiness.

(20) Schedule HC-R, item 8, Subtotal.

(21) Schedule HC-R, item 10, Other additions to(deductions from) Tier 1 capital.

(22) Schedule HC-R, item 11, Tier 1 capital.

(23) Schedule HC-R, item 21, Total risk-based capital.

(24) Schedule HC-R, Column B, Items Not Subjectto Risk-Weighting, for asset categories in items 34through 43.

When negative entries do occur in one or more of theseitems, they shall be recorded with a minus (2) sign rather

than in parenthesis.On the Consolidated Report of Income (Schedule HI),negative entries may appear as appropriate. Income itemswith a debit balance and expense items with a creditbalance must be reported with a minus (2) sign.

E. Confidentiality

The completed version of this report generally is avail-able to the public upon request on an individual basiswith the exception of any amounts reported in ScheduleHI, memoranda item 7(g), FDIC deposit insurance


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System if the Board of Governors determines that thedisclosure of such information is in the public interest.

F. Verification and Signatures

Verification. All addition and subtraction should bedouble-checked before reports are submitted. Totals andsubtotals in supporting materials should be cross-checkedto corresponding items elsewhere in the reports. Before areport is submitted, all amounts should be compared withthe corresponding amounts in the previous report. If thereare any unusual changes from the previous report, a briefexplanation of the changes should be provided to theappropriate Reserve Bank.

Signatures. The Consolidated Financial Statements for

Bank Holding Companies must be signed by the ChiefFinancial Officer of the bank holding company (or by theindividual performing this equivalent function). By sign-ing the cover page of this report, the authorized officeracknowledges that any knowing and willful misrepresen-tation or omission of a material fact on this reportconstitutes fraud in the inducement and may subject theofficer to legal sanctions provided by 18 USC 1001 and1007.

Bank holding companies must maintain in their files amanually signed and attested printout of the data submit-ted. The cover page of the Reserve Bank-supplied,holding companys software or from the Federal

actions) differs from the reporting bank holding com-panys interpretation, the Federal Reserve may requirethe bank holding company to reflect the event(s) ortransaction(s) in its FR Y-9C in accordance with theFederal Reserves interpretation and to amend previouslysubmitted reports. The Federal Reserve will consider the

mate-riality of such event(s) or transaction(s) in making adetermination about requiring the bank holding companyto apply the Federal Reserves interpretation and to amendpreviously submitted reports. Materiality is a qualitativecharacteristic of accounting information which is definedin FASB Concepts No. 2 as the magnitude of anomission or misstatement of accounting information that,in the light of surrounding circumstances, make it prob-able that the judgment of a reasonable person relying on

the information would have been changed or influencedby the omission or misstatement.

The Federal Reserve may require the filing of amendedConsolidated Financial Statements for Bank HoldingCompanies if reports as previously submitted containsignificant errors. In addition, a bank holding companyshould file an amended report when internal or externalauditors make audit adjustments that result in a restate-ment of financial statements previously submitted to theFederal Reserve.

The Federal Reserve also requests that bank holdingcompanies that have restated their prior period financial


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LINE ITEM INSTRUCTIONS FOR

Consolidated Report of IncomeSchedule HI

The line item instructions should be read in conjunction with the Glossary and othersections of these instructions. See the discussion of the Organization of the InstructionBooks in the General Instructions. For purposes of these line item instructions, the

FASB Accounting Standards Codification is referred to as ASC.


Report in accordance with these instructions all incomeand expense of the consolidated bank holding companyfor the calendar year-to-date. Include adjustments ofaccruals and other accounting estimates made shortlyafter the end of a reporting period which relate to theincome and expense of the reporting period.

For purposes of this report, a savings and loan holdingcompany should report income from its savings associa-tion(s), nonbank subsidiary(s) and subsidiary savings andloan holding company(s) (as defined in section 238.2 ofRegulation LL) following the same guidelines andaccounting rules set forth in these instructions for a bank

holding company.

Bank holding companies that began operating during thereporting period should report in the appropriate items ofSchedule HI all income earned and expense incurred

Assets and liabilities accounted under the fair valueoption Under U.S. generally accepted accountingprinciples (GAAP) (i.e., ASC Subtopic 825-10, FinancialInstruments Overall (formerly FASB Statement No.159, The Fair Value Option for Financial Assets and

Financial Liabilities), ASC Subtopic 815-15, Derivativesand Hedging Embedded Derivatives (formerly FASBStatement No. 155, Accounting for Certain HybridFinancial Instruments), and ASC Subtopic 860-50, Trans-fers and Servicing Servicing Assets and Liabilities(formerly FASB Statement No. 156, Accounting forServicing of Financial Assets)), the bank holding com-pany may elect to report certain assets and liabilities atfair value with changes in fair value recognized in

earnings. This election is generally referred to as the fairvalue option. If the bank holding company has elected toapply the fair value option to interest-bearing financialassets and liabilities, it should report the interest income

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fair value option has been applied to a beneficial interestin securitized financial assets within the scope of ASCSubtopic 325-40, Investments-Other Beneficial Inter-ests in Securitized Financial Assets (formerly EmergingIssues Task Force Issue No. 99-20, Recognition of Inter-est Income and Impairment on Purchased and Retained

Beneficial Interests in Securitized Financial Assets),interest income should be measured in accordance withthe consensus in this issue. Similarly, when the fair valueoption has been applied to a purchased impaired loan ordebt security accounted for under ASC Subtopic 310-30,Receivables Loans and Debt Securities Acquired withDeteriorated Credit Quality (formerly AICPA Statementof Position 03-3, Accounting for Certain Loans or DebtSecurities Acquired in a Transfer), interest income on the

loan or debt security should be measured in accordancewith this Subtopic when accrual of income is appropriate.For further information, see the Glossary entry for Pur-chased Impaired Loans and Debt Securities.

Revaluation adjustments, excluding amounts reported asinterest income and interest expense, to the carryingvalue of all assets and liabilities reported in Schedule HCat fair value under a fair value option (excluding servic-ing assets and liabilities reported in Schedule HC, item

10(b), Other intangible assets, and Schedule HC, item20, Other liabilities, respectively, and assets and liabili-ties reported in Schedule HC, item 5, Trading assets,and Schedule HC item 15 Trading liabilities respec-

(2) Loan origination fees, direct loan origination costs,and purchase premiums and discounts on loans heldfor investment, all of which should be deferred andrecognized over the life of the related loan as anadjustment of yield under ASC Subtopic 310-20,Receivables Nonrefundable Fees and Other Costs

(formerly FASB Statement No. 91, Accounting forNonrefundable Fees and Costs Associated with Origi-nating or Acquiring Loans and Initial Direct Costs of

Leases) as described in the Glossary entry for loanfees. See exclusion (3) below.

(3) Loan commitment fees (net of direct loan originationcosts) that must be deferred over the commitmentperiod and recognized over the life of the related loanas an adjustment of yield under ASC Subtopic 310-20

as described in the Glossary entry for loan fees.

(4) Investigation and service charges, fees representing areimbursement of loan processing costs, renewal andpast-due charges, prepayment penalties, and feescharged for the execution of mortgages or agree-ments securing the bank holding companys loans.

(5) Charges levied against overdrawn accounts based onthe length of time the account has been overdrawn,

the magnitude of the overdrawn balance, or whichare otherwise equivalent to interest. See exclusion (6)below.

Schedule HI

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is sold (rather than amortized). The net fees or costsand purchase premium or discount are part of therecorded investment in the loan. When the loan issold, the difference between the sales price and therecorded investment in the loan is the gain or loss onthe sale of the loan. See exclusion (4) below.

(4) Net gains (losses) from the sale of all assets report-able as loans (report in Schedule HI, item 5(i), Netgains (losses) on sales of loans and leases). Refer tothe Glossary entry for transfers of financial assets.

(5) Reimbursements for out-of-pocket expenditures (e.g.,for the purchase of fire insurance on real estatesecuring a loan) made by the bank holding companyfor the account of its customers. If the bank holding

companys expense accounts were charged with theamount of such expenditures, the reimbursementsshould be credited to the same expense accounts.

(6) Transaction or per item charges levied against depositaccounts for the processing of checks drawn againstinsufficient funds that the bank holding companyassesses regardless of whether it decides to pay,return, or hold the check, so-called NSF checkcharges (report as Service charges on deposit

accounts (in domestic offices), in Schedule HI, item5(b), or, if levied against deposit accounts in foreignoffices, as Other noninterest income in ScheduleHI item 5(l)) See inclusion (5) above

Line Item 1(a)(1)(b) Interest and fee income on allother loans secured by real estate.

Report all interest, fees, and similar charges leviedagainst or associated with all loans secured by real estate(in domestic offices) reportable in Schedule HC-C, items1(a), 1(b), 1(d), and 1(e), column B. Include interest andfee income on loans secured by 1-4 family residentialconstruction loans, but exclude such income on all otherloans secured by 1-4 family residential properties.

Line Item 1(a)(1)(c) Interest and fee income on allother loans.

Report all interest, fees, and similar charges levied

against or associated with all other loans (in domesticoffices) (other than loans secured by real estate in domes-tic offices) reportable in Schedule HC-C, items 2 through9, column B.

Line Item 1(a)(2) Interest and fee income on loansin foreign offices, Edge and Agreement subsidiaries,and IBFs.

Report all interest, fees, and similar charges leviedagainst or associated with all loans in foreign offices,Edge and Agreement subsidiaries, and IBFs reportable inSchedule HC-C column A items 1 through 9

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Line Item 1(c) Interest income on balances duefrom depository institutions.

Report all income on assets reportable in Schedule HC,item 1(b), Interest-bearing balances due from deposi-tory Institutions, including interest-bearing requiredreserve and excess balances due from Federal Reserve

Banks. Include interest income earned on interest-bearingbalances due from depository institutions that are reportedat fair value under a fair value option. However, excludeany credit associated with clearing balances due fromFederal Reserve Banks.

Line Item 1(d) Interest and dividend income onsecurities.

Report in the appropriate subitem all income on assetsthat are reportable in Schedule HC-B, Securities. Includeaccretion of discount on securities for the current period.Deduct current amortization of premium on securi-ties. (Refer to the Glossary entry for premiums anddiscounts.)

Include interest and dividends on securities held in theconsolidated bank holding companys portfolio, loaned,sold subject to repurchase, or pledged as collateral for

any purpose.

Include interest received at the sale of securities to theextent that such interest had not already been accrued onthe consolidated bank holding companys books

unrealized holding gains (losses) in Schedule HC,item 26(b), Accumulated other comprehensiveincome, and the calendar year-to-date change insuch net unrealized holding gains (losses) in Sched-ule HI-A, item 10, Other comprehensive income).

(3) Income from advances to, or obligations of, majority-

owned subsidiaries not consolidated, associated com-panies, and those corporate joint ventures over whichthe consolidated bank holding company exercisessignificant influence (report as Noninterest incomein the appropriate subitem of Schedule HI, item 5).

Line Item 1(d)(1) U.S. Treasury securities and U.S.government agency obligations (excludingmortgage-backed securities).

Report income from all securities reportable in Sched-ule HC-B, item 1, U.S. Treasury securities, and item 2,U.S. government agency obligations. Include accretionof discount on U.S. Treasury bills.

Line Item 1(d)(2) Mortgage-backed securities.

Report all income from securities reportable in Sched-ule HC-B, item 4, Mortgage-backed securities.

Line Item 1(d)(3) All other securities.

Report in the appropriate subitem income from all otherdebt securities and from all equity securities of com

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subitem of item 5 and report extraordinary items, netof applicable taxes and minority interest, in Sched-ule HI, item 12).

Line Item 1(e) Interest income from tradingassets.

Report the interest income earned on assets reportable inSchedule HC, item 5, Trading assets.

Include accretion of discount on assets held in tradingaccounts that have been issued on a discount basis, suchas U.S. Treasury bills and commercial paper.

Exclude gains (losses) and fees from trading assets,which should be reported in Schedule HI, item 5(c),Trading revenue. Also exclude revaluation adjust-

ments from the periodic marking to market of derivativecontracts held for trading purposes, which should bereported as trading revenue in Schedule HI, item 5(c).The effect of the periodic net settlements on thesederivative contracts should be included as part of therevaluation adjustments from the periodic marking tomarket of the contracts.

Line Item 1(f) Interest income on federal funds

sold and securities purchased under agreements toresell.

Report the gross revenue from assets reportable in Sched-ule HC, item 3, Federal funds sold and securities

proportionate share of the income or loss beforeextraordinary items and other adjustments from itscommon stock investments in unconsolidated sub-sidiaries, associated companies, and those corporate

joint ventures over which the bank holding companyexercises significant influence (report in item 5(l),

Other noninterest income) and the consolidatedbank holding companys proportionate share of mate-rial extraordinary items and other adjustments ofthese entities (report in item 12, Extraordinaryitems net of applicable taxes and minority interest).

(3) Interest received on other assets not specified above.

Line Item 1(h) Total interest income.

Report the sum of items 1(a) through 1(g).

Line Item 2 Interest expense.

Line Item 2(a) Interest on deposits.

Report in the appropriate subitem all interest expense,including amortization of the cost of merchandise orproperty offered in lieu of interest payments, on depositsreportable in Schedule HC, item 13(a)(2), Interest-bearing deposits in domestic offices, and Schedule HC,item 13(b)(2), Interest-bearing deposits in foreign offices,Edge and Agreement subsidiaries, and IBFs.

Exclude the cost of gifts or premiums (whether in the

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Deduct from the gross interest expense of the appropriatecategory of time deposits penalties for early withdrawals,or portions of such penalties, that represent the forfeitureof interest accrued or paid to the date of withdrawal. Ifmaterial, portions of penalties for early withdrawals thatexceed the interest accrued or paid to the date of with-

drawal should not be treated as a reduction of interestexpense but should be included in Other noninterestincome in Schedule HI, item 5(l).

Line Item 2(a)(1) Interest on deposits in domesticoffices.

Line Item 2(a)(1)(a) Interest on time deposits of$100,000 or more.

Report interest expense on all time deposits reportablein Schedule HC-E, items 1(e) and 2(e), Time depositsof $100,000 or more in domestic offices of commer-cial banks and in domestic offices of other depositoryinstitutions.

Line Item 2(a)(1)(b) Interest on time deposits of

less than $100,000.Report in this item all interest expense reportable inSchedule HC-E, items 1(d) and 2(d), Time deposits ofless than $100,000 in domestic offices of subsidiary

Line Item 2(b) Expense of federal fundspurchased and securities sold under agreements torepurchase.

Report the gross expense of all liabilities reportable inSchedule HC, item 14, Federal funds purchased andsecurities sold under agreements to repurchase. Include

the contractual amount of interest expense incurred onfederal funds purchased and securities sold under agree-ments to repurchase that are reported at fair value under afair value option.

Report the income of federal funds sold and securitiespurchased under agreements to resell in Schedule HI,item 1(f); do not deduct from the gross expense reportedin this item. However, if amounts recognized as payables

under repurchase agreements have been offset againstamounts recognized as receivables under reverse repur-chase agreements and reported as a net amount inSchedule HC, Balance Sheet, in accordance with ASCSubtopic 210-20, Balance Sheet Offsetting (formerlyFASB Interpretation No. 41, Offsetting of Amounts

Related to Certain Repurchase and Reverse RepurchaseAgreements), the income and expense from these agree-ments may be reported on a net basis in Schedule HI,

Income Statement.

Line Item 2(c) Interest on trading liabilities andother borrowed money.

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debentures are reported at fair value under a fair valueoption, in which case issuance costs should be expensedas incurred).

Exclude from this item interest on any reportable notespayable to unconsolidated special purpose entities thatissue trust preferred securities (included in Schedule HC,

item 19(b), Subordinated notes payable to unconsoli-dated trusts issuing trust preferred securities, and trustpreferred securities issued by consolidated special pur-pose entities). Report this interest expense in ScheduleHI, item 2(e), Other interest expense.

Exclude from this item the amortization of expensesincurred in the issuance of these notes payable. Capital-ize such expenses, if material, and amortize them over

the life of the related notes payable. Report these amor-tized issuance costs in Schedule HI, item 2(e).

Exclude dividends declared or paid on limited-life pre-ferred stock (report dividends declared in Schedule HI-A,item 10).

Line Item 2(e) Other interest expense.

Report in this item the interest expense on all other

liabilities not reported in Schedule HI, items 2(a) through2(d) above.

Line Item 2(f) Total interest expense.

Exclude any provision for credit losses on off-balancesheet credit exposures which should be reported inSchedule HI, item 7(d), Other noninterest expense.

The amount reported here may differ from the bad debtexpense deduction taken for federal income tax purposes.(Refer to the Glossary entry for allowance for loan and

lease losses for additional information.)

Line Item 5 Noninterest income:

Line Item 5(a) Income from fiduciary activities.

Report gross income from services rendered by the trustdepartments of the bank holding companys bankingsubsidiaries or by any of the bank holding companys

consolidated subsidiaries acting in any fiduciary capacity.Include commissions and fees on the sales of annuities bythese entities that are executed in a fiduciary capacity.

Exclude commissions and fees received for the accumu-lation or disbursement of funds deposited to IndividualRetirement Accounts (IRAs) or Keogh Plan accountswhen they are not handled by the trust departmentsof the holding companys subsidiary banks (report initem 5(b), Service charges on deposit accounts in

domestic offices).

Leave this item blank if the subsidiary banks of thereporting bank holding company have no trust depart-

t d th b k h ldi h lid t d

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(6) For the closing of savings accounts before a speci-fied minimum period of time has elapsed.

(7) For accounts which have remained inactive forextended periods of time or which have becomedormant.

(8) For deposits to or withdrawals from deposit accountsthrough the use of automated teller machines orremote service units.

(9) For the processing of checks drawn against insuffi-cient funds, so-called NSF check charges, thatthe subsidiary banks of the bank holding companyassess regardless of whether it decides to pay,return, or hold the check. Exclude subsequentcharges levied against overdrawn accounts based

on the length of time the account has been over-drawn, the magnitude of the overdrawn balance, orwhich are otherwise equivalent to interest (report inthe appropriate subitem of item 1(a)(1), Interestand fee income on loans in domestic offices).

(10) For issuing stop payment orders.

(11) For certifying checks.

(12) For the accumulation or disbursement of fundsdeposited to Individual Retirement Accounts (IRAs)or Keogh Plan accounts when not handled by thetrust departments of subsidiary banks of the report-

Include as trading revenue:

(1) Revaluation adjustments to the carrying value of cashinstruments reportable in Schedule HC, item 5,Trading assets, and Schedule HC, item 15, Trad-ing liabilities, resulting from the periodic markingto market of such instruments.

(2) Revaluation adjustments from the periodic markingto market of interest rate, foreign exchange rate,commodity, and equity derivative contracts report-able in Schedule HC-L, item 12, Total gross notionalamount of derivative contracts held for trading, andcredit derivative contracts reportable in ScheduleHC-L, item 7, Credit derivatives, that are held fortrading purposes. The effect of the periodic net

settlements on derivative contracts held for tradingpurposes should be included as part of the revalua-tion adjustments from the periodic marking to marketof these contracts.

(3) Incidental income and expense related to the pur-chase and sale of assets and liabilities reportablein Schedule HC, item 5, Trading assets, andSchedule HC, item 15, Trading liabilities, andoff-balance-sheet derivative contracts reportable in

Schedule HC-L, item 12, Total gross amount ofderivative contracts held for trading, and creditderivatives contracts reportable in Schedule HC-L,item 7 that are held for trading purposes

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Also include the bank holding companys proportionateshare of the income or loss before extraordinary itemsand other adjustments from its investments in equitymethod investees that are principally engaged in securi-ties brokerage activities. Equity method investees includeunconsolidated subsidiaries; associated companies; and

corporate joint ventures, unincorporated joint ventures,general partnerships, and limited partnerships over whichthe bank holding company exercises significant influ-ence.

Line Item 5(d)(2) Investment banking, advisory,and underwriting fees and commissions.

Report fees and commissions from underwriting (or

participating in the underwriting of) securities, privateplacements of securities, investment advisory and man-agement services, merger and acquisition services, andother related consulting fees. Include fees and commis-sions from the placement of commercial paper, both fortransactions issued in the bank holding companys nameand transactions in which the bank holding company actsas an agent for a third party issuer.

Also include the bank holding companys proportionate

share of the income or loss before extraordinary itemsand other adjustments from its investments in equitymethod investees that are principally engaged in invest-ment banking advisory or securities underwriting activi-

capacity (report in Schedule HI, item 5(a), Income fromfiduciary activities).

Also include the bank holding companys proportionateshare of the income or loss before extraordinary itemsand other adjustments from its investments in equitymethod investees that are principally engaged in annuity

sales. Equity method investees include unconsolidatedsubsidiaries; associated companies; and corporate jointventures, unincorporated joint ventures, general partner-ships, and limited partnerships over which the bankholding company exercises significant influence.

Line Item 5(d)(4) Underwriting income frominsurance and reinsurance activities.

Report the amount of premiums earned by bank holdingcompany subsidiaries engaged in insurance underwritingor reinsurance activities. Include earned premiums from(a) life and health insurance and (b) property and casualtyinsurance, whether (direct) underwritten business orceded or assumed (reinsured) business. Insurance premi-ums should be reported net of any premiums transferredto other insurance underwriters/reinsurers in conjunctionwith reinsurance contracts.

Also include the bank holding companys proportionateshare of the income or loss before extraordinary itemsand other adjustments from its investments in equity

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(2) Fees earned from customer referrals for insuranceproducts to insurance companies and insurance agen-cies external to the consolidated bank holding com-pany.

Also include management fees earned from separateaccounts and universal life products.

Exclude income from annuity sales and referrals (see theinstructions for Schedule HI, item 5(d)(3), above, forinformation on reporting such income).

Also include the bank holding companys proportionateshare of the income or loss before extraordinary itemsand other adjustments from its investments in equitymethod investees that are principally engaged in insur-

ance product sales and referrals. Equity method investeesinclude unconsolidated subsidiaries; associated compa-nies; and corporate joint ventures, unincorporated jointventures, general partnerships, and limited partnershipsover which the bank holding company exercises signifi-cant influence.

Line Item 5(e) Venture capital revenue.

In general, venture capital activities involve the provid-ing of funds, whether in the form of loans or equity, andtechnical and management assistance, when needed andrequested, to start-up or high-risk companies specializing

Line Item 5(f) Net servicing fees.

Report income from servicing real estate mortgages,credit cards, and other financial assets held by others.Report any premiums received in lieu of regular servic-ing fees on such loans only as earned over the life of theloans. For servicing assets and liabilities measured under

the amortization method, bank holding companies shouldreport servicing income net of the related servicingassets amortization expense, include impairments recog-nized on servicing assets, and also include increases inservicing liabilities recognized when subsequent eventshave increased the fair value of the liability above itscarrying amount. For servicing assets and liabilitiesremeasured at fair value under the fair value option,include changes in the fair value of these servicing assets

and liabilities. For further information on servicing, seethe Glossary entry for servicing assets and liabilities.

Line Item 5(g) Net securitization income.

Report net gains (losses) on assets sold in the bankholding companys own securitization transactions, i.e.,net of transaction costs. Include unrealized losses (andrecoveries of unrealized losses) on loans and leases held

for sale in the bank holding companys own securitiza-tion transactions. Report fee income from securitizations,securitization conduits, and structured finance vehicles,including fees for providing administrative support,li idit t i t t t i k t dit

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Line Item 5(i) Net gains (losses) on sales of loansand leases.

Report the amount of net gains (losses) on sales and otherdisposals of loans and leases (reportable in Schedule HC-C), including unrealized losses (and subsequent recover-ies of such net unrealized losses) on loans and leases held

for sale. Exclude net gains (losses) on loans and leasessold in the bank holding companys own securitizationtransactions and unrealized losses (and recoveries ofunrealized losses) on loans and leases held for sale in thebank holding companys own securitization transactions(report these gains (losses) in Schedule HI, item 5(g),Net securitization income).

Line Item 5(j) Net gains (losses) on sales of other

real estate owned.Report the amount of net gains (losses) on sales and otherdisposals of other real estate owned (reportable in Sched-ule HC, item 7), increases and decreases in the valuationallowance for foreclosed real estate, and write-downs ofother real estate owned subsequent to acquisition (orphysical possession) charged to expense. Do not includeas a loss on other real estate owned any amount chargedto the allowance for loan and lease losses at the time offoreclosure (actual or physical possession) for the differ-ence between the carrying value of a loan and the fairvalue less cost to sell of the foreclosed real estate.

nent of other noninterest income, and the dollar amountof such component, that is greater than $25,000 andexceeds 3 percent of the other noninterest incomereported in this item. If net losses have been reported inthis item for a component of Other noninterest income,use the absolute value of such net losses to determine

whether the amount of the net losses is greater than$25,000 and exceeds 3 percent of Other noninterestincome and should be reported in Schedule HI, Memo-randa item 6. (The absolute value refers to the magnitudeof the dollar amount without regard to whether theamount represents net gains or net losses.) Preprintedcaptions have been provided in Memoranda items 6(a)through 6(h) for reporting the following components ofother noninterest income if the component exceeds this

disclosure threshold: income and fees from the printingand sale of checks, earnings on/increase in value of cashsurrender value of life insurance, income and fees fromautomated teller machines (ATMS), rent and other incomefrom other real estate owned, safe deposit box rent, netchange in the fair values of financial instrumentsaccounted for under a fair value option, bank card andcredit card interchange fees and gains on bargain pur-chases. For each component of other noninterest income

that exceeds this disclosure threshold for which a pre-printed caption has not been provided describe the com-ponent with a clear but concise caption in Schedule HI,Memoranda items 6(i) through 6(k) These descriptions

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ule HI, item 5(a), Income from fiduciaryactivities).

(c) The sale of bank drafts, money orders, cashierschecks, and travelers checks.

(d) The collection of utility bills, checks, notes,

bond coupons, and bills of exchange.(e) The redemption of U.S. savings bonds.

(f) The handling of food stamps and the U.S.Treasury Tax and Loan Account, including feesreceived in connection with the issuance ofinterest-bearing demand notes by a depositoryinstitution that is a consolidated subsidiary ofthe reporting bank holding company.

(g) The execution of acceptances and the issuanceof commercial letters of credit, standby lettersof credit, defered payment letters of credit, andletters of credit issued for cash or its equivalent.

Exclude income on bankers acceptances andtrade acceptances (report such income in theappropriate subitem of Schedule HI, item 1(a),Interest and fee income on loans, or inSchedule HI, item 1(e), Interest income from

trading assets, as appropriate).

(h) The notarizing of forms and documents.

(i) The negotiation or management of loans from

(5) Annual or other periodic fees paid by holders ofcredit cards issued by the bank holding company orits consolidated subsidairies. Fees that are periodi-cally charged to cardholders shall be deferred andrecognized on a straight-line basis over the periodthe fee entitles the cardholder to use the card.

(6) Charges to merchants for the banks handling ofcredit card or charge sales when the bank holdingcompany does not carry the related loan accountson its books. Bank holding companies may reportthis income net of the expenses (except salaries)related to the handling of these credit card sales.

(7) Interchange fees earned from credit cardtransactions.

(8) Gross income received for performing data process-ing services for others. Do not deduct the expenseof performing such services for others (report in theappropriate items of noninterest expense).

(9) Loan commitment fees that are recognized duringthe commitment period (i.e., fees retrospectivelydetermined and fees for commitments where exer-cise is remote) or included in income when thecommitment expires and loan syndication fees thatare not required to be deferred. Refer to the Glos-sary entry for loan fees for further information.

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should consistently report these net gains (losses)either in this item or in Schedule HI, item 7(d).

(14) Rental fees applicable to operating leases for furni-ture and equipment rented to others.

(15) Interest received on tax refunds.

(16) Life insurance proceeds on policies for which thebank holding company or its subsidiaries are thebeneficiary.

(17) Credits resulting from litigation or other claims.

(18) Portions of penalties for early withdrawals of timedeposits that exceed the interest accrued or paid onthe deposit to the date of withdrawal, if material.Penalties for early withdrawals, or portions of suchpenalties, that represent the forfeiture of interestaccrued or paid to the date of withdrawal are areduction of interest expense and should be deductedfrom the gross interest expense of the appropriatecategory of time deposits in Schedule HI, item 2(a),Interest on deposits.

(19) Interest income from advances to, or obligations of,and the bank holding companys proportionate

share of the income or loss before extraordinaryitems and other adjustments from its investmentsin:

( ) U lid d b idi i

and other adjustments of these entities (report inSchedule HI, item 12, Extraordinary items andother adjustments, net of income taxes).

(20) Net gains (losses) on nonhedging derivative instru-ments held for purposes other than trading. Bankholding companies should consistently report these

net gains (losses) either in this item or in ScheduleHI, item 7(d). For further information, see theGlossary entry for derivative contracts.

(21) Gross income generated by securities contributed tocharitable contribution Clifford Trusts.

(22) Income from ground rents and air rights.

(23) Revaluation adjustments to the carrying value of all

assets and liabilities reported in Schedule HC at fairvalue under a fair value option (excluding servicingassets and liabilities reported in Schedule HC, item10(b), Other intangible assets, and Schedule HC,item 20, Other liabilities, respectively, and assetsand liabilities reported in Schedule HC, item 5,Trading assets, and Schedule HC, item 15,Trading liabilities, respectively) resulting fromthe periodic marking of such assets and liabilities to

fair value. Exclude the contractual amounts ofinterest income earned and interest expense incurredon financial assets and liabilities reported at fairvalue under a fair value option, which should be

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of individual held-to-maturity securities for other-than-temporary impairments. If the amount to be reported inthis item is a net loss, report with a minus (-) sign.

Do not adjust for applicable income taxes (income taxesapplicable to gains (losses) on held-to-maturity securitiesare to be included in the applicable income taxes reported

in item 9 below).

Exclude:

(1) Realized gains (losses) on available-for-sale securi-ties (report in Schedule HI, item 6(b) below) andtrading securities (report in Schedule HI, item 5(c)above).

(2) Net gains (losses) from the sale of detached securities

coupons and the sale of ex-coupon securities (reportin item 5(l), Other noninterest income, or item 7(d),Other noninterest expense, as appropriate). (Referto the Glossary entry for coupon stripping forfurther information.)

Line Item 6(b) Realized gains (losses) onavailable-for-sale securities.

Report the net gain or loss realized during the calendaryear-to-date from the sale, exchange, redemption, orretirement of all securities reportable in Schedule HC,item 2(b), Available-for-sale securities. The realized

(3) Net gains (losses) from the sale of detached securitiescoupons and the sale of ex-coupon securities (reportin item 5(l), Other noninterest income, or item 7(d),Other noninterest expense, as appropriate). (Referto the Glossary entry for coupon stripping forfurther information.)

Line Item 7 Noninterest expense:

Line Item 7(a) Salaries and employee benefits.

Report salaries and benefits of all officers and employeesof the bank holding company and its consolidated subsid-iaries including guards and contracted guards, temporaryoffice help, dining room and cafeteria employees, andbuilding department officers and employees (including

maintenance personnel). Include as salaries and employeebenefits:

(1) Gross salaries, wages, overtime, bonuses, incentivecompensation, and extra compensation.

(2) Social security taxes and state and federal unem-ployment taxes paid by the consolidated bank hold-ing company.

(3) Contributions to the consolidated bank holdingcompanys retirement plan, pension fund, profit-sharing plan, employee stock ownership plan,employee stock purchase plan, and employee sav-

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(10) Compensation expense (service component andinterest component) related to deferred compensa-tion agreements.

Exclude from salaries and employee benefits (report initem 7(d), Other noninterest expense):

(1) Amounts paid to attorneys, accountants, manage-ment consultants, investment counselors, and otherprofessionals who are not salaried officers oremployees of the bank holding company or itsconsolidated subsidiaries.

(2) The cost of bank holding company or consolidatedsubsidiary newspapers and magazines prepared fordistribution to bank holding company or its consoli-dated subsidiaries officers and employees.

(3) Premiums on life insurance policies for which thebank holding company or its consolidated subsidi-aries are the beneficiary.

(4) Dues, fees, and other expenses associated withmemberships in country clubs, social or privateclubs, civic organizations, and similar clubs andorganizations.

Line Item 7(b) Expenses of premises and fixedassets.

Report all noninterest expenses related to the use ofpremises equipment furniture and fixtures net of rental

ing capital lease assets, which are applicable to thecalendar year-to-date, whether they represent directreductions in the carrying value of the assets oradditions to accumulated depreciation or amortiza-tion accounts. Any method of depreciation or amor-tization conforming to accounting principles that

are generally acceptable for financial reportingpurposes may be used. However, depreciation forpremises and fixed assets may be based on theAccelerated Cost Recovery System (ACRS) usedfor federal income tax purposes if the results wouldnot be materially different from depreciation basedon the assets estimated useful life.

(2) All operating lease payments made by the bank

holding company or its consolidated subsidiarieson premises (including parking lots), equipment(including data processing equipment), furniture,and fixtures.

(3) Cost of ordinary repairs to premises (includingleasehold improvements), equipment, furniture, andfixtures.

(4) Cost of service or maintenance contracts for equip-

ment, furniture, and fixtures.

(5) Cost of leasehold improvements, equipment, furni-ture, and fixtures charged directly to expense and

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(11) Fuel, maintenance, and other expenses related tothe use of bank holding company- or consolidatedsubsidiary-owned automobiles, airplanes, and othervehicles for bank holding company or consolidatedsubsidiaries business.

Exclude from expenses of premises and fixed assets:

(1) Salaries and employee benefits (report such expensesfor all officers and employees of the bank holdingcompany and its consolidated subsidiaries in item 7(a),Salaries and employee benefits).

(2) Interest on mortgages, liens, or other encumbranceson premises or equipment owned, including theportion of capital lease payments representing inter-est expense (report in item 2(c), Interest on trading

liabilities and other borrowed money).

(3) All expenses associated with other real estate owned(report in item 7(d), Other noninterest expense).

(4) Gross rentals from other real estate owned and feescharged for the use of parking lots properly reportedas other real estate owned, as well as safe deposit boxrentals and rental fees applicable to operating leasesfor furniture and equipment rented to others (report

in item 5(l), Other noninterest income).

Line Item 7(c)(1) Goodwill impairment losses.

Report any impairment losses recognized during the

impaired would a goodwill impairment loss be recog-nized at the consolidated level.

Goodwill is considered impaired when the amount ofgoodwill exceeds its implied fair value at the reportingunit level. If the carrying amount of reporting unitgoodwill exceeds its implied fair value, an impairment

loss must be recognized in earnings in an amount equal tothat excess and reported in this item. The loss recognizedcannot exceed the carrying amount of the reporting unitsgoodwill. After a goodwill impairment loss is recog-nized, the adjusted carrying amount of goodwill shall beits new accounting basis. Subsequent reversal of a previ-ously recognized goodwill impairment loss is prohibitedonce the measurement of that loss is completed.

Goodwill of a reporting unit must be tested for impair-ment annually and between annual tests if an eventoccurs or circumstances change that would more likelythan not reduce the fair value of a reporting unit below itscarrying amount. Examples of such events or circum-stances include a significant adverse change in the busi-ness climate, unanticipated competition, a loss of keypersonnel, and an expectation that a reporting unit or asignificant portion of a reporting unit will be sold or

otherwise disposed of. In addition, goodwill must betested for impairment after a portion of goodwill has beenallocated to a business to be disposed of.

When a reporting unit is to be disposed of in its entirety

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Intangible assets that have finite useful lives must beamortized over their useful lives and must be reviewedfor impairment in accordance with ASC Topic 360,Property, Plant, and Equipment (formerly FASB State-ment No. 144, Accounting for the Impairment of Long-

Lived Assets).

Exclude the amortization expense of and any impairmentlosses on servicing assets, which should be netted againstthe servicing income reported in Schedule HI, item5(f), Net servicing fees, above.

Line Item 7(d) Other noninterest expense.

Report all operating expenses of the bank holding com-pany for the calendar year-to-date not required to bereported elsewhere in Schedule HI. Disclose in ScheduleHI, Memoranda items 7(a) through 7(n), each componentof other noninterest expense, and the dollar amount ofsuch component, that is greater that $25,000 and exceeds3 percent of the other noninterest expense reported in thisitem. If net gains have been reported in this item for acomponent of Other noninterest expense, use theabsolute value of such net gains to determine whether theamount of the net gains is greater than $25,000 andexceeds 3 percent of Other noninterest expense andshould be reported in Schedule HI, Memoranda item 7.(The absolute value refers to the magnitude of the dollaramount without regard to whether the amount representsnet gains or net losses ) Preprinted captions have been

disclose such amounts in the item with the preprintedcaption that most closely describes the predominant typeof expense incurred, and this categorization should beused consistently over time.

Include as other noninterest expense:

(1) Fees paid to directors and advisory directors for

attendance at board of directors or committee meet-ings (including travel and expense allowances).

(2) Premiums on fidelity insurance (blanket bond,excess employee dishonesty bond), directors andofficers liability insurance, and life insurance poli-cies for which the bank holding company or itsconsolidated subsidiaries are the beneficiary.

(3) Federal deposit insurance and Comptroller of the

Currency assessment expense net of all assessmentcredits during the period.

(4) Legal fees and other direct costs incurred in connec-tion with foreclosures and subsequent noninterestexpenses related to holdings of real estate ownedother than bank holding company (or its consoli-dated subsidiaries) premises (including deprecia-tion charges or other write-downs if prescribedby law or by regulatory agencies or if otherwise

appropriate).(5) Sales taxes, taxes based on the number of shares

of bank holding company stock outstanding, taxesbased on the consolidated bank holding companys

Schedule HI

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(9) Fees levied by deposit brokers that are, in sub-stance, retainer fees or that otherwise do not repre-sent an adjustment to the interest rate paid ondeposits the reporting bank acquires through bro-kers. However, report as interest expense on theappropriate category of deposits those finders fees

and brokers fees that do represent an adjustment tothe interest rate paid on brokered deposits.

(10) Research and development costs and costs incurredin the internal development of computer software.

(11) Net losses (gains) from all transactions involvingforeign currency or foreign exchange other thantrading transactions. Bank holding companiesshould consistently report these net losses (gains)

either in this item or in Schedule HI, item 5(l)above.

(12) Charges resulting from litigation or other claims.

(13) Charitable contributions including donations byClifford Trusts.

(14) Retainer fees, legal fees, and other fees and expensespaid to attorneys who are not officers or employeesof the bank holding company or its consolidated

subsidiaries.

(15) Office supplies purchased, printing, and postage.

(16) Telecommunications expenses including any

clubs, civic organizations, and similar clubs andorganizations.

(22) Civil money penalties and fines.

(23) All service charges, commissions, and fees leviedby others for the repossession of assets and the

collection of the consolidated bank holding com-panys loans or other assets, including charged-offloans or other charged-off assets.

(24) Expenses (except salaries) related to handling creditcard or charge sales received from merchants whenthe bank holding company or its consolidated sub-sidiaries do not carry the related loan accounts onits books. Bank holding companies are also permit-

ted to net these expenses against their charges tomerchants for the bank holding companys han-dling of these sales reported in item 5(l) above.

(25) The c

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