FFIEC 031 and 041 RC-C - LOANS AND LEASES
FFIEC 031 and 041 RC-C-6 RC-C - LOANS AND LEASES
(3-09)
Part I. (cont.)
Item No. Caption and Instructions
1.e
Secured by nonfarm nonresidential properties. Report in the appropriate subitem of
column B loans secured by real estate as evidenced by mortgages or other liens on nonfarm
nonresidential properties, including business and industrial properties, hotels, motels,
churches, hospitals, educational and charitable institutions, dormitories, clubs, lodges,
association buildings, "homes" for aged persons and orphans, golf courses, recreational
facilities, and similar properties.
Exclude loans for nonfarm nonresidential property construction and land development
purposes (report in Schedule RC-C, part I, item 1.a).
For purposes of reporting loans in Schedule RC-C, part I, items 1.e.(1) and 1.e.(2), below,
the determination as to whether a nonfarm nonresidential property is considered “owner-
occupied” should be made upon acquisition (origination or purchase) of the loan. However,
for purposes of determining whether existing nonfarm nonresidential real estate loans should
be reported as “owner-occupied” when a bank must first begin reporting such loans as of
March 31, 2007 (or March 31, 2008),
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the bank may consider the source of repayment either
when the loan was acquired or based on the most recent available information. Once a bank
determines whether a loan should be reported as “owner-occupied” or not, this determination
need not be reviewed thereafter.
1.e.(1)
Loans secured by owner-occupied nonfarm nonresidential properties. Report in
column B the amount of loans secured by owner-occupied nonfarm nonresidential properties.
“Loans secured by owner-occupied nonfarm nonresidential properties” are those nonfarm
nonresidential property loans for which the primary source of repayment is the cash flow from
the ongoing operations and activities conducted by the party, or an affiliate of the party, who
owns the property. Thus, for loans secured by owner-occupied nonfarm nonresidential
properties, the primary source of repayment is
not derived from third party, nonaffiliated,
rental income associated with the property (i.e., any such rental income is less than
50 percent of the source of repayment) or the proceeds of the sale, refinancing, or permanent
financing of the property. Include loans secured by hospitals, golf courses, recreational
facilities, and car washes unless the property is owned by an investor who leases the
property to the operator who, in turn, is not related to or affiliated with the investor (in which
case, the loan should be reported in Schedule RC-C, part I, item 1.e.(2), below). Also include
loans secured by churches unless the property is owned by an investor who leases the
property to the congregation (in which case, the loan should be reported in Schedule RC-C,
part I, item 1.e.(2), below).
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Reporting nonfarm nonresidential real estate loans as loans secured by “owner-occupied” properties or by other
properties, as appropriate, takes effect:
• March 31, 2007, for (1) all banks with $300 million or more in total assets as of December 31, 2005, or with foreign
offices, and (2) banks with less than $300 million in total assets as of December 31, 2005, and domestic offices
only whose total construction, multifamily, and nonfarm nonresidential real estate loans (Schedule RC-C, part I,
sum of items 1.a, 1.d, and 1.e) as of December 31, 2005, was greater than 150 percent of total equity capital
(Schedule RC, item 28) as of December 31, 2005; and
• March 31, 2008, for banks with less than $300 million in total assets as of December 31, 2005, and domestic
offices only that do not meet this percentage test.