1. 1 ALLL – TDR DISCUSSION Robert B. Coleman FDIC Regional Accountant San Francisco Division of Risk Management Supervision March 20, 2012

2. 2 Topics  ALLL - Loan impairment ASC Topic 310-10-35 ASC Topic 450-20 EvaluationEvaluation RecognitionRecognition MeasurementMeasurement Accounting/layeringAccounting/layering  TDR ASC Topic 310-40  Questions

3. 3 Topics  ASC 310-40 Troubled Debt Restructurings (TDRs) by Creditors  ASC 310-10-35 Impairment Measurement  ASC 450-20 Loss Contingencies  ASU 2011-02 – Clarification Guidance – Identifying TDRs Issued April 2011 Issued April 2011 Amends ASC Subtopic 310-40 Amends ASC Subtopic 310-40 http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498 http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498  Reports of Condition and Income Instructions – Glossary Loan Impairment, pages A-57, A-58 Loan Impairment, pages A-57, A-58 Troubled Debt Restructurings, pages A-61, A-62, A-85, A-86 Troubled Debt Restructurings, pages A-61, A-62, A-85, A-86 Nonaccrual, page A-59, A-60, A-61, A-62 Nonaccrual, page A-59, A-60, A-61, A-62 Reporting, page A-85 Reporting, page A-85  FFIEC December 2011 Call Report Supplemental Instructions  Interagency Policy Statement on Prudent CRE Workouts (2009) Authorities

4. 4 ALLL Methodology  FDIC ALLL Statement of Policy July 2, 2001 - Policy Statement on ALLL Methodologies and Documentation for Banks and Savings Institutions July 2, 2001 - Policy Statement on ALLL Methodologies and Documentation for Banks and Savings Institutions Implements ASC 450-20 (FAS 5) and ASC 310-10- 35(FAS 114)Implements ASC 450-20 (FAS 5) and ASC 310-10- 35(FAS 114) December 13, 2006 - Interagency Policy Statement on the ALLL December 13, 2006 - Interagency Policy Statement on the ALLL Replaces the 1993 ALLL Policy StatementReplaces the 1993 ALLL Policy Statement Provides expanded guidance on the 2001 Policy StatementProvides expanded guidance on the 2001 Policy Statement

5. 5 5 Overview of FAS 5/FAS 114 Framework FAS 5 FAS 114 “Anchor”- Pure Historical Rate Q-Factor Adj. FAS 114 Impaire d TDR’s Non- accrual Non- Accrual Calculated ALLL ALLL Disc Cash Flow Coll. Dep? FV of Collateral NoYes Combination = adjusted historical rate Pool by Risk Characteristics: Pass loans by loan segment or class Classified unimpaired by risk pool e.g. Watch, Special Mention and Sub Standard * Un- allocated *any amount labeled “unallocated” must be fully supported by documentary evidence. See Interagency Policy Statement on ALLL (2006), question no. 13.

6. 6 ALLL Methodology  Directional Consistency The ALLL level, as a percentage of the loan portfolio, should generally increase as credit quality deteriorates The ALLL level, as a percentage of the loan portfolio, should generally increase as credit quality deteriorates  Factors to consider Internal Adverse Classifications Internal Adverse Classifications Level and trend of non-accrual loans Level and trend of non-accrual loans Level and trend of past due loans Level and trend of past due loans Charge off history Charge off history Loan concentration levels Loan concentration levels

7. 7 ASC 450-20 (FAS 5)  Portfolio Segmentation by Loan type, past due status, and risk grades Loan type, past due status, and risk grades  Call Report Schedule RC-C Segments the portfolio by loan type Segments the portfolio by loan type  Smaller Non-Complex Institutions Smaller non-complex banks may segment the portfolio into broad loan categories Smaller non-complex banks may segment the portfolio into broad loan categories Appropriate for only small institutions offering a narrow range of loan products Appropriate for only small institutions offering a narrow range of loan products

8. 8 ASC 450-20 (FAS 5) Portfolio Segmentation  Larger Complex Institutions Typically offer a more diverse and complex mix of loan product Typically offer a more diverse and complex mix of loan product Start by segmenting into major loan types Start by segmenting into major loan types Should further segregate the portfolio into product line segments based on risk characteristics (i.e., greater granularity) Should further segregate the portfolio into product line segments based on risk characteristics (i.e., greater granularity)  Bankers should ensure ALLL segmentations reconcile to Call Report and/or General Ledger

9. 9 ALLL Methodology  Qualitative Factors - An institutions loss rates should be adjusted for the following factors: Levels of and trends of delinquencies & impaired loans Levels of and trends of delinquencies & impaired loans Levels of and trends of charge-offs and recoveries Levels of and trends of charge-offs and recoveries Trends in volume and terms of loans Trends in volume and terms of loans Effects of changes in risk selection, underwriting, lending policies, procedures, and practices Effects of changes in risk selection, underwriting, lending policies, procedures, and practices

10. 10 ALLL Methodology  Qualitative Factors (Cont.) Experience, ability, and depth of lending management Experience, ability, and depth of lending management National and local economic trends and conditions National and local economic trends and conditions Industry conditions Industry conditions Effects of changes in credit concentrations Effects of changes in credit concentrations  Management must maintain sufficient documentation to support their Q-Factor adjustments

11. 11 ALLL Methodology  Examiner Responsibilities* - Examiners should generally accept management's estimates when management has: Maintained effective loan review systems and controls for timely problem loan identification Maintained effective loan review systems and controls for timely problem loan identification Analyzed all significant factors affecting collectability of the portfolio Analyzed all significant factors affecting collectability of the portfolio Established an acceptable ALLL evaluation process that meets GAAP Established an acceptable ALLL evaluation process that meets GAAP Incorporates reasonable and properly supported assumptions, valuations, and judgments Incorporates reasonable and properly supported assumptions, valuations, and judgments *Per the 2006 ALLL SOP

12. 12 Examiner Responsibilities  If the examiner concludes that the reported ALLL level is not appropriate or determines that the ALLL process is deficient: Recommendations for correcting these deficiencies, including any examiner concerns regarding an appropriate level for the ALLL, should be noted in the report of examination Recommendations for correcting these deficiencies, including any examiner concerns regarding an appropriate level for the ALLL, should be noted in the report of examination

13. 13 Impairment Overview Four Major Decisions – ASC 310-10-35 (FAS 114) Four Major Decisions – ASC 310-10-35 (FAS 114) Evaluation - What type of loans will be reviewed for impairment?Evaluation - What type of loans will be reviewed for impairment? Recognition - Which loans are considered to be impaired?Recognition - Which loans are considered to be impaired? Measurement - How will the impairment be measured?Measurement - How will the impairment be measured? Accounting for impairment – Layering not allowed.Accounting for impairment – Layering not allowed.

14. 14 Impairment Evaluation  ASC 310-10-35 (FAS 114) What type of loans will be reviewed for impairment? What type of loans will be reviewed for impairment? An institution should apply its normal loan review procedures when identifying loans to be individually evaluated for impairment under ASC Topic 310 For example: Size, Delinquent, Watch list, other, etc.

15. 15 Impairment Recognition  ASC 310-10-35 (FAS 114)  Impairment Definition Loans are considered to be impaired when, based on current information and events, it is probable that the creditor will be unable to collect all interest and principal payments per contractual terms of the loan agreement.Loans are considered to be impaired when, based on current information and events, it is probable that the creditor will be unable to collect all interest and principal payments per contractual terms of the loan agreement. Probable - The future event or events are likely to occur. (As defined and used in FAS 5) The term "probable" is not intended to be so rigid as to require virtual certainty. The term "probable" is not intended to be so rigid as to require virtual certainty.

16. 16 Impairment Recognition The guidance does not specify how to determine it is probable that amounts due will not be collected. The guidance does not specify how to determine it is probable that amounts due will not be collected. Appropriate contractual terms are to be used in evaluating impairment. Appropriate contractual terms are to be used in evaluating impairment. Certain loans may not be impaired if interest continues to be accrued during the period of delay. Certain loans may not be impaired if interest continues to be accrued during the period of delay.

17. 17 Impairment Recognition Insignificant delays in payment or in timing are excluded from the criteria for recognition of impairment. Insignificant delays in payment or in timing are excluded from the criteria for recognition of impairment. A period of less than 90 days is probably an insignificant delay under FAS 114 par. 8. Loans whose terms are modified in a troubled debt restructuring are impaired and must be evaluated by following the specific guidance in Section 310-10-35. Loans whose terms are modified in a troubled debt restructuring are impaired and must be evaluated by following the specific guidance in Section 310-10-35.

18. 18 Impairment Recognition

19. 19 Impairment Per ALLL SOPs  2006 ALLL SOP – Question 11 A "Substandard" loan that is individually evaluated for impairment under FAS 114 would not automatically meet the definition of impaired. A "Substandard" loan that is individually evaluated for impairment under FAS 114 would not automatically meet the definition of impaired. However, if a "Substandard" loan is significantly past due or is in nonaccrual status, the borrower's performance and condition provide evidence that the loan is impaired. However, if a "Substandard" loan is significantly past due or is in nonaccrual status, the borrower's performance and condition provide evidence that the loan is impaired. Impairment is a performance issue. Impairment is a performance issue.

20. 20 Impairment per Call Report  Call Report Glossary – Loan Impairment (pg. 58) Nonaccrual - A loan that is not already in nonaccrual status when it is first identified as impaired will normally meet the criteria for placement in nonaccrual status at that time. Troubled Debt Restructurings - According to ASC Topic 310-10-35 (i.e., FASB 114), all loans restructured in troubled debt restructurings (TDR) are impaired loans.

21. 21 Impairment Recognition  A loan is impaired, even if it is performing and  Loan Officer contacts the borrower The borrower states he/she is: The borrower states he/she is: Having financial difficultiesHaving financial difficulties Expresses an inability to:Expresses an inability to: Continue to make monthly interest payments Continue to make monthly interest payments Convert the loan to fully amortizing at maturity Convert the loan to fully amortizing at maturity The banker now has a reasonable expectation the he will be unable to collect all principal and interest as originally contracted. That is it is probable that he will be unable to collect all principal and interest as originally scheduled. The banker now has a reasonable expectation the he will be unable to collect all principal and interest as originally contracted. That is it is probable that he will be unable to collect all principal and interest as originally scheduled.

22. 22 Impairment Measurement Relationship between Substandard, Impaired, and TDR Loans (Generally). Substandard Loans Impaired Loans Troubled Debt Restructured Loans

23. 23 Impairment Measurement  THE MEASUREMENT APPROACHES PRESENT VALUE OF THE DISCOUNTED CASH FLOWS (ASC Topic 310-10-35– calls for this approach) Shall Use PRESENT VALUE OF THE DISCOUNTED CASH FLOWS (ASC Topic 310-10-35– calls for this approach) Shall Use Observable market value (as a practical expedient – to the DCF because impaired loans tend to be unique this approach is very rarely used)Observable market value (as a practical expedient – to the DCF because impaired loans tend to be unique this approach is very rarely used) THE FAIR VALUE OF THE COLLATERAL (as a practical expedient if the loan is collateral dependent) THE FAIR VALUE OF THE COLLATERAL (as a practical expedient if the loan is collateral dependent) A distinction is made between collateral dependent loans where repayment will come from the operation of the collateral and those loans that will be repaid from the liquidation of the collateralA distinction is made between collateral dependent loans where repayment will come from the operation of the collateral and those loans that will be repaid from the liquidation of the collateral

24. 24 Impairment Measurement  THE PRESENT VALUE OF THE DISCOUNTED CASH FLOWS Based on the expected cash flow (NOT the contractual cash flows) Based on the expected cash flow (NOT the contractual cash flows) The banker/examiner must do something when faced with estimated cash flow’s that are less than contractual amounts. "Do nothing" is not an alternative; without adjustment the balance will amortize too fast or too slow.The banker/examiner must do something when faced with estimated cash flow’s that are less than contractual amounts. "Do nothing" is not an alternative; without adjustment the balance will amortize too fast or too slow. Discounted at the loan’s original effective interest rate Discounted at the loan’s original effective interest rate The original discount rate used to value the loan when it was not impaired is the rate used as the appropriate discount rate in measuring impairment.The original discount rate used to value the loan when it was not impaired is the rate used as the appropriate discount rate in measuring impairment.

25. 25 Impairment Measurement  THE PRESENT VALUE OF THE DISCOUNTED CASH FLOWS If the present value of the expected cash flows are less than the carrying value of the loan then the difference is established as an allowance. If the present value of the expected cash flows are less than the carrying value of the loan then the difference is established as an allowance. If the present value of the expected cash flows are more than the carrying value of the loan then no allowance is established. If the present value of the expected cash flows are more than the carrying value of the loan then no allowance is established.

26. 26 Impairment Measurement  THE OBSERVABLE MARKET VALUE APPROACH It requires a market for the loan, which usually does not exist. In some cases, prices for a loan may be available based on a loan participation market, and recent sales or bids from qualified potential buyers. In addition, market prices can be derived from market activity of loans that are substantially the same. It requires a market for the loan, which usually does not exist. In some cases, prices for a loan may be available based on a loan participation market, and recent sales or bids from qualified potential buyers. In addition, market prices can be derived from market activity of loans that are substantially the same. This is usually very difficult for an impaired commercial or commercial real estate loan. This is usually very difficult for an impaired commercial or commercial real estate loan. This approach is rarely if ever used. This approach is rarely if ever used.

27. 27 Impairment Measurement FAIR VALUE OF THE COLLATERAL APPROACH This approach is used when a loan is collateral dependent: This approach is used when a loan is collateral dependent: W hen a loan is collateral dependent is a judgment that depends on all facts and circumstances.W hen a loan is collateral dependent is a judgment that depends on all facts and circumstances. The definition of collateral dependent dictates that repayment of the loan is expected to be provided solely by the underlying collateral.The definition of collateral dependent dictates that repayment of the loan is expected to be provided solely by the underlying collateral. If the creditor has the ability to look to the general credit of the borrower for repayment, assuming the borrower has substance beyond the underlying collateral, repayment would not be expected solely from the underlying collateral and as such, the loan would not be deemed collateral dependent.If the creditor has the ability to look to the general credit of the borrower for repayment, assuming the borrower has substance beyond the underlying collateral, repayment would not be expected solely from the underlying collateral and as such, the loan would not be deemed collateral dependent.

28. 28 Impairment Measurement FAIR VALUE OF THE COLLATERAL APPROACH Operation of the Collateral This approach is used when a loan is collateral-dependent: This approach is used when a loan is collateral-dependent: Loans that are collateral dependent based on the operation of the collateral should evaluated for ASC Topic 310-10-35 at Fair Value. This may include collateral dependent loans that will be repaid from the operation rather than the sale of the collateral.Loans that are collateral dependent based on the operation of the collateral should evaluated for ASC Topic 310-10-35 at Fair Value. This may include collateral dependent loans that will be repaid from the operation rather than the sale of the collateral. For classification purposes, if the market value conclusion in a recent and well supported appraisal is less than the investment in the loan the difference should be classified as “Loss.” If the FV is lower that amount would be established in an allowance.For classification purposes, if the market value conclusion in a recent and well supported appraisal is less than the investment in the loan the difference should be classified as “Loss.” If the FV is lower that amount would be established in an allowance. Loans categorized as collateral-dependent, but derive the cash flow from collateral operation, should be valued at fair value (no cost to sell is included).Loans categorized as collateral-dependent, but derive the cash flow from collateral operation, should be valued at fair value (no cost to sell is included). The rationale is the sale of the collateral is not the primary source of repayment, rather the cash flows from operations. In this scenario management does not expect to foreclose.The rationale is the sale of the collateral is not the primary source of repayment, rather the cash flows from operations. In this scenario management does not expect to foreclose.

29. 29 Impairment Methodology  Institutions should not layer their loan losses Layering is the practice of recording in the ALLL more than one amount for the same probable loan loss Layering is the practice of recording in the ALLL more than one amount for the same probable loan loss Layering can happen when an institution includes a loan in one segment and then includes the loan in another group, which receives an additional ALLL amount Layering can happen when an institution includes a loan in one segment and then includes the loan in another group, which receives an additional ALLL amount

30. 30 Troubled Debt Restructuring ASC Topic 310-40-15-5 The restructuring of a debt is a TDR if all of the following are met: 1.For economic or legal reasons 2.Related to the borrowers financial difficulties (but for test) 3.The creditor grants a concession that it otherwise would not consider NB: TDRs are often done to alleviate the burden of the debtor’s near term cash requirements SUMMARY

31. 31 Troubled Debt Restructuring When has a concession occurred? The borrower’s condition is such that: 1.He does not have access to funds at a market interest rate for a credit with similar risk. 2.An increase in the interest rate does not mean that no concession has been granted. The rate must match the risk characteristics, given all facts and circumstances. SUMMARY NB: TDRs are often done to alleviate the burden of the debtor’s near term cash requirements

32. 32 Troubled Debt Restructuring When has a concession occurred? (Cont.) The borrower’s condition is such that: that is insignificant 3.A restructuring that results in a delay in payment that is insignificant is not a concession. However, an entity should consider various factors in assessing whether a delay is insignificant. (ASC Topic 310-10-35-17). ASU 2011-02, Basis for Conclusions, Paragraph BC13 states: “The guidance in paragraph ASC 310-10-35-17 about insignificant delays or shortfalls is meant to prevent a loan from being designated as impaired when the resulting impairment calculation would result in a nominal allowance for loan losses.” SUMMARY

33. 33 Troubled Debt Restructuring Is the borrower having financial difficulties? A borrower can be having financial difficulties, even though the borrower is not currently in payment default. The question is whether the borrower will be in default if the restructure doesn’t occur. SUMMARY

34. 34 Troubled Debt Restructuring What is Troubled Debt Restructuring? ALL TDR LOANS ARE IMPAIRED All TDRs should be measurement for impairment under ASC Topic 310-10-35. Methods are 1)DCF (shall use, unless collateral dependent) 2)Observable market value (rare) (only as a practical expedient to the DCF approach) 3) Fair Value of the Collateral (if collateral dependent as a practical expedient – i.e. no outside available and reliable cash flow) Once restructured, homogeneous loans (fall within the scope of 310-40) are also measured under ASC Topic 310-35 for impairment. Groups of impaired loans with similar risk characteristics can be aggregated and measured as a group.

35. 35 Troubled Debt Restructuring ASC 310-40-15-6 & 7 & 8 The concession is granted by the creditor in an attempt to protect as much of its investment as possible. If the debtor can obtain funds at a market interest rate from another creditor then the restructuring is not a troubled debt restructure. 1.Can be an agreement between the creditor and borrower 2.Or can be imposed by law.

36. 36 Troubled Debt Restructuring ASC Topic 310-40-15-9 A TDR may include Transfer of assets from the borrower to the creditor Granting an equity interest in the debtor Modification of the debt Reduction in the interest rate Extension of the maturity date at a rate lower rate than for new debt with similar risks Reduction in the face amount Reduction of accrued interest

37. 37 Troubled Debt Restructuring ASC Topic 310-40-15-11 A TDR may NOT include: Changes in lease agreements Changes in employment agreements Modifications within a loan pool Changes in expected cash flow related to modifications on loans within those pools.

38. 38 Troubled Debt Restructuring ASC Topic 310-40-15-12 A restructured loan may NOT be a TDR even if the borrower is experiencing financial difficulties: Creditor receives full satisfaction of the debt (based on FV) FV of Cash, other assets or an equity interest equal to the debtor’s carrying value. The creditor reduces the effective interest rate on the debt primarily to reflect a decrease in market interest rates in general The debtor issues in exchange for its debt, new marketable debt having an effective interest rate based on its market price that is at or near the current market interest rate for similar debt

39. 39 Troubled Debt Restructuring Has the creditor granted a concession? Yes, when as a result of the restructure: The Creditor does not expect to recover all principal and interest (accrued at the ORIGINAL interest rate). ASC Topic 310-40-15-13 has restructured the debt in exchange for additional collateral (or guarantees) that do not fully compensate the credit for the restructure. ASC Topic 310-40-15- 14 DOES NOT otherwise have access to funds at market rate for debt with similar risk characteristics. ASC Topic 310-40-15-15 An interest rate increase could still be a concession if a credit with similar risk would have a higher rate than the new rate. ASC Topic 310-40-15-15

40. 40 Troubled Debt Restructuring Is the delay in payment insignificant? First, A restructure that results in a insignificant delay is NOT a concession. The amount of restructured payments is insignificant in relation to the total balance. The time delay in payment is insignificant related to 1) frequency, 2) the original contract maturity, or 3) the expected duration ASC Topic 310-40-15-17 Restructures are cumulative, management should consider the previous restructures when determining whether the current restructure is insignificant. ASC Topic 310-40-15-18

41. 41 Troubled Debt Restructuring Is the Borrower experiencing financial difficulties? Some of the concepts the creditor should consider (but there are many more) when determining whether the borrower is experiencing financial difficulties: Is the borrower in default or will he probably be in default in the foreseeable future? The borrower has declared bankruptcy or is in the process of doing so? is there doubt about his going concern status? Have the borrower’s securities been delisted or are under threat of being delisted? the borrower’s cash flows as projected will not fully service all of his debt without the modification the borrower cannot obtain funds from sources other than the existing creditors at an effective interest rate equal to the current market rate for credits with similar risk to a non-troubled borrower. ASC Topic 310-40-15-20

42. 42 Troubled Debt Restructuring ACCOUNTING STANDARDS UPDATE NO. 2011-02 Effective date for public companies - the annual period beginning on or after June 15, 2011 This guidance will apply retrospectively to restructurings that occur during the year of adoption – Early adoption is allowed. Example: There is a impaired loan that was accounted for as an impaired loan on January 1, 2011, but not a TDR. But after considering this guidance, management now believes the impaired loan IS a TDR, they would have to report it in the first interim reporting period occurring (beginning) after June 15, 2011. So the first reporting period would be September 30, 2011. Effective date for non-public companies: The annual period ending after December 15, 2012.

43. 43   When can a TDR be removed from TDR reporting?   Once an obligation has been restructured in a troubled debt restructuring, it continues to be considered a troubled debt restructuring until paid-in-full or otherwise settled, sold, or charged off.   However, if a restructured obligation is in compliance with its modified terms and the restructuring agreement specifies an interest rate that at the time of the restructuring is greater than or equal to the rate that the bank was willing to accept for a new extension of credit with comparable risk, the loan need not continue to be reported as a troubled debt restructuring in calendar years after the year in which the restructuring took place.   A loan extended or renewed at a stated interest rate equal to the current interest rate for new debt with similar risk is not considered a troubled debt restructuring. See, Consolidated Reports of Condition and Income, RC-N definitions (June 2011). Troubled Debt Restructuring

44. 44 A and B Note Structure A formal restructuring may involve a multiple note structure in which a troubled loan is restructured into two notes: “A” note represents portion of original loan principal expected to be fully collected “B” note represents portion of original loan that has been charged off

45. 45 Troubled Debt Restructuring Can Note A be returned to accrual status? Yes, if all of the following conditions are met: Note “A” is rewritten in a prudent manner – such that the restructure has economic substance. Note “B” is Charged-off recorded at time of restructuring Ultimate collectability of all amounts contractually due on Note A is not in doubt, supported by a thorough analysis on the borrowers capacity. The banker must be Reasonably Assured that they will collect all principal and interest going forward. There is a period of satisfactory payment Performance before Note A is returned to accrual status (generally six months) – According to the Call Report glossary the performance period can begin BEFORE the date of the TDR.

46. 46 Troubled Debt Restructuring ASC Topic 310-40-50-2 provides conditions relating to when a loan need not be included in TDR disclosures 50-2 Information about an impaired loan that has been restructured in a troubled debt restructuring involving a modification of terms need not be included in the disclosures required by paragraphs 310- 10-50-15(a) and 310-10-50-15(c) in years after the restructuring if both of the following conditions exist: a.The restructuring agreement specifies an interest rate equal to or greater than the rate that the creditor was willing to accept at the time of the restructuring for a new loan with comparable risk. time of the restructuring b.The loan is not impaired based on the terms specified by the restructuring agreement.

47. 47 Troubled Debt Restructuring THE CALL REPORT TAKE ON NON-REPORTING OF A TDR LOAN When can a TDR be removed from TDR reporting? Once an obligation has been restructured in a troubled debt restructuring, it continues to be considered a troubled debt restructuring until paid-in-full or otherwise settled, sold, or charged off. However, if a restructured obligation is in compliance with its modified terms and the restructuring agreement specifies an interest rate that at the time of the restructuring is greater than or equal to the rate that the bank was willing to accept for a new extension of credit with comparable risk, the loan need not continue to be reported as a troubled debt restructuring in calendar years after the year in which the restructuring took place. A loan extended or renewed at a stated interest rate equal to the current interest rate for new debt with similar risk is not considered a troubled debt restructuring. See, Consolidated Reports of Condition and Income, RC-N definitions (June 2011).

48. 48 Questions? RColeman@fdic.gov 415-808-8147 KFisher@vtdcpa.com 949-544-7243 RColeman@fdic.gov KFisher@vtdcpa.com RColeman@fdic.gov KFisher@vtdcpa.com