FDIC Federal Register Citations
From: Jennifer
Turner [mailto:JTurner@peoplesbanknc.com]
Sent: Thursday, October 09, 2008 11:02 AM
To: Comments
Subject: FW: Consolidated Reports of Condition and Income, 3064-0052
We received this newsletter from Banc Investment Group on October 1st. It is
clarifying the definition of the term “loan secured by real estate” and
states the changes would be in effect on the Call Report for March 31, 2009.
I have attached the newsletter. Could you review it and answer a few
questions?
How would you identify the following loan, and what FDIC loan type would
it fall into? Would it be identified as a “loan secured by real estate”?
Would it be CRE and/or be listed as non-conforming LTV?
A customer borrows $700,000 to construct and equip a new dentist office. The
building to be constructed is valued at $346,000 and the equipment and
inventory is valued at $343,000. Neither is 50% or more of the face amount
of the loan.
Loan - $25,000 line of credit
Cross-collateralized Loan completed on the same day - $130,000
Purpose of both loans – working capital line of credit
Collateral - $41,000 of Equip/Inv; 1-4 family residence valued at $136,000
with a mortgage of $103,000 (1st lien) and a home equity of $19,000 (2nd
lien)
How would you define the two loans above on the call report? Would these
loans be non-conforming LTV if they are not identified as loans secured by
real estate?
Also
If we did a working capital loan and took a commercial lot as collateral.
However, the commercial lot is greater than 50% of the face amount of the
loan. Would we categorize the loan as real estate secured and place it under
the FDIC description – “Other Construction/Developed Land/Other Land -
includes all non-residential construction loans, all land development loans,
and all other land loans”? If not, would this loan be CRE? My understanding
is that all CRE loans should have a FDIC loan code that is related to real
estate for the Call Report.
Another example:
If you had a mortgage loan at $71,000 with collateral valued at $75,000 and
then did a home equity loan for $10,000, would the home equity be a “loan
secured by real estate”?
Thanks
Jennifer Turner
Assistant Vice President
Credit Administration
Peoples Bank
Newton, NC
(828) 464-5620 ext. 5309
(828) 466-5035 fax
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