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Federal R eserve Bank
OF DALLAS
ROBERT

D. M C T E E R , J R .

PRESIDENT
AND CHIEF EX ECUTIVE O F F IC E R

December 20, 1994

DALLAS, TE X A S
7 5 2 6 5 -5 9 0 6

Notice 94-123

TO:

The Chief Executive Officer of each
member bank and others concerned in
the Eleventh Federal Reserve District

SUBJECT
Report on Indebtedness of Executive Officers and
Principal Shareholders and Their Related Interests to
Correspondent Banks (Form FFIEC 004)
DETAILS
Executive officers and principal shareholders subject to the reporting
requirements set forth under Regulation O (Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks) must file annual reports concerning their
indebtedness, and the indebtedness of their related interests, to the correspondent banks
of the member bank. These reports should be filed with the member bank’s board of
directors by January 31 of each year. The 1994 report covers the period January 1
through December 31, 1994.
The enclosed Form FFIEC 004 has been approved by the Federal Financial
Institutions Examination Council (FFIEC) to assist your bank and your bank’s executive
officers and principal shareholders in complying with the reporting requirements. Please
duplicate the form in accordance with your needs. The required information may be
provided on other similar forms.
Each member bank should notify its executive officers and principal share­
holders of the reporting requirements. The persons notified should include any person
who was an executive officer or principal shareholder of the member bank during the
period January 1 to December 31, 1994. Each member bank is also required to make
available to its executive officers and principal shareholders a list of the member bank’s
correspondent banks. A "correspondent bank" is defined as a bank that maintains one or
more correspondent accounts for a member bank during the calendar year, the total of
which exceeds certain amounts specified in Regulation O.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston
Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Form FFIEC 004, or any similar form that is filed by executive officers and
principal shareholders, must be kept on file at the member bank for a period of three
years. These reports are not required to be made available to the public; however, the
reports will be reviewed by examiners during the course of an examination of the
member bank. The reports filed by executive officers and principal shareholders are not
required to be filed with the Reserve Bank or Deputy Comptroller.
ENCLOSURE
A copy of Form FFIEC 004 is enclosed.
MORE INFORMATION
Questions concerning Regulation O should be directed to Jane Anne
Schmoker at (214) 922-5101. For additional copies of this Bank’s notice, please contact
the Public Affairs Department at (214) 922-5254.
Sincerely yours,

General In s tru c t^ ^
1. Persons Required to File Report
A Report on Indebtedness to Correspondent Banks (Form FFIEC 004),
or a similar form containing identical information, must be completed by
each executive officer and each principal shareholder of an insured bank
who was indebted, or whose related interests were indebted, during the
calendar year for which the report is being submitted to a correspon­
dent bank of their bank. All insured banks are required by law to make
available to their executive officers and principal shareholders a list of
the bank’s correspondent banks. “Correspondent bank” means gener­
ally a bank that maintains a correspondent account in excess of a cer­
tain amount for the officer’s or shareholder’s bank.
The executive officer or principal shareholder must file a separate re­
port concerning the indebtedness of the officer or shareholder to each
correspondent bank and a separate report concerning the indebtedness
of each of the related interests of the officer or shareholder to each cor­
respondent bank. For example, if an executive officer is indebted to two
correspondent banks, the officer must file two reports, one for each cor­
respondent bank. If the executive officer has two related interests that
were also both indebted to two correspondent banks, the officer would
file six reports, two for the officer’s own indebtedness and four for the
indebtedness of the officer’s related interests. If the executive officer is
not indebted to a correspondent bank, but a related interest of the offi­
cer is indebted to a correspondent bank, the executive officer must file
a report concerning the indebtedness of the officer’s related interest to
the correspondent bank.
2. Where and When Reports are to be Filed
The executive officer or principal shareholder must submit the report on
indebtedness to correspondent banks to the board of directors of the
reporting person’s bank for each calendar year by January 31 of the next
year.
3. What Must be Reported
The reporting person must include in each report on indebtedness to
each correspondent bank: (a) the maximum amount of indebtedness out­
standing during the calendar year, and (b) the terms and conditions of
each extension of credit included in the maximum amount reported. The
terms and conditions to be reported are: (1) the original amount and date;
(2) the maturity date; (3) the payment terms; (4) the range of interest rates
charged during the calendar year; (5) whether the extension of credit
is secured or unsecured; (6) if secured, a description of the collateral
and its value; and (7) any unusual terms or conditions.

In determining the maximum amount of indebtedness of a principal share­
holder, the indebtedness of a member of the shareholder’s immediate
family is to be treated as indebtedness of the principal shareholder. Each
maximum amount of indebtedness reported may include several sepa­
rate extensions of credit. The reporting person must report separately
the terms and conditions of each of these extensions of credit.

“Immediate family” means the spouse of an individual, the individual’s
minor children, and any of the individual’s children (including adults)
residing in the individual’s home. For reporting purposes, only one
individual in the immediate family must file reports if that individual’s
reports include the information on indebtedness of the individual’s
immediate family.

Each report on indebtedness to each correspondent bank must also
include the amount of indebtedness outstanding to the correspondent
bank ten business days before the date on which the report on indebt­
edness is filed. If the information on the amount of indebtedness out­
standing to a correspondent bank ten business days before the filing of
the report is not available or cannot be readily ascertained by the filing
date, an estimate of the amount of such indebtedness may be filed,
provided that the actual amount of such indebtedness is submitted to
the bank’s board of directors within the next thirty days.

c. Control of a company is defined in section 215.2(b) of Regulation O
as generally ownership or control of 25 percent or more of a com­
pany’s outstanding voting shares; however, the regulation presumes
control in some cases where less than 25 percent ownership or con­
trol exists.

d. “Related interest” means (1) a company that is controlled by a per­
son or (2) a political or campaign committee that is controlled by a
person or the funds or services of which will benefit a person.

4. Definitions
The following definitions are intended to provide general guidance in com­
pleting this report. For precise definitions, see the Federal Reserve
Board’s Regulation O (12 CFR Part 215) and Part 349 of the FDIC’s Rules
and Regulations (12 CFR Part 349).
a. “Executive officer” is defined in section 215.2 of Regulation O and
means generally an individual who participates or who has authority
to participate (other than in the capacity of a director) in major
policymaking functions of the bank. Certain categories of bank officers
(e.g., vice presidents) are presumed in Regulation O to be executive
officers unless they are excluded by resolution of the board of direc­
tors of the bank or by its bylaws from participation in major policymak­
ing functions of the bank and do not participate therein.
b. “Principal Shareholder” means any individual or company (other than
an insured bank or a foreign bank) that, directly or indirectly, owns,
controls, or has the power to vote more than 10 percent of any class
of voting securities of the bank. The term includes a person that con­
trols a principal shareholder (e.g., a person that controls a bank holding
company).

For the purpose of determining who is a principal shareholder, shares
owned or controlled by a member of the individual’s immediate family
are presumed to be controlled by the individual.

e. “Indebtedness” includes any extension of credit (as defined in sec­
tion 215.3 of Regulation O), but does not include:

i. commercial paper, bonds and debentures issued in the ordinary
course of business; and
ii. indebtedness in an aggregate amount of $5,000 or less from each
correspondent bank, provided the credit is incurred under terms
that are not more favorable than those offered the general public.

“Maximum amount of indebtedness” means, at the option of the report­
ing person, either (i) the highest outstanding indebtedness during the
calendar year for which the report is made, or (ii) the highest end
of the month indebtedness outstanding during the calendar year for
which the report is made. The method chosen should be consistently
used for all indebtedness to the same correspondent bank. The report­
ing person must indicate on the report whether the maximum amount
was determined as of the end of the month or on a daily basis.

g. “Correspondent bank,” “company,” and other terms pertinent to this
report are defined in the Board’s Regulation 0 , 12 CFR Part 215 and
Part 349 of the Federal Deposit Insurance Corporation's Rules and
Regulations, 12 CFR Part 349.

Board of G o v e rn o lW P ih e Federal Reserve System
Office of the Comptroller of the Currency
Federal Deposit Insurance Corporation
N am e of Executive Officer or Principal Shareholder Submitting Report

Report on Indebtedness of Executive Officers and
Principal Shareholders and their Related Interests
to Correspondent Banks

N am e of Bank to which Report is Submitted

State

City

For the Calendar Year Ending December 31, 19_____

Status of Reporting Person:

A. Maximum amount of indebtedness outstanding during the calendar year:

_____ Executive Officer
_ _

Principal Shareholder

Form FFIEC 1
Approved by the Federal Financial Institutions
Examination Council 11/15/79
O M B No. 7100-0034 (FRB)
Expires 9/30/95
1557-0070 (OCC)
Expires 9/30/95
3064-0023 (FDIC)
Expires 9/30/95

To be submitted by executive officers and principal shareholders of insured banks to the boards
of directors of their banks in satisfaction of the reporting requirements of the Federal Reserve Board's
Regulation O (12 C .F.R. Part 215) and Part 349 of the Federal Deposit Insurance Corporation’s
Rules and Regulations (12 C.F.R. Part 349) with respect to indebtedness to correspondent banks.

D. Terms and Conditions of each extension of credit included as indebted­
ness in the amount reported in Box A (see Instruction 3). Use additional
pages if indebtedness consists of more than three loans and/or more space
is needed to report terms and conditions:

(In thousands of dollars) $_
Loan 1:

If the report is submitted for indebtedness of a related interest, name and
address of related interest for which the report is submitted:

B. Method used to determine maximum amount of indebtedness outstand­
ing (check one):
_____ i. highest outstanding indebtedness during the calendar year
highest end of the month indebtedness outstanding during the
calendar year

Name and address of the correspondent bank to which the executive officer,
principal shareholder, or related interest is indebted:

Loan 2:

C. Amount of indebtedness outstanding ten business days prior to the date
of filing this report:
Loan 3:

(In thousands of dollars) $_
I hereby certify that the information given above is complete, correct, and
true to the best of my knowledge.

Signature of official responsible for report

Date Signed

Disclosure of Estimated Burden
The burden associated with this information collection is estimated to vary from 1 to 2 hours per
response, depending on individual circumstances. Burden estimates include the time for reviewing
instructions, gathering and maintaining data in the required form, and completing the information
collection, but exclude the time for compiling and maintaining business records in the normal course
of a respondent's activities. Comments concerning the accuracy of this burden estimate and
suggestions for reducing this burden should be directed to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429