 Ask
Dr. Econ
November 2004
How does the Federal Reserve define "loans and leases," and
how do they relate to "commercial and industrial loans"?
Commercial and industrial loans are a major component of the "loans
and leases" category of assets that commercial banks report on
their balance sheets. Interest and fees that banks earn on loans and
leases also are a major source of the revenues they report on their income
statements. Besides commercial and industrial loans, or “business
loans” as they are often called, other key categories of loans
reported by banks and savings institutions include loans secured by real
estate, loans to finance agricultural production, and loans to individuals—including
credit card loans.
Detailed balance sheet and income statement data are
reported quarterly by each depository institution to their respective
banking industry regulators—the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve System
(FED), the Office of the Comptroller of the Currency (OCC), the Office
of Thrift Supervision (OTS), and state financial institution regulators.
These data are used by regulators and industry analysts to monitor the
performance and condition of banks and the banking industry and by economists
to assess the supply of and demand for credit in the economy.
How are “loans and leases” defined?
The Federal Financial
Institutions Examination Council (FFIEC) quarterly Reports
of Condition and Income (commonly called the “Call Report”)
have detailed instructions that describe what types of loans banks
are required to report in each loan category. For detailed information
on the definitions of any particular asset (including loans and leases),
liability (including deposits), income, or expense item, you may review
the instructions for these reports via the FFIEC or the FDIC web
sites.
Information and instructions
for the June 2004 Report of Condition and Income and its various schedules
are available
at the FDIC web site. For specific information on loans and leases,
click on Schedule
RC-C: Loans and Leases.
What
types of loans and leases do banks make?
Loans and leases represent the
largest single asset category on the banking industry balance sheet.
On the September 2004 Call Report for All Commercial
Banks in the U.S., the industry reported $4.8 trillion in total loans
and leases; that figure represented about 58 percent of commercial
bank assets. Securities, mainly government bonds and mortgage-backed
securities,
accounted for another 18 percent of total bank assets.
Of that $4.8 trillion
in total loans and leases held by all commercial banks, the single largest
loan category, measured as a percentage of
total loans, is loans secured by real estate. The next largest category
consists of commercial and industrial or “business” loans.
Lease financing receivables, one of the smaller loan categories, totaled
$138 million, or 2.9 percent of total loans and leases. Chart 1 below
indicates the share (as of September 2004) that several different types
of loans comprise of total loans and leases outstanding at banks in the
nation. For additional detail, Table 1 below indicates the total amount,
in billions of dollars, for major loan categories including loans secured
by real estate, commercial and industrial loans, loans to consumers,
and other loans.
Chart 1
Table 1
Composition of Total Loans and Leases at All Commercial
Banks in the Nation as of September 2004 (Billions of Dollars)
Want to know what type of loans your bank makes?
Individual bank Call Report data
are available from the FDIC under Call
Report and TFR Data. In addition, quarterly aggregate income statement
and balance sheet data, including loans and leases, are available by state,
as well as for the nation.
These aggregate
figures are tabulated from individual bank Call Reports; they are available
online at the FDIC web site under Statistics
on Banking.
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