The Small Business Lending Fund

Quarterly Supplemental Reports ExplainedAugust 2012
About This WebinarThis webinar is provided by Promontory Interfinancial Network for the U.S. Depart

Treasury (Treasury) at Treasury’s request.

Any written communications regarding the Small Business Lending Fund (SBLF) sho

addressed to SBLFInstitutions@treasury.gov. Please do not disclose any institution 

information to Promontory.

The information presented is subject to change or correction. All SBLF investments 

the terms and conditions of the definitive agreements entered into by Treasury and 

respective institution.
AgendaSECTION 1: Overview

SECTION 2: Review of Information Required to

Complete Supplemental Reports

SECTION 3: Submission of Quarterly

Supplemental Reports

SECTION 4: Q&A
SECTION 1: Overview
OverviewThe Small Business Lending Fund:

• Encourages lending to small businesses by providing capital to community banks and community 

loan funds (CDLFs) with less than $10 billion in assets

• Invested over $4.0 billion in 332 institutions including investments of $3.9 billion in 281 commun

$104 million in 51 CDLFs

• As of March 31, 2012, SBLF participants have increased their small business lending by $5.2 billio

billion baseline, and by $433 million over the prior quarter

How is small business lending defined for purposes of the Small Business Lending Fund?

The Small Business Lending Fund uses a definition of small business lending that differs from “loans to

small businesses” and “loans to small farms” as those terms are used in the quarterly Call Reports that banks submit.

Generally, business loans of up to $10 million to companies with up to $50 million in annual revenue will be included i

definition of small business lending. For many community banks, this definition will capture most of the business loan

detailed information, please see the section titled “What Counts as ‘Qualified Small Business Lending’” in Chapter Thre

comprehensive Getting Started Guide for Community Banks.
SECTION 2: Review of Information Required to

Complete Supplemental Reports
Supplemental Reports OverviewQuarterly Supplemental Report

• For each quarter, prior to filling out the Quarterly Supplemental

Report please download the most recent version from

www.treasury.gov/sblf

• The report, which is subject to change, will be used throughout

the duration of your institution’s participation in the program

• In the first nine quarters following your institution’s receipt of

SBLF funding, your report will be used to calculate the

applicable dividend or interest rate for each quarter

• The calculation is based on

– Quarter‐end qualified small business lending

– Quarter‐end adjusted baseline (cumulative

adjustments made for gains resulting from mergers,

acquisitions, and loan purchases or participations)
What information is required to complete a Quarterly Suppleme

Report?

• To complete a Quarterly Supplemental Report, you will need information from your institution’s p

supplemental reports, quarter‐end call reports, and quarter‐end lending data. In total, there are 

complete on each Quarterly Supplemental Report, including:

 3 lines from previous supplemental reports

 8 lines from quarter‐end call reports

 12 lines from quarter‐end lending data

 4 lines from quarter‐end lending data related to mergers and purchases of loans

 12 lines that are auto‐calculated

 6 lines that are manually calculated

• If you revise a Quarterly Supplemental Report, please make sure to carry forward any revisions th

subsequent Quarterly Supplemental Reports.
Quarter‐End Adjusted Baseline Calculation – Lines 1 and 2

• The first calculation on the Quarterly Supplemental Report adjusts your institution’s Initial Adjust

Qualified Small Business Lending increased due to any mergers or acquisitions since filing the mo

supplemental report

• Lines 1 and 2 are from your institution’s previous supplemental reports and should match the co

balances reported on the previous supplemental reports
Quarter‐End Adjusted Baseline Calculation – Lines 3‐7

• Lines 3 ‐ 6 are from your institution’s quarter‐end lending data related to mergers and purchases 

• Line 7 is auto‐calculated

How would purchases of loans and loan participationsfollowing receipt of SBLF funding affect my bank’s

Baseline and quarterly Qualified Small Business Lending calculations?

A bank must increase its Baseline by the amount of the purchase of any loan or loan participation that is included

in its quarterly calculation of Qualified Small Business Lending.

Example: A bank’s Baseline figure is $10 million and its quarterly Qualified Small Business Lending has not increased.

The bank purchases $2 million in loan participations without any other change in its lending.

The bank’s quarter‐end Qualified Small Business Lending is $12 million, reflecting its call report data. Its Baseline figu

the value of the participation purchase and, therefore, also equals $12 million.

The bank would report a 5% dividend rate for this quarter, because there has been no increase in Qualified Small Busi

relative to its Baseline.
Quarter‐End Adjusted Baseline Calculation – Line 8

• Line 8 is from your institution’s quarter‐end lending data related to the exclusions required by th

Jobs Act

How are groups of loans to a single borrower aggregated for the purposes of the $10 million threshold?

The first loan or group of loans, if lessthan $10 million in the aggregate, will be included in Qualified Small Business Lending

However, any loan that would cause the aggregate amount to exceed $10 million to a single borrower will be excluded.
Quarter‐End Adjusted Baseline Calculation – Line 9

• Line 9 is from your institution’s quarter‐end lending data

Auto‐calculated

At what point should a borrower’s revenue be measured with respect to the $50 million revenue limitation?

For the purpose of determining whether a loan may be included in Qualified Small Business Lending, a borrower’s rev

must be measured for the most recent fiscal year ended on the date of origination. The date of origination is the date 

which credit was initially extended or, if applicable, most recently renewed.
Quarter‐End Adjusted Baseline Calculation – Lines 10‐13

• Lines 10 and 11 are from your institution’s quarter‐end lending data

• Lines 12 and 13 are automatically calculated

Are Small Business Administration (SBA) guaranteed loans included in the calculation of Qualified Small Business Le

The non‐guaranteed portion of any SBA loan, including 504 and 7(a) loans, isincluded in Qualified Small Business Lending if 

loan meetsthe definition of Qualified Small Business Lending. Any guaranteed portion of an SBA loan, however, is excluded 

calculation of the Baseline and Qualified Small Business Lending.
Quarter‐End Qualified Small Business Lending Calculation – Li

• This section calculates your institution’s Qualified Small Business Lending as of the date of its con

end call report.

• Lines 14 – 17 are from your institution’s consolidated quarter‐end call reports and should match 

balances reported on those reports. Treasury will verify that the balances listed in lines 14‐17 ma

balances.

• Line 18 is automatically calculated.

If my bank co‐originates a loan with another bank, is that loan included in Qualified Small Business Lending?

For co‐originated loans (e.g., loans made using separate credit instruments that share a common agent) that meet the

definition of Qualified Small Business Lending, each bank may include the portion of the loan it holds in its Qualified

Small Business Lending.
Quarter‐End Qualified Small Business Lending Calculation – 

• Line 19 is from your institution’s quarter‐end lending data

How are groups of loans to a single borrower aggregated for the purposes of the $10 million threshold?

The first loan or group of loans, if lessthan $10 million in the aggregate, will be included in Qualified Small Business Lending

However, any loan that would cause the aggregate amount to exceed $10 million to a single borrower will be excluded.
Quarter‐End Qualified Small Business Lending Calculation – 

• Line 20 is from your institution’s quarter‐end lending data

Auto‐calculated

At what point should a borrower’s revenue be measured with respect to the $50 million revenue limitation?

For the purpose of determining whether a loan may be included in Qualified Small Business Lending, a borrower’s rev

must be measured for the most recent fiscal year ended on the date of origination. The date of origination is the date 

which credit was initially extended or, if applicable, most recently renewed.
Quarter‐End Qualified Small Business Lending Calculation – Li

• Lines 21 and 22 are from your institution’s quarter‐end lending data

• Line 23 is automatically calculated

Are Small Business Administration (SBA) guaranteed loans included in the calculation of Qualified Small Business Le

The non‐guaranteed portion of any SBA loan, including 504 and 7(a) loans, isincluded in Qualified Small Business Lending if 

loan meetsthe definition of Qualified Small Business Lending. Any guaranteed portion of an SBA loan, however, is excluded 

the calculation of the Baseline and Qualified Small Business Lending.
Net Charge‐Off Adjustments – Lines 24‐29

• This section adjusts for your institution’s quarter‐end net charge‐offs. If net charge‐offs are nega

exceed charge‐offs), you will type a minus symbol (‐) in the “Neg” column that corresponds to th

offs must be quarterly figures and not year‐to‐date

• Line 24 is from your institution’s previous supplemental reports

• Lines 25 – 28 are from your institution’s quarter‐end call reports

• Line 29 is automatically calculated
Net Charge‐Off Adjustments – Line 30

• Line 30 is from your institution’s quarter‐end lending data

How are groups of loans to a single borrower aggregated for the purposes of the $10 million threshold?

The first loan or group of loans, if lessthan $10 million in the aggregate, will be included in Qualified Small Business Lending

However, any loan that would cause the aggregate amount to exceed $10 million to a single borrower will be excluded.
At what point should a borrower’s revenue be measured with respect to the $50 million revenue limitation?

For the purpose of determining whether a loan may be included in Qualified Small Business Lending, a borrower’s rev

must be measured for the most recent fiscal year ended on the date of origination. The date of origination is the date 

which credit was initially extended or, if applicable, most recently renewed.

Net Charge‐Off Adjustments – Line 31

• Line 31 is from your institution’s quarter‐end lending data
Net Charge‐Off Adjustments – Lines 32‐35

• Lines 32 and 33 are from your institution’s quarter‐end lending data

• Lines 34 and 35 are automatically calculated

Are Small Business Administration (SBA) guaranteed loans included in the calculation of Qualified Small Business Le

The non‐guaranteed portion of any SBA loan, including 504 and 7(a) loans, isincluded in Qualified Small Business Lending if 

loan meetsthe definition of Qualified Small Business Lending. Any guaranteed portion of an SBA loan, however, is excluded 

the calculation of the Baseline and Qualified Small Business Lending.
Dividend or Interest Rate Calculation – Lines 36‐40

• To calculate the dividend or interest rate that will be applied to the SBLF funding for the following 

section compares your institution’s Quarter‐End Qualified Small Business Lending to its Quarter‐E

Baseline

• Line 36 is a manually entered field

• Lines 37 – 40 are automatically populated or calculated
Dividend or Interest Rate Calculation – Lines 41‐45

• Lines 41‐45 are manually calculated
SECTION 3: Submission of Quarterly Suppleme

Reports
Submission of Quarterly Supplemental ReportsAppropriate signatures are needed for completing the supplemental reports.

• If the CEO and CFO are the same person, you must get the second signature from another officer 

association, or holding company

• The Quarterly Supplemental Report is due at the same time as your institution’s quarterly call rep

calendar days after the quarter to which it pertains.

• Each bank must file its Quarterly Supplemental Report by electronically entering the requested d

report and emailing the completed copies, along with the cover (signature) pages, to Treasury at SBLFS

• For banks using digital signatures, the completed electronic reports are submitted as standalone 

using handwritten signatures, both the completed electronic reports and a scanned copy of the c

must be submitted.

• In addition to Treasury, reports should also be submitted to the following:

– Banks and Savings Associations: one additional copy should be sent to the bank’s primary fe

state‐regulator if state‐chartered

– Bank Holding Companies and Savings & Loan Holding Companies: one additional copy shou

appropriate Federal Reserve Bank

Required Signatures Banks and Savings Associations Holding Companies

CEO (or equivalent)  

CFO (or equivalent)  

At least two Directors (Trustees) 
Description of Inaccuracies in Quarterly Supplemental 

• You must provide Treasury with a written description of any inaccuracies in any Quarterly Supple

within three business days of discovery

• Since previous Supplemental Report balances come directly from prior reports, when a prior repo

all subsequent reports covering a time period after may need to be resubmitted.
SECTION 4: Q&A
Questions?