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Blockchain A type of distributed ledger technology that is the foundational innovation underlying 

the crypto-asset ecosystem. See also Crypto-Assets.

Bond A certificate of indebtedness issued by a government or corporation. 

Call Report A report of a bank’s financial condition that is filed quarterly with the FDIC and known 

officially as the Report of Condition and Income.

Central Bank An institution that oversees and regulates the banking system and quantity of money 

in the economy. The Federal Reserve System is the central bank of the United States. 

Collateral Property required by a lender and offered by a borrower as a guarantee of payment 

on a loan. Also, a borrower’s savings, investments, or the value of the asset purchased 

that can be seized if the borrower fails to repay a debt.

Collateralized Loan 

Obligations (CLOs)

Securitization vehicles backed predominantly by commercial loans. See also 

Warehouse Lending. 

Community Bank FDIC-insured institutions that meet the criteria for community banks that was 

developed for the FDIC Community Banking Study, published in December 2012.  

Thresholds for certain criteria are adjusted upward quarterly and described in 

“Notes to Users” for the FDIC Quarterly Banking Profile.  See, for example: page 35 of 

the FDIC Quarterly Banking Profile, First Quarter 2023. 

Crypto-Assets Private sector digital assets that depend primarily on the use of cryptography and 

distributed ledger or similar technologies. The term encompasses many assets 

commonly referred to as “coins” or “tokens” by market participants. See also 

Stablecoins.

Default Failing to promptly pay interest or principal when due.

Early-Stage Past-Due 

Loans and Leases

Loans and leases 30 to 89 days past due and still accruing interest.

Farm Bank A bank with agricultural production loans plus real estate loans secured by farmland 

equal to or exceeding 25 percent of total loans and leases.

Federal Funds Rate The interest rate at which a depository institution lends funds that are immediately 

available to another depository institution overnight.

Great Recession The protracted economic contraction from December 2007 through June 2009. 

The collapse of the U.S. housing market in 2007 became the most severe financial 

crisis since the Great Depression. The financial crisis, in turn, resulted in the Great 

Recession, the effects of which spread throughout the global economy.

GLOSSARY OF TERMS
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High Yield A term that is generally synonymous with noninvestment grade, which refers to the 

lowest-rated bonds subjected to third-party credit risk assessments by nationally 

recognized statistical ratings organizations. In the United States, noninvestment grade 

bonds are typically rated Ba1 or below by Moody’s or BB+ or below by Standard & 

Poor’s or Fitch.

Investment Grade Generally, the highest-rated bonds subjected to third-party credit risk assessments 

by nationally recognized statistical rating organizations. In the United States, investment-grade bonds are typically rated Baa3 or above by Moody’s or BBB- or above by 

Standard & Poor’s or Fitch.

Long-Term Assets Loans and debt securities with remaining maturities or repricing intervals of more 

than five years.

Negative Equity A situation in which a borrower’s mortgage principal is greater than the value of the 

underlying collateral, often real estate. 

Net Interest Margin The difference between interest and dividends earned on interest-bearing assets and 

interest paid to depositors and other creditors, expressed as a percentage of average 

earning assets. No adjustments are made for interest income that is tax exempt.

Nonbank Firms that are not part of or affiliated with FDIC-insured depository institutions. 

Noncurrent Loans and 

Leases

The sum of loans and leases 90 days or more past due, and loans and leases in 

nonaccrual status. 

OPEC+ An alliance formed in December 2016 of top oil-producing countries including 

members of the Organization of the Petroleum Exporting Countries (OPEC) and ten 

non-OPEC partner countries. 

Problem Banks Institutions with financial, operational, or managerial weaknesses that threaten their 

continued financial viability. Federal regulators assign a composite rating to each 

financial institution based upon an evaluation of financial and operational criteria. 

The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. 

Depending upon the degree of risk and supervisory concern, problem banks are rated 

either "4" or "5." 

Leveraged Loans Numerous definitions of leveraged lending exist throughout the financial services 

industry and commonly contain some combination of the following:

• Proceeds used for buyouts, acquisitions, or capital distributions.

• Transactions in which the borrower’s total debt divided by EBITDA (earnings 

before interest, taxes, depreciation, and amortization) or senior debt divided 

by EBITDA exceeds 4.0X EBITDA or 3.0X EBITDA, respectively, or other defined 

levels appropriate to the industry or sector.

• A borrower recognized in the debt markets as a highly leveraged firm, which is 

characterized by a high debt-to-net-worth ratio.

• Transaction in which the borrower’s post-financial leverage, as measured by its 

leverage ratios (for example, debt-to-assets, debt-to-net-worth, debt-to-cash 

flow, or other similar standards common to particular industries or sectors), 

significantly exceeds industry norms or historical levels.
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Real Gross Domestic 

Product

The total market value of all final goods and services produced in an economy in a 

given year calculated by using a base year’s price for goods and services; nominal GDP 

adjusted for inflation.

Rebooked Loans Bank repurchases of delinquent single-family mortgage loans backing mortgagebacked securities that are recorded on the mortgage banking schedule in bank Call 

Reports.

Short-Term Liquid 

Assets 

Cash and due from accounts, federal funds sold, securities purchased under resale 

agreements, and securities maturing in less than one year. 

Stablecoins A type of crypto-asset designed to maintain a stable value relative to a national 

currency or other reference asset or assets. 

Total Past-Due Loans 

and Leases

Loans and leases 30 to 89, or 90 days or more past due, and loans and leases in 

nonaccrual status.

Treasury Yield The effective interest rate paid by the U.S. government to borrow money for different 

lengths of time. It is the return on investment on the government's debt obligations.

Warehouse Lending

Wholesale Funding

Short-term funding of a mortgage lender based on the collateral of warehouse loans 

(in mortgage lending, loans that are funded and awaiting sale or delivery to an 

investor). This form of interim financing is used until the warehouse loans are sold to a 

permanent investor. 

Warehouse financing is also extended in the arrangement of CLOs and to other 

securitization firms. In this context, warehouse financing is a line of credit the 

CLO manager uses to purchase assets. Upon the CLO’s closing, the CLO repays 

the warehousing lenders using the proceeds from the sale of the notes, and the 

CLO becomes the owner of the assets. The CLO manager uses warehousing to 

manage market risk when the manager purchases assets for the deal’s portfolio; the 

warehouse provider assumes the risk of any mark-to-market losses in the portfolio 

during the warehousing period.

Federal funds purchased and securities sold under agreement to repurchase; 

borrowings from the Federal Home Loan Bank; brokered and listing service, municipal 

and state, and foreign deposits; and other borrowings such as from the Federal 

Reserve’s Payment Protection Program Liquidity Facility.