A subordinated note or debenture is a form of debt issued by a
bank or a consolidated subsidiary. When issued by a bank, a subordinated note or debenture is not insured by a federal agency, is subordinated to the claims of depositors, and has an original weighted average maturity of five years or more. Such debt shall be issued by a bank with the approval of, or under the rules and regulations of, the appropriate federal bank supervisory agency and is to be reported in Schedule RC, item 19, “Subordinated notes and debentures.”
When issued by a subsidiary, a note or debenture may or may not be explicitly subordinated to the deposits of the parent bank and is to be reported in Schedule RC, item 16, “Other borrowed money,” or item 19, “Subordinated notes and debentures,” as appropriate.
Those subordinated notes and debentures that are to be reported in Schedule RC, item 19, include mandatory convertible debt.