### Question
What does nonperforming loan percentage mean?


### Answer
**Nonperforming loan percentage** has the following meaning in *26 U.S.C. § 585*:

> the percentage determined by dividing—



(I) the sum of the outstanding balances of nonperforming loans of the bank as of the close of each quarter of the taxable year, by



(II) the sum of the amounts of equity of the bank as of the close of each such quarter

#### Citation:
  - *26 U.S.C. § 585*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter H-Banking Institutions > PART I-RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS**

