Agriculture and Energy Assistance Act of 1986

Agriculture and Energy Assistance Act of 1986 - Amends the Federal Deposit Insurance Act to direct the appropriate Federal banking agency to allow an agricultural or energy bank which engages in troubled debt restructuring involving only modification of the terms of the original debt agreement to account for the effects of the debt restructuring prospectively and to continue to account for the bank's investment in the original debt agreement in the amount recorded by the bank prior to such restructuring (provided the investment is less than or equal to the anticipated cash receipts from restructuring) to the extent such methods of accounting are consistent with generally accepted accounting principles. Directs the appropriate agency to prescribe the manner in which a bank will report any troubled debt restructuring in reports of condition. Authorizes the appropriate agency to limit troubled debt restructuring when necessary to maintain a bank in safe and sound condition.

Requires each appropriate agency to allow the capital of a qualified insured bank to fall below its minimum capital requirement. Permits the agency to limit the extent and duration of the shortfall as necessary to maintain a bank in a safe and sound condition. Defines a bank as "qualified" if it: (1) demonstrates that the capital shortfall is attributable to problems in the agricultural or energy sectors of the economy; (2) demonstrates that it is making good faith efforts to restructure troubled debt; (3) applies before January 1, 1988; (4) submits an acceptable plan for increasing its capital to the minimum required level by January 1, 1993; and (5) meets such additional conditions as the agency may establish.

Requires the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation to report to the Congress annually on their administration of such debt restructuring and capital standard forbearance provisions and on the extent to which banks are utilizing such provisions.

Prohibits a national banking association from holding real estate under mortgage or purchased to secure debt for longer than ten years with no extension (currently, five years with a five-year extension if approved by the Comptroller of the Currency).

Provides that a national banking association which the Comptroller of the Currency allows to decrease its capital below its required minimum capital level shall, nevertheless, be deemed to have unimpaired capital and unimpaired surplus equal to such minimum level for purposes of lending limits.