On Friday, September 11, 2020, the Securities and Exchange Commission (SEC or Commission) adopted updated rules to expand statistical disclosures on financial institutions registrants. The SEC believes that the changes will result in better disclosures for investors and will hopefully provide efficiencies pertaining to compliance by SEC registrants. The release further references the fact that these changes are a result of new accounting standards and changes to the sector over the past few decades. The rules will be part of a new subpart 1400 for Regulation S-K and will replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies. The following items were highlighted in the SEC’s release as required disclosures:
- Distribution of assets, liabilities and stockholders’ equity, the related interest income and expense, and interest rates and interest differential.
- Weighted average yield of investments in debt securities by maturity.
- Maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates.
- Certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented.
- The allowance for credit losses by loan category.
- Bank deposits including average amounts and rate paid and amounts that are uninsured.
The disclosures will be required for each annual period presented, as well as within any interim period if a material change in information/trend occurs.
The effective date of the changes will be 30 days subsequent to publication in the Federal Register. The changes are applicable for fiscal years ending on or after December 15, 2021. Voluntary compliance is permitted. Lastly, Guide 3 will be rescinded on January 1, 2023.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.