The regulators are continuing on their burden-reducing approach and announced more reductions in November 2018 to the FFIEC 051 forms. The regulators are proposing to increase the small bank eligibility size for filing on the FFIEC 051 form from $1 billion in assets size to $5 billion and to make more line items required only semi-annually. The most significant change to semi-annual reporting will be RCR Pt II lines 1-25, the detail reporting of both on and off balance sheet risk weighting. Total risk-weighted assets, however, will still be required to be reported. Banks with assets of more than $1 billion will be required to report the consumer deposit detail information on balances and service charges in December only; schedule RIC semi-annually; RCO M2 on a quarterly basis. In a second proposal, the regulators are considering regulatory burden relief to qualifying community banking organizations by allowing an option to calculate a simple leverage ratio, rather than multiple measures of capital adequacy.
In September 2018 the regulators issued proposed revisions to the 2019 Call Report to align the information in the call report with the new accounting credit loss accounting standard. The changes include updates to twelve schedules to address the broader scope of financial assets for which an allowance for credit losses must be established and maintained. Under a CECL proposed notice of rulemaking, a bank may elect to phase in the regulatory capital impact of adopting CECL over a three year period.
In June 2018 the regulators implemented further burden-reducing changes for both FFIEC 051 and 041 filers. The changes include consolidation and/or removal of several more line items and reductions in the frequency of reporting for about a dozen line items. The 051 form was originally approved in 2017 and may be used by domestic banks with less than $1 billion in assets. The 051 short form has approximately 25 fewer pages and eliminated 40% of the 041 line items as well as reducing the frequency of data collection in some of the schedules.
Additional changes to the June 2018 Call Report were included in the supplemental instructions. The regulators issued an update to the reporting of high volatility commercial real estate (HVCRE) exposures as well as reciprocal deposits.
In September 2017, the agencies issued proposed simplifications to the risk-based capital rules. The proposal was approved in November 2017 and effective in 2018 and simplifies the threshold deduction treatment for mortgage servicing assets, deferred taxes arising from temporary differences that can’t be realized through carrybacks, and investments in the capital of unconsolidated financial institutions.
The Call Report Preparation seminar will help preparers and reviewers understand the preparation process and eliminate errors. The seminar will begin with an overview of proposed and approved revisions for 2019 & 2018 and other recent changes, followed by a review of several new accounting standard updates.
The classification priority for coding loans on RC-C will also be covered. Loans are normally a bank’s largest asset category and the reporting rules for RCC are critical because they affect all loan schedules in the call report. Loans are reported based on borrower, purpose, or collateral, but there are specific rules that dictate when to use each of the classification factors.
The seminar will end with a discussion of commonly cited errors made in call report preparation.
Schedules included in the presentation are the FFIEC 041 & 051 forms.
THE SEMINAR WILL COVER:
- Proposed and approved changes to the 2019 and 2018 Call Reports as well as other recent revisions
- Recent Accounting Guidance (equities, leases, other real estate)
- In-Depth Discussion of Loan Classification reporting rules
- Common Errors made in call report preparation
Annual training in Call Report Preparation is highly recommended by bank regulators, not just for preparers of the call report, but also for reviewers. A reviewer needs to understand the reporting requirements and should spend at least 3-4 hours performing a detailed check of the completed Call Report Schedules and supporting documentation. New and experienced preparers and reviewers should be trained.
Participants receive a 300+ page manual, which will include materials covered during the seminar as well as additional information on other call report schedules.
WHO SHOULD ATTEND?
Call Report preparation requires knowledge of bank accounting, bank regulations, and virtually all bank operations. Banks should train a preparer and reviewer. Anyone responsible for preparing, auditing, or signing the call report will find the program valuable. The seminar is designed for more experienced preparers and reviewers interested in newer reporting requirements. Annual training is highly recommended by bank regulators.
Ann Leavelle Thomas, Thomas Consulting
Ann has over 30 years of experience in bank accounting and control. With Thomas Consulting, she prepares bank plans, monthly financial reports, performs regulatory compliance audits and training and internal control audits for client banks.
WHAT TO BRING:
Please bring a copy of your general ledger and your latest call report. Bankers find it useful to review classifications during the class as the line items are discussed.
The registration fee of $245 includes workshop materials, lunch and refreshment breaks for the on-sight workshop.