Call Report Review and Update Seminar
In 2017, the Agencies approved a new 051 form for domestic banks with less than $1 billion in assets which reduces the number of pages in the call report from 85 to 60 and eliminated 40% of the existing line items. The frequency of data collection was also reduced for some of the schedules. Further burden reducing changes were proposed in June, 2017 for the March, 2018 Call Report and in November, 2017 for the June, 2018 Call Report, for both FFIEC 051 and 041 filers. The new proposal includes consolidation and/or removal of several more line items and reductions in the frequency of reporting for about a dozen line items. The proposed revisions also include instructional changes to the reporting of past due loans.
In September, 2017, the agencies issued proposed simplifications to the risk based capital rules. The rules proposed to replace the complex definition of high volatility commercial real estate exposure with a more straightforward definition. Other proposed capital changes to simplify 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 were approved in November, 2017 and will be effective in 2018.
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 March, 2018 revisions and other recent changes, followed by a line by line review of RC-R, risk based capital.
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.
Proposed Simplifications to the Capital Rules
- Replacement of the complex definition of high volatility commercial real estate (HVCRE) exposures with a more straightforward definition for higher-risk acquisition, development, or construction (ADC) loans, high volatility acquisition, development, or construction (HVADC)
- Simplification of the threshold deduction treatment for mortgage servicing assets (MSAs), deferred tax assets (DTAs) arising from timing differences not realizable through carryback, and investments in the capital of unconsolidated financial institutions — Approved 11/21/17
March and June, 2018 Proposed Revisions
Further burden reducing changes for the FFIEC 051 and 041 forms
- reduction and consolidation of line items
- change in the frequency of data collection for some schedules
- instructional changes to reporting of past due loans (March, 2018)
- maintaining phase in percentage deduction and risk weighting on certain RCR items (March, 2018)
Risk Based Capital Basel III
- Review of the RC-R schedule, focusing on the more critical line items
- Capital Conservation Buffer line items – limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a specified amount of common equity tier 1 capital in addition to the amount necessary to meet its minimum risk-based capital requirements
THE SEMINAR WILL COVER
- Proposed changes to March and June, 2018 and other recent revisions
- Review of RC-R under Basel III, including the proposed simplifications to the capital rules
- 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 250+ page manual, which will include materials covered during the seminar as well as additional information on other call report schedules.
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.
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.