Sunday, October 22, 2017

New Community Bank Call Report

Posted by Jim March 17, 2017 6:15pm

Photo Credit: iodrakon

By: James Cole, Financial Senior Audit Manager

The FFIEC is implementing a new Call Report (FFIEC 051) for small banks with total assets under $1 billion and without foreign branches. This definition includes most “community banks”. The new report is scheduled for implementation with call reports beginning with the March 31, 2017 reporting date. Small banks, however, have the option to delay implementation and continue to submit the current (FFIEC 041) report until March 31, 2018.  If you fit the “small bank” definition, you must convert to the 051 form by March 31, 2018. However, having the option to delay for 2017 might be useful to those institutions that expect to be over $1 billion shortly. If a bank will only have to submit the 041 form again anyway, it may make little sense to convert forms twice. Delayed implementation might also be useful for banks whose internal or external call report mapping software requires updating to match the new 051 report requirements. The delay will allow more time for the updates to be made by banks or their software vendors.

The new 051 report generally eliminates schedules and line items that community banks did not complete anyway, as outlined in my earlier blog on the “Call Report Simplification”, published November 20, 2015, so it may not really save much time or effort. The changed report can be seen at:

http://www.ffiec.gov/forms051.htm

This link to the FFIEC website will allow you to review the FIL, a list of changes, and both the new report (FFIEC 051) and a red-lined version of the current (FFIEC 041) report, which was used to create the new report. We suggest you look closely at the red-lined FFIEC 041. This version is very helpful in understanding the changes, as it shows exactly what lines and schedules are being adjusted. This version also shows changes to the FFIEC 041 for March 2017 reporting in blue. Changes that create FFIEC 051 are in red. Your careful review of the red-lined version will help you decide which report you wish to use.  It is probably worthwhile to begin your detailed review now so that you know exactly what you can expect when you begin completing your call report in April.

A detailed list of changes can also be found at the above link to the FFIEC website. The significant changes include:

  • Deposit breakouts on RC-E and other lines are changed to finally reflect current deposit insurance limits of $250,000, except for IRAs (the same change is also being made to FFIEC 041).
  • Some supporting detail and some memo items on RC-C, RC-N, RC-F and RC-G are only required in the June and December reports. You will still have to collect this information, but not as often. If you have mapping software, it must still be able to address these items for the two quarters when it is reported.
  • Elimination of RI-C, which disaggregates ALLL data
  • Elimination of RC-D, which reports trading assets and liabilities
  • Elimination of RC-L, which covers derivatives and off balance sheet items
  • Elimination of RC-P, which reports on mortgage banking activity
  • Elimination of RC-Q, which reports on assets or liabilities reported under the “fair value option”
  • Elimination of RC- S, which reports on servicing activity
  • Elimination of RC-V, which reports on “variable interest” entities
  • Addition of Schedule SU (supplementary information) which asks for much of the information that would have been reported by community banks on the eliminated schedules listed above, along with some credit card and FDIC loss-sharing information

The FIL-1-2017 also notes that additional simplifications are being planned for FFIEC 041 and FFIEC 051 for March 31, 2018 implementation. We shall have to wait to see if there is any significant relief in those additional changes.

 

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James Cole

Financial Senior Audit Manager

Jim Cole, Financial Risk Senior Audit Manager, has a diverse and comprehensive background covering many different aspects of the financial area, such as budgeting and strategic planning, asset liability management, profitability and liquidity analysis, financial systems and processes, public offerings, risk management, accounting and financial reporting, investment performance monitoring and financial hedging.



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