Bank Accounting Issues

SEC Rules

S-X Article 9
Financial Statements

Rule 9-01 Application of Article 9
Rule 9-02 General Requirement
Rule 9-03 Balance Sheets
Rule 9-04 Income Statements
Rule 9-05 Foreign Activities
Rule 9-06 Condensed Financial Information of Registrant

S-X 1-02(e)
Bank holding company defined

S-X 4-08(e)
Notes to financials - Restrictions on payment of dividends

S-X 4-08(m)

Notes to financials - Repurchase and reverse repurchase
agreements

S-K 801(c)

Securities Act -- Guide 3

S-K 802(c)

Securities Act -- Guide 3

Note: SEC is considering revising both Guide 3's and
also applying them to non-bank financial companies,
in addition to banks and bank holding companies

SAB 105 2004

Loan commitments accounted for as derivative instruments

SAB 102 2001

Loan loss allowance methodology and documentation issues

FASB Statements

FASB 114 1993

Impairment of a Loan

Amends FASB 5 and 15
FASB summary
FASB status

FASB 118 1994

Impairment of a Loan - Income Recognition

Amends FASB 114
FASB summary
FASB status

FASB 91 1986

Loan origination fees and expenses

Amends FASB 13, 60, and 65; rescinds FASB 17
FASB summary
FASB status

FASB 15 1977

Troubled Debt Restructurings

FASB 5 1981

Accounting for Contingencies

FASB EITFs

Effective EITFS

84-4
Acquisition, Development, and Construction Loans

84-9
Deposit Float of Banks
84-19
Mortgage Loan Payment Modifications
84-20
GNMA Dollar Rolls
85-8
Amortization of Thrift Intangibles
85-13
Sale of Mortgage Service Rights on Mortgages
Owned by Others
85-18
Earnings-per-Share Effect of Equity Commitment Notes
85-20
Recognition of Fees for Guaranteeing a Loan
85-24
Distribution Fees by Distributors of Mutual Funds That Do Not Have a Front-End Sales Charge
85-31
Comptroller of the Currency's Rule on Deferred Tax Debits
85-41
Accounting for Savings and Loan Associations under FSLIC Management Consignment Program
85-42
Amortization of Goodwill Resulting from Recording Time Savings Deposits at Fair Values
85-44
Differences between Loan Loss Allowances for GAAP and RAP
86-21
Application of the AICPA Notice to Practitioners regarding Acquisition, Development, and Construction Arrangements to Acquisition of an Operating Property
87-22
Prepayments to the Secondary Reserve of the FSLIC
87-34
Sale of Mortgage Servicing Rights with a Subservicing Agreement
88-19
FSLIC-Assisted Acquisitions of Thrifts
88-20
Difference between Initial Investment and Principal Amount of Loans in a Purchased Credit Card Portfolio
88-25
Ongoing Accounting and Reporting for a Newly Created Liquidating Bank
89-3
Balance Sheet Presentation of Savings Accounts in Financial Statements of Credit Unions
90-21
Balance Sheet Treatment of a Sale of Mortgage Servicing Rights with a Subservicing Agreement
92-5
Amortization Period for Net Deferred Credit Card Origination Costs
93-1
Accounting for Individual Credit Card Acquisitions
97-3
Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations after the Issuance of FASB Statement No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities

Superseded EITFS

84-21
Sale of a Loan with a Partial Participation Retained

Resolved by FAS 125

84-22
Prior Years' Earnings per Share following a Savings and Loan Association Conversion and Pooling

Resolved by FAS 141

84-31
Equity Certificates of Deposit

Resolved by FAS 133

85-3
Tax Benefits Relating to Asset Dispositions Following an Acquisition of a Financial Institution

Nullified by FAS 109

85-7
Federal Home Loan Mortgage Corporation Stock

Resolved by FTB 85-1

85-26
Measurement of Servicing Fee under FASB Statement No. 65, Accounting for Certain Mortgage Banking Activities, When a Loan Is Sold with Servicing Retained

Resolved by FTB 87-3 and FAS 125

85-33
Disallowance of Income Tax Deduction for Core Deposit Intangibles

Nullified by FAS 109

86-31
Reporting the Tax Implications of a Pooling of a Bank and a Savings and Loan Association

Nullified by FAS 141

86-38
Implications of Mortgage Prepayments on Amortization of Servicing Rights

Section A nullified by FAS 122 and FAS 125;
Section B nullified by FAS 125;
Section C superseded by Issue No. 89-4

86-39
Gains from the Sale of Mortgage Loans with Servicing Rights Retained

Nullified by FAS 122 and FAS 125

87-5
Troubled Debt Restructurings: Interrelationships between FASB Statement No. 15, Accounting by Debtors and Creditors for Troubled Debt Restructurings, and the AICPA Savings and Loan Guide

Nullified by FAS 114

88-17
Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations

Partially nullified by FAS 125 and superseded by Issue No. 97-3

89-9
Accounting for In-Substance Foreclosures

Nullified by FAS 114

90-11
Accounting for Exit and Entrance Fees Incurred in a Conversion from the Savings Association Insurance Fund to the Banking Insurance Fund

Deemed no longer technically helpful

92-10
Loan Acquisitions involving Table Funding Arrangements

Nullified by FAS 125

SEC FAQs

SAB 103

Topic 1 F One-bank holding company formations
Topic 1 K Acquired troubled financial institutions
Topic 2 A 5 M&A - Adjustments to loan loss allowances
Topic 5 W Transfers of nonperforming assets
Topic 6 H ASR 148 - Compensating balances
Topic 6 L Accounting for loan losses
Topic 11 G Tax-exempt bond holdings
Topic 11 H Disclosures re: foreign loans
Topic 11 I Foreign lending
Topic 11 K Application of Article 9 and Guide 3
Topic 11 N Financial assistance from regulators

Accounting FAQs Mar 2001

Topic II I Credit-linked securities of bank subsidiaries
Topic II K Industry Guide 3

Current accounting issues Aug 2001

Topic I E SAB 102
Topic II K Allowance for loan losses
Topic II L Loan splitting

Foreign private issuers May 2001

Current accounting issues Mar 2005

Topic II M Allowance for loan losses
Topic II N 1 Loans covered by buyback provisions
Topic II N 2 Restructured loans
Topic II N 3 Potential problem loans
Topic II N 4 Loans held for sale

Loan Loss Reserves

In re Comerica 2002 - 2005

Shareholder litigation over loan loss reserves

Eastern District Michigan
Settled for $21 million
Amended class action complaint 10.01.03
Motion to dismiss 3.12.04
Defendant's brief - Motion to dismiss 3.15.04
Defendant's brief - Imputed scienter 8.13.04
Defendant's reply brief 8.30.04
Plaintiff's response brief - Imputed scienter 8.30.04
Mediation order 9.27.04
Plaintiff's opposition 4.16.04
Settlement 7.06.05
Settlement motion 7.06.05

SEC enforcement action

C&D Order 7.15.05
Summarizes loan reserve requirements
Cites SAB 102 and internal control requirements

Premier Financial Bancorp 2005

SEC C&D Order 8.31.05

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