August 19, 2024 | Premium Service | Last week, as we wrote our comment about the investment by Bank of Nova Scotia (BNS) in KeyCorp (KEY), we went to the National Information Center of the FFIEC to check a number from the Q1 data. Normally, the Federal Reserve Board does not release the bank holding company performance reports (BHCPRs) or aggregate data until day 75 after the quarter close, an absurd delay that has been SOP for many years.
To our great surprise, however, the Q2 2024 BHCPR for KEY was available on 08/14/24 or day 45 after the quarter close. Most but not all of the larger banks were also available, making us suspect that there are possibly one of two things going on. First, the early disclosure by FFIEC staff may have been a mistake and, once discovered, the Fed was forced to disclose the other reports immediately as they were finalized. We sent a note to the folks at the BOG last week asking about the timing of the release.
The second possibility is that years of quiet criticism by WGA and other commercial consumers of bank regulatory data about the delay in public disclosure finally caused the Fed, FDIC and other agencies to release these valuable reports to the public almost a month early. The underlying bank and bank holding company (BHC) data is available on or about day 30 after the quarter end, thus most vendors like BankRegData release the data and analytics at that time. Bank CALL/TFR reports and Form Y-9C for large bank holding companies are finalized on or before day 30 after the quarter close.
The regulatory Form Y-9C is filed by banks in preliminary form quarterly as of the last calendar day of March, June, September, and December. By day 30 after the quarter end, most banks have finalized their disclosure and, importantly, made any adjustments required by supervisory personnel. This largely automated process ensures, hopefully, that the regulatory data in the Form Y-9C, which has a fixed accounting taxonomy, ties off to the GAAP data presented in the SEC Form 10s.
We reached out to the Fed last week for an explanation for this wondrous change. We will be sending a formal letter to Chairman Jerome Powell seeking clarification from the Fed about future BHCPR releases. Our hope is that this change will be permanent and that the Fed and other agencies in the FFIEC will align their disclosure schedules for the Y-9s, the BHCPR with the final bank CALL/TFR reports, which are publicly available for banks from day 1 after the quarter close depending on the bank.
The virtuous file early, while the less righteous hide at the back of the disclosure period. In the old days, we could track banks as they filed different iterations of CALL/TFR reports with the FDIC during the 30-day supervisory review period. The largest banks led by JPMorgan (JPM) tend to wait to drop their bank CALL report until the very end of the filing period.
Big banks want to conceal the regulatory financial data and peer metrics from investors and the public as long as possible. When we queried JPM IR a few weeks ago about the high delinquency rate in the bank’s HELOC portfolio, the cheery reply was wait for the CALL report for JPMorgan Chase Bank. And the bank data was available in early August, a month after JPM released its GAAP earnings disclosure.
Below for subscribers to our Premium Service we review the Q2 2024 parent company results for the seven largest depositories, including JPM, Citigroup (C), Bank of America (BAC), Wells Fargo & Co (WFC), U.S. Bancorp (USB), PNC Financial (PNC) and Truist Financial (TFC). We’ve added a couple of new charts to enhance the analysis. The chart below shows the top five banks five-year equity market returns, where JPM leads by a wide margin. Citi has delivered the best returns in the past year, however, followed by PNC.
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