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On September 11, 2020, the SEC finalized rules updating the statistical disclosures that bank and savings and loan registrants provide to investors. The rules in Industry Guide 3 have not been significantly updated in 30 years, and these changes will eliminate disclosures that overlap with other SEC requirements and U.S. and international accounting guidance. The new disclosure requirements will be codified in a new section of Regulation S-K and Guide 3 will be rescinded effective January 1, 2023.

The rules will be effective 30 days after publication in the Federal Register and will apply to fiscal years ending on or after December 15, 2021. Financial institutions can implement the changes in advance of the mandatory compliance date. 

The new rules apply to domestic and foreign bank holding companies, banks, savings and loan holding companies, and savings and loan associations. Disclosures are required for each annual period presented and any additional interim period if there has been a material change in the information. The final rule requires the following disclosures: 

  • Distribution of assets, liabilities, and stockholders’ equity, the related interest income and expense, and interest rates and interest differential. This was formerly Item I in Guide 3. Categories of interest-earning assets and interest-bearing liabilities should be disaggregated if material. 
  • Weighted average yield of investments in debt securities by maturity. This applies only to debt securities that are not carried at fair value through earnings. Registrants no longer need to disclose book value information or disclose investments that exceed 10 percent of stockholders’ equity as these overlap with generally accepted accounting principles (GAAP) or international financial reporting standards requirements. 
  • Maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates. This was formerly Item III.B of Guide 3. The maturities should be based on contractual terms. Noncontractual rollovers or extensions used in measuring the allowance for expected credit losses should be included in the measurement classification and the policy disclosed. 
  • Certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented: 
    • Allowance for credit losses to total loans
    • Nonaccrual loans to total loans
    • Allowance for credit losses to nonaccrual loans
  • The allowance for credit losses by loan category. This was formerly Item IV.A of Guide 3. Registrants would be required to provide a tabular allocation of the credit allowance disclosure. The final rule adds a requirement that registrants use the loan categories presented in the U.S. GAAP financial statements. Registrants also must disclose disaggregated net charge-off ratios.SEC Acknowledgement
  •  Bank deposits including average amounts and rate paid and uninsured amounts. This was formerly Item V of Guide 3 with some revisions. Registrants would be required to disclose the amount of time deposits in uninsured accounts by maturity. Separate presentation would be required for U.S. time deposits in amounts in excess of the FDIC insurance limit, and time deposits that are otherwise uninsured, i.e., U.S. and non-U.S. time deposits in uninsured accounts, or non-U.S. time deposits in excess of any country-specified insurance fund, by time remaining until maturity of three months or less; over three through six months; over six through 12 months; and over 12 months1.The final rules define uninsured deposits for bank and savings and loan registrants that are U.S. federally insured depository institutions as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit or similar state deposit insurance regimes and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regimes. Registrants are permitted to disclose uninsured deposits at the reported date based on an estimate of uninsured deposits if it is not reasonably practicable to provide a precise measure of uninsured deposits. To use this accommodation, a registrant must disclose that the amounts are based on estimated amounts of uninsured deposits, and the estimates must be based on the same methodologies and assumptions used for the institution’s regulatory reporting requirements. 

Institutions have flexibility on where these disclosures should be presented in SEC filings. There is no mandate to include them in the notes to audited financial statements. Most registrants typically include these items within Management’s Discussion and Analysis. 

The final rule eliminates the following disclosures required by Guide 3: 

  • Return on equity and assets
  • Short-term borrowings


BKD follows the SEC rule-setting process. Visit BKD’s Public Company Reporting Resource Center to learn more. If you have questions about these changes, contact your BKD Trusted Advisortoday.

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U.S. GAAP requires disclosure of time deposits that meet or exceed the insured limit; however, it does not require this information to be disaggregated into the same maturity categories. In addition, U.S. GAAP does not require disclosure of time deposits that are otherwise uninsured by time remaining until maturity. 

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