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Arkansas State Bank Department

The mission of ASBD is to maintain a legal and regulatory structure for Arkansas's financial industry. This structure provides the public with convenient, safe and competitive banking, which fosters economic development within this State. Our mission is accomplished through efficient allocation of available human and other resources existing in our Examination, Information Technology and Administrative Services Divisions.

Common Reporting Errors

 

The Federal Reserve provides bank holding companies with forms for annual, quarterly or semi-annual reports (determined by asset size and number of subsidiaries).  One copy of each report sent to the Federal Reserve must also be sent to the Arkansas State Bank Department pursuant to Administrative Order #002.

The following reporting errors are most commonly noted:

  • Balance Sheet:  Failure to reconcile the parent company’s ‘investment in the equity of bank subsidiary’ to the bank’s Call Report ‘equity capital’ for the corresponding reporting period.  A reconcilement worksheet usually accompanies the FR Y-9 report form.  Refer to http://www.federalreserve.gov/boarddocs/reportforms/categoryindex.cfm?WhichCategory=1
  • Income Statement:  Failure to report ‘dividend income’ from subsidiaries and/or incorrect reporting of ‘equity in undistributed earnings of the bank subsidiary.'  “Undistributed earnings” is the difference between the bank’s net income and bank’s dividends paid.
  • Failure to properly accrue for dividends receivable/payable; interest receivable/payable; and income taxes receivable/payable.  Management is reminded that dividends are to be booked “payable” and deducted from retained earnings as soon as the Board declares dividends, regardless of payment date.
  • Trust preferred securities (“TruPS”).  Refer to instructions for appropriate FR Y-9 report form to determine correct reporting lines.  As of March 31, 2004 reporting date, Financial Accounting Standard 150 (FAS 150) and Financial Accounting Standards Board Interpretation No. 46 (FIN 46) change reporting instructions for trust preferred securities.  The following website contains the current proposal for revising FR Y-9 reporting of trust preferred securities.  http://www.federalreserve.gov/boarddocs/reportforms/formsreview/FRY9.20031215.ifr.pdf

It is recommended that a “Changes in Stockholders’ Equity” worksheet be maintained for the purpose of properly reconciling changes which occur to each of the parent company’s capital accounts.  Changes that affect the bank subsidiary’s capital accounts (which are not reflected in the bank’s income statement) are to be reflected on the books of the parent company in an appropriate capital account.  Other changes in the bank subsidiary’s capital accounts which will not be reflected on an income statement include accounting adjustments for prior years and net unrealized gain (loss) on available-for-sale securities.

Instructions for various Federal Reserve Reporting Forms can be found at:  http://www.federalreserve.gov/apps/reportforms


The Great Seal of Arkansas

The State Bank Department was created by Act 113 of 1913. The Department is charged with regulating commercial banks with main offices in Arkansas. These 74 banks hold assets of over $147.1 billion as of June 30, 2022. The Department also is charged with supervising the bank holding companies of Arkansas state-chartered banks; state-chartered trust companies; regional and county industrial development corporations; industrial loan institutions; and capital development companies. The Department operates to ensure the safety and soundness of, and public confidence in, these institutions and organizations.


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