Why Bank Earnings Reports Might Be Old News
Published: August 7, 2015 / Author: Ryan Tracy
Jeffrey Burks, a Notre Dame associate professor who co-authored the study, said “more advertising or publicizing of the timing of when these [call reports] come out is warranted” by the bank regulators who post them.
Many publicly traded banks wrapped up their second-quarter earnings reports before the end of July. Some banks didn’t, but for that group, investors actually might have had an early window into their performance: The banks’ quarterly regulatory filings, known as “call reports,” were likely already available, according to a new study by researchers at the University of Notre Dame.
Call reports don’t contain statements from management, like an earnings release would. They don’t contain information about publicly traded bank holding companies – only those holding companies’ federally insured bank subsidiaries.
But the reports, which the study found are usually published online around day 30 of each quarter’s end, do contain information about net income, lending, and other metrics. For some publicly traded bank-holding companies, especially smaller ones, numbers on the call report can look similar to those disclosed in an earnings release.
The Notre Dame study tracked bank disclosures from January 1, 2012, through March 31, 2014. About one in five times, a bank’s quarterly call report was made public before its earnings release. When that happened, the market reaction to the bank’s official earnings report was less significant – suggesting at least some investors already had information about the numbers the bank reported.