Accumulated Other Comprehensive Income Opt-out Election for March 31, 2015 Call Report

There is a one-time accumulated other comprehensive income (AOCI) opt-out election that must be made in a bank’s March 31, 2015 call report.  Eligible institutions may opt-out of the requirement to include most components of AOCI in common equity tier 1.   To make the AOCI opt-out election, institutions must enter “1” for “Yes” in item 3.a. of Part I of schedule RC-R.  If the institution elects to opt out, then AOCI treatment for regulatory capital will be consistent with the method used prior to January 1, 2015.  If the opt-out election is not made, then the institution’s calculation of common equity tier 1 will include most components of AOCI, which include net unrealized gains and losses, net of tax, on available for sale debt securities.

In addition to the AOCI opt-out election, various changes in the regulatory capital treatment for past-due loans, High Volatility Commercial Real Estate (HVCRE) loans, disallowed deferred tax assets, etc. are effective for the March 31, 2015 call report. 

If you have any questions regarding the AOCI opt-out election or other changes related to BASEL III please call us for assistance.