THE ANALYST'S

ACCOUNTING OBSERVER
Jack T. Ciesielski, CPA, CFA

Volume 20, No. 11

September 26, 2011

Fair Value Reporting: A Financial Institutions Survey

A year ago, the FASBs proposal for revamping financial instrument accounting was the burning accounting issue
of the day. In the end, the FASB got singed by the fire. In the face of staunch opposition to the proposal from just about every
quarter -preparers, regulators, and even investors - the FASB pulled in its horns and moved to a more IFRS-like stance,
one that perpetuates amortized cost as the fundamental measure for financial instruments.
Theres a good chance that the FASBs new-yet- old-fashioned approach may be re-exposed for comment: its much
different than the May 2010 financial instruments proposal. One thing thats unlikely to change are the quarterly fair value
disclosures for financial instruments. In fact, they might be staked out parenthetically in the balance sheet - a much more
investor-friendly treatment than their current burial in the footnotes.
Whether theyre on the face of the balance sheet or tucked into the footnotes, theres still information in them for
investors to consider. What follows here is a survey of the differences between amortized cost and fair value for the 453 nonREIT financial institutions contained in the Russell 3000.

I. First Pass: Equity

Imagine an alternate reality where the FASB required all financial instruments to be reported at fair value - just like
it wanted to do a year ago. The key to that alternate reality is contained in the footnotes each quarter; the fair values of all
financial instruments remains a required disclosure for companies of all stripes. Enterprising investors can revise balance
sheets to reflect all financial instruments at fair value, include an estimated tax effect, and observe the net impact on equity.
Owing to the composition of their assets, financial institutions experience a greater impact from this exercise
than other industries. This survey focuses only on financial institutions because theyre the richest vein of disclosures to
be mined. The table below summarizes the effects of the mark-to-market exercise on the common equity of the 453 nonREIT financial institutions in the Russell 3000.

At 2Q2011:
CommonEquity:

FinancialLeverageBasedOn:

Reported

NetFairValue
Marks

Adjustedfor
FVMarks

FVMarks/
Reported
Equity

CommercialBanks
RegionalBanks
DiversifiedBanks

170
165
5

$398,954.8
233,868.9
165,085.9

($24,828.1)
(16,402.1)
(8,426.0)

$374,126.7
217,466.8
156,659.9

6.2%
7.0%
5.1%

10.01
9.68
10.47

9.41
9.04
9.95

0.60
0.64
0.52

DiversifiedFinancialServices
Thrifts&MortgageFinance
Insurance
CapitalMarkets
ConsumerFinance
GrandTotal

23
51
106
86
17
453

613,678.7
45,490.3
766,114.4
325,628.0
62,906.8
$2,212,773.0

(25,462.2)
(106.1)
(6,457.6)
(1,223.1)
2,141.1
($55,936.0)

588,216.5
45,384.2
759,656.8
324,404.9
65,047.9
$2,156,837.0

4.1%
0.2%
0.8%
0.4%
3.4%
2.5%

11.23
7.91
6.31
9.53
10.01
8.92

10.79
7.74
6.23
9.49
10.36
8.70

0.44
0.17
0.08
0.04
(0.35)
0.22

($inmillions)

Table of Contents
I. First Pass: Equity
- Changes, But Not What Youd Expect .......................................... 1
II. Second Pass: Assets & Liabilities
- More Of The Above ...................................................................... 6
III. Taking Fair Values At Face Value
- Only Thing You Can Do ............................................................. 10

Adjusted
Equity

Reported
Equity

Difference

R.G. Associates is:

President:

Jack Ciesielski

Research Co-ordinator: Paula Tanabe, CPA

Research Associate:

Melissa Herboldsheimer, CPA

Administration:

Brenda Rappold

Copyright2011,R.G.Associates,Inc.TheAnalystsAccountingObserverisatrademarkofR.G.Associates,Inc.
ForpurposesofclientsofR.G.Associates,Inc.only.Reproductionprohibitedwithoutpermission.Seenoteonbackpage.

-2-

Executive Summary
Fairvaluedisclosureshaveappearedinthefootnotesofquarterly
financial statements for the last several years. To compare fair
values of financial instruments to reported values, a survey was
madeofthefairvaluedisclosuresfor453financialinstitutionsinthe
Russell3000,excludingREITS,attheendofthesecondquarter.
Asagroup,therestatementofbalancesheetstothefairvalues
reportedbyfirmsfortheirfinancialinstrumentsresultedinacutto
commonequityabout2.5%intheaggregate,andariseinfinancial
leverageof22basispoints.
Withintheaggregate,therewasplentyofvariation.Theregional
bankgroupsawa7.0%dropincommonequity,whiletheconsumer
finance group saw a 3.4% increase in equity due to four large
beneficiariesoffairvaluetreatment.

DespitewidespreadoppositiontoFASBsplanstointroducefair
valueaccountingtobalancesheets,therestatementtofairvalue
wasrelativelybenign.Only190firmssawdeclinesinequityasa
result, while 166 firms saw common equity increases. The
remaindershowednochange.
Asurprisingnumberoffirmssawincreasesinassets:267ofthem.
Only76sawmarkdownsonafairvaluebasisunexpectedlylowin
aperiodofeconomicdistress.Therestshowednochange.
The same pattern existed for liabilities: more of the liabilities
increasedonafairvaluebasis,indicatingfavorablecreditstanding.
DuetoalongexistingflawinGAAP,fairvaluesforassetsmight
notbeagenuineexitvaluecalculation,whichmightexplainsome
ofthehigherfairvalues.

The table is sorted in descending order of the effect of fair values upon each financial industrys category of common
equity (the fair value marks to common equity column) and also in terms of each industrys financial leverage (total assets
divided by common equity). As might be expected, banks experience the greatest impact on capital from the restatement
exercise. At the other end of the range, the capital markets firms experience the least capital impact, because they widely
employ fair value reporting of assets and liabilities by default.
The purpose of restating the shareholders equity is to make something analytically useful from the
information. Fair values may be suspect, especially when theyre not based on quoted prices of securities trading in active
liquid markets - when based on models developed by the reporting companies. Yet overstatement of values does not seem
to be a problem, at least on the first pass. If anything, the financial instruments fair values seem to be saying that theres
overstatement present in amortized cost amounts. Assets on financial institutions balance sheets are not likely to fetch their
stated amount in a sale, even though managers hope to realize such amounts someday.
Fair value reporting is not perfect, but neither is amortized cost reporting. At least fair value reporting gives investors
an idea of what a balance sheet is worth in the here and now, and not in terms of some hoped-for future values. Knowing
what the assets of a firm might fetch in a current market gives investors a more informed view of a firms liquidity - and
a better base from which to build investment decisions. Capital levels are a fine yardstick for measuring a firms ability to
withstand losses, but liquidity is another important aspect of a firms ability to survive catastrophes. Capital adequacy is
merely an illusion if assets arent worth their stated value when the need arises to liquidate them.
Fair value reporting improves the investors picture of liquidity when it shows the values that assets might actually
fetch in the marketplace and when it shows the values at which liabilities could actually be settled. Some critics deride it
as theoretical values because the firms managers dont intend to liquidate the assets or settle the liabilities. While true,
a managements intention to hold securities until they return to amortized cost doesnt make them any more realistic than
their fair values - even if theyre only estimates of fair value rather than values observed in active, liquid markets.
More observations from the table:

Methodology
AccountingStandardCodification8251050requiresfirmstodisclosethefairvaluesofallfinancialinstruments.UsingDirectEdgar
software,the10QdisclosureswereisolatedforallnonREITfinancialfirmsintheRussell3000.(Whilemanyconsiderthemtobe
avarietyoffinancialinstitutions,REITshavecomparativelylittlebywayoffinancialinstrumentsintheirassetbase,sotheywere
excludedfromthedatabasetokeepthestudyfocusedonthefinancialfirmsmostlikelytoprovidefairvaluedisclosureexamples.)
Totalassetsandtotalliabilitiesatfairvalueweredeterminedbyadjustingreportedamounts(sourcedfromS&PsResearchInsight
database)forthedifferencesbetweenreportedandfairvalues.A35%taxeffectwasdeterminedonthenetassetandliability
differencesbetweenfairvalueandreportedvalues;wherethenettaxeffectresultedinanasset,totalassetsatfairvaluewere
increasedfortheestimateddeferredtaxasset,andwhenthenettaxeffectresultedinaliability,totalliabilitieswereincreasedfor
theestimateddeferredliability.Thesumofalldifferenceswasnettedagainststockholdersequitytodeterminetheeffectoffair
valuereportingoncapital.
Themethodologyencompassesallthatinvestorscandowithmeredisclosuresoffairvalues.Thetaxratemightdifferwidelyfrom
firmtofirm;moreimportantly,thequalityofthedisclosuresprobablyvariesfromfirmtofirm.Thepointofthestudyistosee
whatdirectionfairvaluereportingmightleadinvestors:tobevaguelyright,ratherthanexactlywrong.Whilenotassatisfying
asfullfairvaluereportingbyfirms,ithastobesufficientfornow.

-3Capital effects of fair value reporting vary by the kind of bank. Regional banks, with a larger concentration of
assets in loans than their diversified big brothers, show the greatest markdowns in equity and the greatest increase in
financial leverage. Below, the regional banks with financial leverage increases of 1.00 or more.

Regional Banks: Largest Negative Capital Impact At 2Q2011

($inmillions)

RegionalBanks
SunBancorp
Popular
WesternAllianceBancorp
RegionsFinancial
PeoplesBancorp
PrivateBancorp
AssociatedBancCorp
SCBTFinancial
ValleyNationalBancorp
CapitalCityBankGroup
Stellarone
TCFFinancial
HuntingtonBancshares
OrrstownFinancialServices
SandySpringBancorp
WestCoastBancorp
FirstHorizonNational
BridgeCapitalHoldings
OrientalFinancialGroup
SuntrustBanks
ZionsBancorp
UnitedCommunityBanks
BancorpRhodeIsland
Firstmerit
HanmiFinancial
EnterpriseBancorp
FifthThirdBancorp
Keycorp
BankoftheOzarks

CommonEquity:
NetFairValue Adjustedfor
Reported
Marks
FVMarks

FVMarks/
Reported
Equity

FinancialLeverageBasedOn:
Adjusted
Reported
Equity
Equity
Difference

$233,868.9

($16,402.1)

$217,466.9

7.0%

9.68

9.04

0.64

298.8
3,913.9
483.3
13,489.0
200.7
1,021.0
2,741.1
371.1
1,311.2
260.5
404.3
1,769.6
4,890.1
153.4
423.7
264.4
2,681.4
123.6
656.4
19,488.0
4,583.7
666.8
133.5
1,550.4
198.4
122.4
12,203.0
9,446.0
389.1

(170.0)
(2,236.4)
(163.9)
(5,533.5)
(75.3)
(312.0)
(1,100.0)
(104.3)
(326.2)
(64.4)
(126.9)
(345.4)
(922.0)
(29.4)
(81.4)
(47.3)
(467.0)
(20.7)
(80.6)
(3,091.4)
(531.0)
(80.0)
(12.1)
(205.3)
(17.0)
(11.3)
(1,423.5)
(987.4)
(34.7)

128.8
1,677.5
319.4
7,955.6
125.3
709.0
1,641.1
266.8
985.0
196.1
277.3
1,424.2
3,968.1
124.0
342.3
217.2
2,214.4
102.9
575.7
16,396.6
4,052.7
586.7
121.5
1,345.1
181.4
111.1
10,779.5
8,458.7
354.4

56.9%
57.1%
33.9%
41.0%
37.5%
30.6%
40.1%
28.1%
24.9%
24.7%
31.4%
19.5%
18.9%
19.2%
19.2%
17.9%
17.4%
16.7%
12.3%
15.9%
11.6%
12.0%
9.0%
13.2%
8.6%
9.2%
11.7%
10.5%
8.9%

23.67
22.02
19.89
15.8
13.98
16.67
12.82
14.04
14.72
12.93
10.16
13.29
13.16
12.16
10.36
11.04
11.03
9.98
12.4
10.32
12.65
12.47
13.46
10.53
14.91
13.15
10.21
10.47
11.37

10.75
9.97
13.47
9.7
8.98
11.87
8.04
10.35
11.04
9.98
7.26
10.64
10.85
9.98
8.53
9.31
9.34
8.36
10.79
8.83
11.21
11.11
12.12
9.25
13.67
12.01
9.08
9.4
10.35

12.92
12.05
6.42
6.10
5.00
4.80
4.78
3.69
3.68
2.95
2.90
2.65
2.31
2.18
1.83
1.73
1.69
1.62
1.61
1.49
1.44
1.36
1.34
1.28
1.24
1.14
1.13
1.07
1.02

Contrast those results with the entire diversified banks group shown below: only one of them - Wells Fargo - saw
its equity decline from restating financial instruments at fair value. Oddly, more of them saw equity increases - not the kind
of result to be expected from fair value reporting, judging by the uproar from the bankers over last years FASB proposal.

Diversified Banks Group At 2Q2011:

($inmillions)

DiversifiedBanks
WellsFargo
BancoLatinoAmericano
USBancorp
Comerica
EncoreBancshares

CommonEquity:
NetFairValue
Adjustedfor
Reported
Marks
FVMarks

FVMarks/
Reported
Equity

FinancialLeverageBasedOn:
Adjusted
Reported
Equity
Equity
Difference

$165,085.9

($8,426.0)

$156,659.9

5.1%

10.47

9.95

0.52

127,435.0
736.0
30,735.0
6,038.0
141.9

(9,085.7)
0.0
554.5
96.9
8.4

118,349.3
736.0
31,289.5
6,134.9
150.3

7.1%
0.0%
1.8%
1.6%
5.9%

10.61
7.89
10.32
8.84
9.98

9.89
7.89
10.44
8.97
10.33

0.72
0.00
(0.12)
(0.13)
(0.35)

-4More surprisingly, some regional banks share that result. Below, the regional banks where application of fair value
reporting on financial instruments resulted in decreases of 1.0 or more in their financial leverage.

Regional Banks: Largest Positive Capital Impact At 2Q2011

($inmillions)

RegionalBanks
StateBancorp
HamptonRoadsBankshares
BridgeBancorp
SeacoastBanking
FirstBancorpInc
TaylorCapitalGroup
Banner
BankofHawaii
TricoBancshares
FinancialInstitutions
EastWestBancorp
VirginiaCommerceBancorp
CityHoldingCo
AllianceFinancial
UnivestCorpofPA
EnterpriseFinlServices
MerchantsBancshares
StateBankFinancial
WintrustFinancial
CNBFinancial
SierraBancorp

CommonEquity:
NetFairValue
Adjustedfor
Reported
Marks
FVMarks
$233,868.9
125.0
161.6
78.0
124.3
131.5
103.8
391.2
1,003.4
204.9
216.3
2,146.3
200.8
310.4
140.1
273.0
204.1
104.8
374.6
1,423.7
122.2
165.4

($16,402.1)
67.4
32.2
16.1
19.9
31.5
5.1
87.4
197.5
50.5
49.4
364.1
26.0
68.4
27.3
73.1
21.7
12.8
108.9
242.1
15.0
30.0

$217,466.9
192.3
193.9
94.2
144.2
162.9
108.9
478.6
1,201.0
255.4
265.7
2,510.4
226.7
378.8
167.4
346.1
225.8
117.6
483.5
1,665.8
137.2
195.4

FVMarks/
Reported
Equity
7.0%
53.9%
19.9%
20.6%
16.0%
24.0%
4.9%
22.3%
19.7%
24.6%
22.9%
17.0%
12.9%
22.1%
19.4%
26.8%
10.6%
12.2%
29.1%
17.0%
12.3%
18.1%

FinancialLeverageBasedOn:
Adjusted
Reported
Equity
Equity
Difference
9.68
8.5
13.61
12.95
14.48
8.76
40.3
8.78
11.22
8.78
8.86
8.55
12.44
7.26
9.05
6.13
13.03
12.31
6.07
9
11.02
7.04

9.04
13.01
16.07
15.29
16.76
10.78
42.32
10.75
13.12
10.62
10.56
10.19
13.93
8.74
10.53
7.54
14.38
13.65
7.38
10.27
12.2
8.14

0.64
(4.51)
(2.46)
(2.34)
(2.28)
(2.02)
(2.02)
(1.97)
(1.90)
(1.84)
(1.70)
(1.64)
(1.49)
(1.48)
(1.48)
(1.41)
(1.35)
(1.34)
(1.31)
(1.27)
(1.18)
(1.10)

The entire consumer finance group shows beneficial effects from applying fair value reporting to all
financial instruments. Note from the first table that the entire consumer finance group saw an equity increase of 3.4% and
a 35 basis point drop in financial leverage - another counterintuitive result from applying fair value reporting. Below, the
17 companies comprising the group and the effects of the restatement. The groups results were dominated by four firms
large positive effects.

Consumer Finance Group At 2Q2011:

($inmillions)

ConsumerFinance
AmericanExpress
DiscoverFinancialServices
DollarFinancial
CashAmericaInternational
CreditAcceptance
WorldAcceptance
AdvanceAmerCashAdvance
NetspendHoldings
EZCorp
NicholasFinancial
GreenDot
ImperialHoldings
FirstCashFinancialServices
CapitalOneFinancial
FirstMarblehead
Nelnet
SLM

CommonEquity:
NetFairValue
Adjustedfor
Reported
Marks
FVMarks
$62,906.8
18,205.0
7,523.3
251.9
858.4
441.9
392.1
254.7
169.0
593.8
105.6
210.6
221.4
322.7
28,681.0
(759.6)
988.8
4,446.2

$2,141.1
(1,950.0)
(674.8)
(26.0)
(111.8)
(5.6)
(1.9)
(0.3)
0.0
0.0
0.0
0.0
0.0
0.0
1,469.7
426.7
525.0
2,490.2

$65,047.8
16,255.0
6,848.5
225.9
746.6
436.3
390.2
254.4
169.0
593.8
105.6
210.6
221.4
322.7
30,150.7
(332.9)
1,513.7
6,936.4

FVMarks/
Reported
Equity
3.4%
10.7%
9.0%
10.3%
13.0%
1.3%
0.5%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5.1%
56.2%
53.1%
56.0%

FinancialLeverageBasedOn:
Adjusted
Reported
Equity
Equity
Difference
10.01
9.16
9.43
5.99
2.1
3.67
1.7
1.62
1.58
1.13
2.19
1.53
1.32
1.15
6.73
18.58
16.96
28.15

10.36
8.12
8.43
5.32
1.75
3.58
1.69
1.62
1.58
1.13
2.19
1.53
1.32
1.15
6.96
10.64
25.15
45.06

(0.35)
1.04
1.00
0.67
0.35
0.09
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(0.23)
(7.94)
(8.19)
(16.91)

-5 Regardless of the industry, theres an

unexpected frequency of positive fair value
2Q2011Fair Value Equity Impact Summary
impacts. The table at left spells it out: there are
ImpactonCommonEquity:
almost as many firms having positive impacts as
AllNon
negative impacts. When you factor in the companies
Total Negative Negative Positive Zero where reported values didnt change at all (or
CommercialBanks
170
83
87
84
3 possibly did not report any), there were more nonRegionalBanks
165
82
83
81
2
negative impacts on common equity from fair value
DiversifiedBanks
5
1
4
3
1
reporting than negative impacts. Some of it makes
DiversifiedFinancialServices
23
13
10
2
8
sense: for instance, the 53 capital markets firms
Thrifts&MortgageFinance
51
20
31
29
2
showing zero impact from transplanted fair value
Insurance
106
44
62
37
25
CapitalMarkets
86
23
63
10
53 reporting. Thats because capital markets firms
ConsumerFinance
17
7
10
4
6 usually employ fair value accounting as their normal
453
190
263
166
97 reporting regime. Thats about the only part that
makes sense, however.
Looking at the fair value effects on equity alone provides a bottom-line view of how fair values differ from historical
cost - but if you want to make more sense out of why equity changed, you have to drill down into fair value differences for
assets and liabilities separately. Heres a case where its hard to make sense out of what the fair value differences are saying:
some firms show increases in assets on a fair value basis - an improvement in financial condition - while their liabilities are
marked down on a fair value basis, indicating that market participants believe theres a diminution of credit-standing. Thats
a contradiction embedded in the footnote disclosures of 34 companies in the study. Below, the differences in assets,
liabilities and equity for the 20 firms where equity increased by 10% or more because of simultaneous asset increases and
liability decreases.

Where Fair Values Contradict: 2Q2011

($inmillions)

StateBancorp
FBLFinancialGroup
NationalWesternLife
UnivestCorpofPA
FirstBancorpInc
CityHoldingCo
HoraceMannEducators
SierraBancorp
ViewpointFinancialGroup
SeacoastBanking
FirstCommonwealthFinancial
VirginiaCommerceBancorp
WSFSFinancial
AssuredGuaranty
ReinsuranceGroupofAmerica
EnterpriseFinancialServices

TotalAssets:
Reported
Value FVDiff.
$1,626.1
15,863.6
9,262.4
2,058.4
1,417.7
2,713.8
7,208.0
1,345.9
2,963.9
2,082.9
5,691.3
2,797.8
4,151.5
19,238.9
30,659.3
2,935.4

$8.1
95.9
342.7
61.8
9.5
35.6
3.9
28.6
33.2
4.2
31.1
23.7
15.6
10.8
404.4
7.5

@Fair
Value
$1,634.3
15,959.5
9,605.2
2,120.2
1,427.2
2,749.4
7,212.0
1,374.5
2,997.1
2,087.1
5,722.4
2,821.4
4,167.1
19,249.7
31,063.6
2,942.9

TotalLiabilities:
CommonEquity:
Reported
@Fair Reported
@Fair Equity%
Value FVDiff.
Value
Value FVDiff.
Value Increase
$1,464.8
14,583.6
8,005.9
1,785.4
1,261.5
2,403.4
6,275.8
1,180.5
2,556.9
1,911.7
4,929.2
2,530.7
3,775.6
15,288.9
25,334.8
2,698.4

($59.2)
(419.7)
(105.5)
(11.3)
(21.9)
(32.8)
(172.2)
(1.3)
(37.7)
(15.6)
(76.7)
(2.3)
(29.3)
(450.5)
(200.0)
(14.2)

$1,405.6
14,163.9
7,900.5
1,774.1
1,239.5
2,370.6
6,103.5
1,179.1
2,519.2
1,896.1
4,852.5
2,528.4
3,746.3
14,838.4
25,134.8
2,684.3

$125.0
1,277.0
1,256.5
273.0
131.5
310.4
932.3
165.4
407.0
124.3
762.1
200.8
375.9
3,950.0
5,324.5
204.1

$67.4
515.6
448.2
73.1
31.5
68.4
176.2
30.0
70.9
19.9
107.8
26.0
44.9
461.3
604.3
21.7

$192.3
1,792.6
1,704.7
346.1
162.9
378.8
1,108.5
195.4
477.9
144.2
869.8
226.7
420.8
4,411.3
5,928.9
225.8

53.9%
40.4%
35.7%
26.8%
24.0%
22.1%
18.9%
18.1%
17.4%
16.0%
14.1%
12.9%
11.9%
11.7%
11.4%
10.6%

Thats a curious set of companies, well represented by regional banks. Its almost as if the balance sheet is in a
tug-of-war with itself. On the asset side, where estimates are used for valuations of loans and other non-liquid financial
instruments, its as if managements are asserting that the firms assets are viable and valuable. On the liability side, its
as if the markets are saying there could be credit problems. The next section explores more of the fair value differences
in assets and liabilities.

-6-

II. Second Pass: Assets & Liabilities

The table below contains summarized information about the total assets, total liabilities and common equity for the
166 firms showing increases in common equity after application of fair value reporting. Fair value amounts for total assets
and total liabilities are straight from the financial statement footnotes; deferred tax effects are reflected in the fair value
differences for total liabilities. Because of the combination of higher assets at fair value and/or lower liabilities at fair value,
estimated deferred tax liabilities result. The table is sorted in descending order of fair value effect on common equity.

Where Fair Values Increased Equity at 2Q2011:

($inmillions)

TotalAssets:
Reported
Value FVDiff. @FairValue

TotalLiabilities:
Reported
Value
FVDiff.

Insurance
37 $1,473,828.5 $7,601.7 $1,481,430.2 $1,319,712.7
CommercialBanks
84
1,269,132.0
8,471.8 1,277,603.8
1,124,067.1
RegionalBanks
81
892,650.5
6,306.4
898,956.9
787,136.3
DiversifiedBanks
3
376,481.5
2,165.4
378,646.9
336,930.8
ConsumerFinance
4
433,066.6 (3,169.6)
429,897.0
399,145.2
Thrifts&MortgageFinance 29
126,019.5
2,666.7
128,686.2
107,327.0
CapitalMarkets
10
1,444,903.2
1,197.0 1,446,100.2
1,307,474.8
DiversifiedFinancialServices 2
1,633.0
331.1
1,964.1
931.6
Total
166 $4,748,582.8 $17,098.7 $4,765,681.5 $4,258,658.4

($2,475.4)
3,188.8
1,683.1
1,505.7
(8,081.1)
1,153.7
(27.9)
109.6
($6,132.3)

@Fair
Value

CommonEquity:
Reported
Value
FVDiff.

$1,317,237.3 $154,112.7
1,127,255.9
140,266.5
788,819.4
103,351.5
338,436.5
36,914.9
391,064.1
33,356.4
108,480.7
18,656.0
1,307,446.9
135,420.5
1,041.2
701.3
$4,252,526.1 $482,513.4

$10,077.1
5,283.1
4,623.4
659.7
4,911.5
1,513.0
1,224.9
221.5
$23,231.1

@Fair
Value

$164,189.8
145,549.5
107,974.9
37,574.6
38,267.9
20,169.0
136,645.4
922.8
$505,744.4

Theres a lot that leaps out of the table. Check the column for the fair value difference of total assets: except for the
consumer finance industry, the aggregate marks to fair value for all other industries were positive - meaning that assets
increased in a fair value reporting mode. Thats not what youd expect on a consistent basis.
Next, check the column for the fair value differences for the total liabilities: theyre negative for some of the
industries, including insurance, consumer finance, and capital markets. In total, the fair value of liabilities for firms in these
industries were less than their recorded value - and thats not a really good thing. In todays ultra-low interest rate
environment, if a firms debt instruments are worth less in the marketplace than their issuance price, its likely that a debt
discount exists because of market perceptions of the firms own creditworthiness. The fair values of the debt instruments
implicitly state the marketplaces collective view on a firms ability to repay its debts.
Below, the 25 regional banks with the largest absolute dollar increase in equity resulting from fair value reporting.
Note that only four - BB&T, East West Bancorp, Banner and Pinnacle Financial - have lower assets at fair value.

Regional Banks Where Fair Values Increased Equity at 2Q2011:

($inmillions)
RegionalBanks
PNCFinancial
BB&T
EastWestBancorp
WintrustFinancial
HancockHoldingCo
BankofHawaii
ColumbiaBankingSystem
CapitalSource
CityNational
BOKFinancial
StateBankFinancial
FirstCommonwlthFinancial
OldNationalBancorp
Banner
ProsperityBancshares
UnivestCorpofPA
CityHoldingCo
StateBancorp
UmpquaHoldings
1stSource
CommerceBancshares
GlacierBancorp
FNBCorp
PinnacleFinancialPartners
TricoBancshares

#
81

TotalAssets:
Reported
Value
FVDiff.
$892,650.5
263,117.0
159,310.0
21,872.7
14,615.9
19,757.5
13,161.2
4,429.1
9,314.9
22,526.1
24,238.2
2,766.3
5,691.3
8,018.8
4,206.1
9,657.1
2,058.4
2,713.8
1,626.1
11,459.7
4,354.9
19,570.9
6,978.3
9,857.2
4,831.3
2,176.2

$6,306.4
3,252.0
(1,017.0)
(418.8)
381.4
337.8
314.8
265.6
105.3
296.1
213.2
170.5
31.1
204.3
(3.3)
126.4
61.8
35.6
8.1
85.0
122.7
120.1
52.3
70.2
(4.8)
64.9

@Fair
Value
$898,957.0
266,369.0
158,293.0
21,453.9
14,997.3
20,095.3
13,476.0
4,694.7
9,420.2
22,822.2
24,451.3
2,936.8
5,722.4
8,223.1
4,202.7
9,783.6
2,120.2
2,749.4
1,634.3
11,544.7
4,477.7
19,690.9
7,030.6
9,927.3
4,826.5
2,241.1

TotalLiabilities:
Reported
Value
FVDiff.
$787,136.3
228,244.0
142,261.0
19,643.4
13,142.5
17,371.2
12,157.8
3,701.5
7,204.6
20,398.3
21,546.0
2,391.7
4,929.2
7,010.6
3,695.0
8,145.5
1,785.4
2,403.4
1,464.8
9,785.4
3,849.4
17,439.3
6,113.5
8,654.0
4,132.1
1,971.3

$1,683.1
2,760.6
(1,400.5)
(782.9)
139.3
137.4
117.3
75.8
(76.7)
134.8
96.9
61.6
(76.7)
108.1
(90.7)
48.8
(11.3)
(32.8)
(59.2)
22.6
60.4
59.8
(2.6)
15.4
(55.3)
14.4

@Fair
Value
$788,819.3
231,004.6
140,860.5
18,860.5
13,281.8
17,508.6
12,275.0
3,777.2
7,127.8
20,533.2
21,642.9
2,453.3
4,852.5
7,118.6
3,604.3
8,194.3
1,774.1
2,370.6
1,405.6
9,808.0
3,909.7
17,499.1
6,110.9
8,669.4
4,076.8
1,985.7

CommonEquity:
Reported
Value FVDiff.
$103,351.5 $4,623.4
34,225.0
491.4
17,049.0
383.5
2,146.3
364.1
1,423.7
242.1
2,386.3
200.3
1,003.4
197.5
727.7
189.8
2,110.4
182.0
2,127.7
161.3
2,692.2
116.3
374.6
108.9
762.1
107.8
1,008.3
96.2
391.2
87.4
1,511.6
77.6
273.0
73.1
310.4
68.4
125.0
67.4
1,674.3
62.4
505.6
62.4
2,131.6
60.3
864.8
54.9
1,203.1
54.8
607.8
50.5
204.9
50.5

@Fair
Value

$107,974.9
34,716.4
17,432.5
2,510.4
1,665.8
2,586.7
1,201.0
917.5
2,292.4
2,289.0
2,808.4
483.5
869.8
1,104.5
478.6
1,589.3
346.1
378.8
192.3
1,736.8
568.0
2,191.8
919.7
1,257.9
658.3
255.4

-7Below, the entire set of companies in the insurance industry with increased equity from fair value reporting. Again,
notice the scarcity of asset markdowns - while liability markdowns are common.

Insurers Where Fair Values Increased Equity at 2Q2011:

TotalAssets:

($inmillions)
Insurance

37

Life&HealthInsurance
12
AmericanEquityInvestmentLife
PrudentialFinancial
PrincipalFinancialGroup
FBLFinancialGroup
NationalWesternLife
ProtectiveLife
UnumGroup
StancorpFinancialGroup
PhoenixCompanies
KansasCityLifeIns
Citizens
IndependenceHolding
Property&CasualtyInsurance 15
MBIA
Allstate
AssuredGuaranty
ArgoGroupIntlHoldings
SelectiveINSGroup
CincinnatiFinancial
Amerisafe
Proassurance
UniversalInsuranceHldgs
HarleysvilleGroup
DonegalGroup
HilltopHoldings
HallmarkFinancialServices
EMCInsuranceGroup
MercuryGeneral
MultilineInsurance
6
GenworthFinancial
AmericanNationalInsurance
AmericanFinancialGroup
HoraceMannEducators
Assurant
HCCInsuranceHoldings
Reinsurance
4
ReinsuranceGroupofAmerica
AlterraCapitalHoldings
FlagstoneReinsuranceHld
EverestReGroup

Reported
Value

@FairValue
FVDiff.

$1,473,828.5 $7,601.7
971,973.8
28,566.8
613,377.0
149,278.4
15,863.6
9,262.4
50,987.8
58,015.8
18,454.4
21,377.3
4,392.2
1,040.7
1,357.4
226,140.7
31,668.0
129,023.0
19,238.9
6,513.7
5,369.6
15,702.0
1,152.5
4,926.6
896.7
3,239.5
1,248.0
947.5
747.1
1,221.0
4,246.5
212,309.9
112,347.0
22,446.9
34,053.0
7,208.0
26,779.8
9,475.1
63,404.2
30,659.3
10,497.4
3,243.6
19,003.9

TotalLiabilities:

5,795.0
(257.7)
3,997.0
439.4
95.9
342.7
523.8
172.6
446.0
0.0
31.3
(1.2)
5.1
238.7
(231.0)
345.0
10.8
0.0
50.4
7.0
27.7
16.6
0.0
8.0
3.1
1.0
0.0
0.0
0.0
1,107.5
370.0
609.4
9.0
3.9
112.8
2.4
460.4
404.4
56.1
0.0
0.0

$1,481,430.2
977,768.8
28,309.1
617,374.0
149,717.8
15,959.5
9,605.2
51,511.7
58,188.4
18,900.4
21,377.3
4,423.5
1,039.5
1,362.5
226,379.4
31,437.0
129,368.0
19,249.7
6,513.7
5,420.0
15,709.0
1,180.3
4,943.2
896.7
3,247.5
1,251.1
948.5
747.1
1,221.1
4,246.5
213,417.4
112,717.0
23,056.4
34,062.0
7,212.0
26,892.5
9,477.5
63,864.6
31,063.6
10,553.5
3,243.6
19,003.9

Reported
Value

@FairValue
FVDiff.

$1,319,712.7 ($2,475.4)
905,108.0
27,527.2
577,741.0
138,610.8
14,583.6
8,005.9
47,383.4
48,933.0
16,536.1
20,214.2
3,686.1
800.1
1,086.7
187,090.1
29,763.0
110,230.0
15,288.9
4,965.1
4,268.6
10,645.0
815.3
2,960.2
738.5
2,457.8
865.3
306.0
527.5
857.8
2,400.9
179,345.0
96,789.0
18,743.0
29,428.0
6,275.8
21,903.8
6,205.4
48,169.7
25,334.8
7,704.3
2,279.3
12,851.4

CommonEquity:

(396.9)
(2,776.3)
2,896.6
(491.7)
(419.7)
(105.5)
157.6
49.3
345.3
(49.8)
(3.1)
(3.1)
3.5
(1,666.8)
(928.5)
(231.6)
(450.5)
(78.8)
21.3
(15.8)
9.7
5.8
(3.3)
5.4
1.1
(0.3)
(0.7)
(0.5)
(0.2)
(222.9)
(107.1)
213.3
(198.4)
(172.2)
40.7
0.8
(188.9)
(200.0)
28.4
(11.8)
(5.4)

$1,317,237.3
904,711.2
24,750.9
580,637.6
138,119.1
14,163.9
7,900.5
47,541.0
48,982.3
16,881.4
20,164.4
3,683.0
797.0
1,090.1
185,423.2
28,834.6
109,998.5
14,838.4
4,886.3
4,289.9
10,629.3
825.0
2,966.0
735.3
2,463.2
866.4
305.7
526.9
857.3
2,400.7
179,122.1
96,681.9
18,956.3
29,229.7
6,103.5
21,944.5
6,206.3
47,980.8
25,134.8
7,732.6
2,267.5
12,846.0

Reported
Value

FVDiff.

@Fair
Value

$154,112.7 $10,077.1

$164,189.8

66,862.6
1,039.5
35,636.0
10,667.5
1,277.0
1,256.5
3,604.5
9,082.8
1,918.3
1,163.1
706.1
240.5
270.7
39,050.6
1,905.0
18,793.0
3,950.0
1,548.6
1,101.0
5,057.0
337.2
1,966.4
158.2
781.7
382.7
641.5
219.6
363.2
1,845.6
32,964.9
15,558.0
3,704.0
4,625.0
932.3
4,876.0
3,269.7
15,234.5
5,324.5
2,793.1
964.3
6,152.6

6,191.9
2,518.7
1,100.5
931.1
515.6
448.2
366.2
123.3
100.7
49.8
34.3
1.9
1.6
1,905.5
697.5
576.6
461.3
78.8
29.1
22.8
18.0
10.8
3.3
2.6
2.0
1.3
0.7
0.6
0.2
1,330.4
477.1
396.1
207.4
176.2
72.1
1.5
649.3
604.3
27.7
11.8
5.4

73,054.5
3,558.2
36,736.5
11,598.6
1,792.6
1,704.7
3,970.7
9,206.1
2,019.0
1,212.9
740.5
242.5
272.4
40,956.2
2,602.5
19,369.6
4,411.3
1,627.4
1,130.1
5,079.8
355.2
1,977.2
161.5
784.3
384.7
642.8
220.3
363.8
1,845.8
34,295.3
16,035.1
4,100.1
4,832.4
1,108.5
4,948.1
3,271.2
15,883.8
5,928.9
2,820.8
976.1
6,158.0

Lastly, the four companies making up the consumer finance industry. Notice that Capital One Financial and Nelnet
have the unusual markup of assets, while SLM and First Marblehead account for nearly all of the differences between
reported value and fair value for liabilities.

Consumer Finance Firms Where Fair Values Increased Equity at 2Q2011:

TotalAssets:
($inmillions)

ConsumerFinance
SLM
CapitalOneFinancial
Nelnet
FirstMarblehead

Reported
Value
$433,066.6
200,356.6
199,753.0
24,871.5
8,085.6

FVDiff. @FairValue
($3,169.6)
(5,109.0)
3,043.0
797.0
(1,900.7)

$429,897.0
195,247.6
202,796.0
25,668.6
6,184.9

TotalLiabilities:
Reported
Value
FVDiff. @FairValue
$399,145.2
195,345.3
171,072.0
23,882.7
8,845.2

($8,081.1)
(7,599.2)
1,573.4
272.1
(2,327.4)

$391,064.1
187,746.2
172,645.4
24,154.8
6,517.8

CommonEquity:
Reported
Value FVDiff.
$33,356.4
4,446.2
28,681.0
988.8
(759.6)

$4,911.5
2,490.2
1,469.7
525.0
426.7

@Fair
Value
$38,267.9
6,936.4
30,150.7
1,513.7
(332.9)

-8Surprisingly, only 76 of the firms, a mere 17% of the

total, saw assets decrease under fair value reporting.
CountofFVDifferences:
Marking assets to fair value (net of tax effects) increased
Total Negative Positive Zero total assets for 267 of the 453 in the study - 59% of all, a
170
62
105
3 rather sunny result for institutions mired in a global
165
61
102
2
economic swoon. Another 110 of the firms had no effect.

Where Fair Value Affects Total Assets: 2Q11

CommercialBanks
RegionalBanks
DiversifiedBanks
DiversifiedFinancialServices
Thrifts&MortgageFinance
Insurance
CapitalMarkets
ConsumerFinance

5
23
51
106
86
17
453

1
2
5
3
2
2
76
17%

3
12
43
71
27
9
267
59%

1
9
3
32
57
6
110
24%

Even more curious, the financial institutions such as

regional banks, thrifts and insurers were among the most
vocal opponents of FASBs proposal to increase fair value
reporting - yet more of each class enjoyed increased asset
values from fair value reporting than decreases. You have to
wonder why they were so belligerent. You could also wonder
about the veracity of their fair value disclosures.
Below, a look at the companies where the net-of-tax total asset fair values increased total assets by 3% or more.

Largest Positive Differences Between Fair Value and Reported Value: Assets
($inmillions)

Industry

ReportedTotal
Assets

Est.NetoftaxFair
ValueDifferences

TotalAssets
@FairValue

%Difference:Fair
Value/Reported

PortfolioRecoveryAssociates
DiversifiedFinancialServices
$1,021.6
$331.1
$1,352.7
32.4%
StateBankFinancial
CommercialBanks:Regional
2,766.3
170.5
2,936.8
6.2%
ColumbiaBankingSystem
CommercialBanks:Regional
4,429.1
265.6
4,694.7
6.0%
HudsonCityBancorp
Thrifts&MortgageFinance
51,778.6
2,510.2
54,288.8
4.8%
OritaniFinancial
Thrifts&MortgageFinance
2,569.1
110.2
2,679.3
4.3%
NorthwestBancshares
Thrifts&MortgageFinance
8,087.3
342.6
8,430.0
4.2%
547.5
13,936.3
4.1%
WashingtonFed
Thrifts&MortgageFinance
13,388.8
CashAmericaInterna onal
ConsumerFinance
1,504.2
60.2
1,564.5
4.0%
NationalWesternLife
Insurance
9,262.4
342.7
9,605.2
3.7%
TerritorialBancorp
Thrifts&MortgageFinance
1,488.2
52.2
1,540.4
3.5%
DimeCommunityBancshares
Thrifts&MortgageFinance
4,092.8
141.9
4,234.7
3.5%
Nelnet
ConsumerFinance
24,871.5
797.0
25,668.6
3.2%
FinancialInstitutions
CommercialBanks:Regional
2,282.9
71.0
2,353.9
3.1%
AstoriaFinancial
Thrifts&MortgageFinance
17,120.3
532.7
17,653.0
3.1%
UnivestCorpofPA
CommercialBanks:Regional
2,058.4
61.8
2,120.2
3.0%
Fairvalueimpactonassetsisduesolelytodeferredtaxassetarisingfromfairvaluedierenceonliabili es;nofairvalueassetdierencesotherwise.

At the other extreme, there were firms whose total assets fair value was less than the reported value. The median
discount on the total assets for the 76 discount firms was .70% of the reported value, in the same league as the median
premium size of .54% for the 267 premium firms. Below, the firms with a fair value discount on total assets of 2% or more.

Largest Negative Differences Between Fair Value and Reported Value: Assets
($inmillions)

Industry

Reported
Total
Assets

Est.Netoftax
FairValue
Differences

FirstMarblehead
Popular
SunBancorp
AssociatedBancCorp
Stellarone
RegionsFinancial
SouthwestBancorp
PeoplesBancorp
WestCoastBancorp
SterlingFinancial
SLM
FirstHorizonNational
SCBTFinancial
CapitalCityBankGroup
PrivateBancorp
WesternAllianceBancorp

ConsumerFinance
$8,085.6
CommercialBanks:Regional 39,013.3
CommercialBanks:Regional
3,213.8
CommercialBanks:Regional 22,048.5
CommercialBanks:Regional
2,935.4
CommercialBanks:Regional 130,908.0
CommercialBanks:Regional
2,660.5
CommercialBanks:Regional
1,802.7
CommercialBanks:Regional
2,462.6
CommercialBanks:Regional
9,241.6
ConsumerFinance
200,356.6
CommercialBanks:Regional 25,054.1
CommercialBanks:Regional
3,839.9
CommercialBanks:Regional
2,599.3
CommercialBanks:Regional 12,115.4
CommercialBanks:Regional
6,508.1

($1,900.7)
(2,067.0)
(164.8)
(1,006.2)
(116.9)
(5,174.5)
(87.0)
(51.0)
(64.7)
(238.9)
(5,109.0)
(619.0)
(94.0)
(63.0)
(293.6)
(155.6)

TotalAssets@Fair %Difference:Fair
Value Value/Reported
$6,184.9
36,946.4
3,049.0
21,042.3
2,818.6
125,733.6
2,573.5
1,751.7
2,397.9
9,002.7
195,247.6
24,435.1
3,745.9
2,536.2
11,821.8
6,352.4

23.5%
5.3%
5.1%
4.6%
4.0%
4.0%
3.3%
2.8%
2.6%
2.6%
2.5%
2.5%
2.4%
2.4%
2.4%
2.4%

-9The liabilities fair values imply that many more of

Fair Value Effects On Total Liabilities: 2Q11
the financial institutions are in fine health: 269 of them
CountofFVDifferences:
showed higher fair values than reported values, and 97 of
Total Negative Positive Zero
them showed no difference. Again, a cheerful outcome for
CommercialBanks
170
48
119
3
financial institutions in the midst of global crisis. Only 19%
RegionalBanks
165
47
116
2
of the firms showed lower fair values for their liability
5
1
3
1
financial instruments, likely indicating a market view that DiversifiedBanks
DiversifiedFinancialServices
23
1
14
8
their credit status is not as favorable as when the financial Thrifts&MortgageFinance
51
6
43
2
instruments originated.
Insurance
106
23
58
25
86
7
26
53
Its a standards flaw that disclosures provide no CapitalMarkets
ConsumerFinance
17
2
9
6
information enabling investors to discern how much of fair
453
87
269
97
value changes is due to interest rate shifts, leaving the rest
19%
59%
21%
of the fair value change to be attributed to credit standing.
As low as interest rates have gone - and stayed - its fair to surmise that negative comparisons between fair
value and reported value are due to credit standing. When interest rates rise - and someday they will - it will be harder
to get a reading on the credit message embedded in the fair values of liability financial instruments, simply because higher
interest rates will have a depressing effect on fair values. Below, a list of the firms where total liabilities show fair value
markdowns over 2%.

Largest Negative Differences Between Fair Value and Reported Value: Liabilities
($inmillions)

Industry

FirstMarblehead
AmericanEquityInvtLife
StateBancorp
EastWestBancorp
SLM
MBIA
AssuredGuaranty
SouthwestBancorp
FBLFinancialGroup
SterlingFinancial
HoraceMannEducators
BankMutual
Banner
CentralPacificFinancial

ConsumerFinance
Insurance
CommercialBanks:Regional
CommercialBanks:Regional
ConsumerFinance
Insurance
Insurance
CommercialBanks:Regional
Insurance
CommercialBanks:Regional
Insurance
CommercialBanks:Regional
CommercialBanks:Regional
CommercialBanks:Regional

ReportedTotal Est.NetoftaxFair
Liabilities ValueDifferences
$8,845.2
27,527.2
1,464.8
19,643.4
195,345.3
29,763.0
15,288.9
2,283.6
14,583.6
8,434.0
6,275.8
2,254.0
3,695.0
3,698.0

($2,327.4)
(2,776.3)
(59.2)
(782.9)
(7,599.2)
(928.5)
(450.5)
(65.8)
(419.7)
(238.4)
(172.2)
(56.1)
(90.7)
(76.2)

TotalLiabilities@
FairValue

%Difference:Fair
Value/Reported

$6,517.8
24,750.9
1,405.6
18,860.5
187,746.2
28,834.6
14,838.4
2,217.8
14,163.9
8,195.6
6,103.5
2,197.9
3,604.3
3,621.7

26.3%
10.1%
4.0%
4.0%
3.9%
3.1%
2.9%
2.9%
2.9%
2.8%
2.7%
2.5%
2.5%
2.1%

At the other end of the spectrum, the firms in the table below increased their total liabilities under fair value reporting
by at least 4%.

Largest Positive Differences Between Fair Value and Reported Value: Liabilities
($inmillions)

Industry

Reported
Total Est.NetoftaxFair
Liabilities ValueDifferences

%Difference:
TotalLiabilities@
Fair
FairValue Value/Reported

CashAmericaInternational
ConsumerFinance
$645.8
$172.1
$817.9
26.6%
Por olioRecoveryAssociates DiversifiedFinancialServices
463.2
115.9
579.0
25.0%
CalamosAssetManagement
CapitalMarkets
143.6
16.5
160.1
11.5%
AffiliatedManagers
CapitalMarkets
2,346.5
226.2
2,572.7
9.6%
LeucadiaNational
DiversifiedFinancialServices
2,386.7
154.3
2,541.0
6.5%
EatonVance
CapitalMarkets
1,211.1
74.7
1,285.8
6.2%
HudsonCityBancorp
Thrifts&MortgageFinance
46,890.7
2,687.2
49,577.9
5.7%
NewstarFinancial
DiversifiedFinancialServices
1,367.6
75.0
1,442.6
5.5%
AresCapital
CapitalMarkets
1,777.3
93.0
1,870.2
5.2%
LeggMason
CapitalMarkets
2,798.4
141.2
2,939.6
5.0%
Lazard
CapitalMarkets
2,223.2
111.0
2,334.2
5.0%
CITGroup
CommercialBanks:Regional
39,066.7
1,901.1
40,967.8
4.9%
AstoriaFinancial
Thrifts&MortgageFinance
15,841.8
735.5
16,577.3
4.6%
PresidentialLife
Insurance
3,210.5
131.0
3,341.5
4.1%
Fairvalueliabilitiesimpactdueonlytodeferredtaxliabilityarisingfromfairvaluedifferenceonassets;nootherfairvalueliabilitiesdifferencesexisted.

-10-

III. Taking Fair Values At Face Value

Investors with long memories might recall the mid-1990s, when the FASB retreated from a plan to require expense
recognition for the value of stock options issued as compensation. The half-loaf the FASB then served to investors was
annual disclosure of the expense in footnotes to the financial statements. The fair value situation today is fairly similar:
retreat from an objective, followed by disclosures intended to compensate for a lack of financial statement recognition.
This time, the best thing the FASB did was to require disclosures to be part of interim financial statements. Investors
make judgments about the economic worth of net assets whenever they buy or sell shares of a companys stock; it makes
sense for those net assets to reflect the most recent values for the assets and liabilities that compose shareholders equity.
The net effect of the value changes on equity can play a role in helping investors with valuation decisions, while the
directions of the fair value changes for the different financial instruments provides investors with market-based views of
a companys financial strength. Fair value markdowns of the assets indicate the markets think asset values are overstated
on a historical basis; fair value markdowns of liabilities indicate that markets harbor concerns about the credit standing of
the issuer. The reverse holds true as well: fair value markups of assets indicate that markets believe that reported asset values
are understated, and fair value markups of liabilities indicate that markets believe the credit standing of an issuer has
improved since the origination of the relevant liabilities.
There are a couple ways the disclosures could be improved, however. They dont give investors sufficient
information to determine how much of a fair value change is due to change in interest rates. Without that information,
investors cant really get a reading on what the fair values are telling them about the other specific factors - like the credit
standing of the issuer for financial instruments held as assets, or perhaps more importantly, like credit standing of the
company itself, which would be expressed in the fair values of the liabilities of the issuer. Another major lack: depository
institutions, like banks, are not required to disclose fair values of their demand deposits. Given the importance of those
liabilities to the operations of such institutions, this could amount to a serious omission. (The counter-argument is that
demand deposits at face value really reflect fair value already: the face value is the amount the depositor could withdraw
at any time.)
One glaring flaw in the existing standards has to do with, of all things, how fair value is determined for presentation
in the footnote disclosures. The definition of fair value was supposed to have been settled when Statement 157 (now ASC
Section 820) was issued in 2006: fair value was defined as the price that would be received to sell the asset or paid to
transfer the liability (an exit price). Entities do not necessarily sell assets at the prices paid to acquire them. Similarly, entities
do not necessarily transfer liabilities at the prices received to assume them. Note the (added) emphasis on exit price: its
what youd receive if you sold an asset today. That has implications for some of the asset values noted in the study.
The problem is that Statement 157/ASC 820 did nothing to clear up an inconsistent example of the fair value
disclosures that has been carried forward in the accounting standards since it first appeared in Statement 107 in
1991. That example (now in ASC 825-10-55-3) preceded the definition of fair value currently in effect, and it showed a
sample footnote disclosure where a bank determined fair value of other types of loans ... by discounting the future cash
flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same
remaining maturities. That might have been a definition of fair value in 1991, but not now: its an entry value, not an exit
value. Yet the problematic example remains in the literature, and firms are free to analogize to it. It might explain why the
fair values of regional banks were so often higher than reported value.
The FASB is still revamping its financial instruments accounting proposal and will likely issue an exposure draft
because its so radically different from the original proposal, and due process is one of the organizations strong points.
One anticipated change is that the fair values will be disclosed on the face of the balance sheet: much better real estate
in the financial statement package than the current location in the footnotes. Auditor scrutiny might ratchet upward if
items appear on the balance sheet as opposed to footnotes. One would expect that they also avail themselves of the
opportunity to clean up the non-GAAP example thats masquerading as GAAP. The problem is that the financial
instruments standard could take perhaps another year until issuance, with a further lag time in between issuance and
effective date. That will leave investors with sub-par disclosures for many more quarters, and will only put them off from
using them in the meantime.

-11Appendix - 2Q 2011 Balance Sheet at Fair Value

($inmillions)

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported

NetFV
Marks

CapitalMarkets
AssetMgmt&CustodyBanks
AffiliatedManagers
AmericanCapital
AmeripriseFinancial
ApolloInvestment
AresCapital
ArlingtonAssetInvestment
ArtioGlobalInvestors
BankofNewYorkMellon
Blackrock
BlackrockKelsoCapital
CalamosAssetManagement
CapitalSouthwest
CIFCDeerfield
Cohen&Steers
DiamondHillInvestmentGrp
EatonVance
EdelmanFinancialGroup
EpochHolding
FederatedInvestors
FifthStreetFinance
FinancialEngines
FranklinResources
GamcoInvestors
GladstoneCapital
GladstoneInvestment
GolubCapital
Harris&HarrisGroup
HerculesTechGrowthCap
ICGGroup
Invesco
JanusCapitalGroup
KohlbergCapital
LeggMason
MainStreetCapital
MCGCapital
MedallionFinancial
MedleyCapital
MVCCapital
NewMountainFinance
NGPCapitalResources
NorthernTrust
PennantParkInvestment
Price(T.Rowe)**
ProspectCapital
PzenaInvestmentMgmt
SafeguardScientifics
SEIInvestments
SolarCapital
StateStreet
THLCredit
TICCCapital
TriangleCapital
VirtusInvestment
Waddell&Reed
WestwoodHoldingsGroup

$1,094
$1,696
79
0
162
0
33
0
0
793
88
0
6
0
(8)
0
0
26
0
0
0
0
0
18
0
0
0
1
0
3
0
16
17
1
49
0
0
0
0
0
0
0
157
0
1
0
0
0
0
0
253
0
0
0
0
0
0

$2,317 $2,761,367
$2,247
$861,867
226
2,573
(33)
1,759
656
124,566
0
1,192
93
1,870
0
708
0
256
702
270,685
252
160,630
(5)
310
17
160
0
4
(53)
8,144
0
34
0
13
75
1,286
0
85
0 *
8
0
590
0
284
0
31
4,404
26
(1)
364
0
37
0
27
4
201
0
5
10
277
0
45
44
11,762
47
1,346
2
69
141
2,940
0
283
0
532
0
373
0
2
0
74
0
190
0
82
(117)
90,256
0
261
3
473
0
173
0
22
0
57
0
244
0
554
156
170,777
0
3
0
8
0
230
0
63
1
531
0
14

*
*

*
*
*
*
*
*

$3,091,098
$1,014,546
5,404
6,333
135,300
3,055
4,944
918
420
305,499
185,136
1,033
587
524
8,839
294
37
1,833
347
61
1,120
996
234
12,845
811
273
213
461
173
695
289
20,931
2,686
262
8,573
617
1,066
539
218
489
631
290
97,555
775
3,884
1,076
66
415
1,331
1,401
190,708
269
330
487
151
1,045
81

0.0%
0.2%
1.5%
0.0%
0.1%
0.0%
0.7%
0.0%
0.0%
0.3%
0.0%
0.0%
1.0%
0.0%
0.1%
0.0%
0.0%
1.4%
0.0%
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.3%
0.0%
0.5%
0.0%
0.1%
0.6%
0.3%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%

Equity:

Adjusted
FV
forFV Marks/
Marks Reported
0.1%
0.3%
9.6%
1.8%
0.5%
0.0%
5.2%
0.0%
0.0%
0.3%
0.2%
1.5%
11.5%
0.0%
0.6%
0.0%
0.0%
6.2%
0.0%
0.2%
0.0%
0.0%
0.0%
0.6%
0.3%
0.0%
0.0%
1.8%
0.0%
3.7%
0.0%
0.4%
3.6%
3.6%
5.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.3%
0.0%

NetFV
Marks
($1,223)
($551)
(147)
33
(494)
0
(60)
0
0
91
(164)
5
(11)
0
45
0
0
(49)
0
0
0
0
0
(8)
1
0
0
(2)
0
(6)
0
(29)
(31)
(2)
(92)
0
0
0
0
0
0
0
274
0
(2)
0
0
0
0
0
97
0
0
0
0
(1)
0

FV
Adjustedfor Marks/
FVMarks Reported
$324,405
$152,143
2,831
4,574
10,734
1,862
3,074
210
163
34,814
24,506
722
427
520
695
259
25
547
262
52
530
712
203
8,441
447
235
186
260
168
417
244
9,169
1,340
193
5,633
335
534
166
216
414
441
208
7,300
514
3,411
903
43
358
1,087
846
19,431
266
322
257
53
515
67

0.4%
0.4%
4.9%
0.7%
4.4%
0.0%
1.9%
0.0%
0.0%
0.3%
0.7%
0.7%
2.5%
0.0%
6.9%
0.0%
0.0%
8.2%
0.0%
0.1%
0.0%
0.0%
0.0%
0.1%
0.3%
0.0%
0.0%
0.9%
0.0%
1.5%
0.0%
0.3%
2.2%
0.8%
1.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3.9%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%

-12($inmillions)

DiversifiedCapitalMarkets
HFF
JMPGroup
Invst.Banking&Brokerage
BGCPartners
CowenGroup
Duff&Phelps
ETradeFinancial
EvercorePartners
FBR&Co
FXCM
GFIGroup
Gleacher&Company
GoldmanSachsGroup
Greenhill&Co
INTLFCStone
InvestmentTechnologyGp
JefferiesGroup
KBW
KnightCapitalGroup
LadenburgThalmannFinlServ
Lazard
LPLInvestmentHoldings
MFGlobalHoldings
MorganStanley
OppenheimerHoldings
OptionsxpressHoldings
PiperJaffray
RaymondJamesFinancial
Schwab(Charles)
StifelFinancial
SWSGroup
TDAmeritradeHolding
CommercialBanks
DiversifiedBanks
BancoLatinoamericanoDeCom
Comerica
EncoreBancshares
USBancorp
WellsFargo
RegionalBanks
1stSource
1stUnitedBancorp
AllianceFinancial
AmerisBancorp
AmesNational
ArrowFinancial
AssociatedBancCorp
Bancfirst
Bancorp
BancorpRhodeIsland
Bancorpsouth
BankKYFinancial
BankofHawaii
BankofMarinBancorp
BankoftheOzarks
Banner
BB&T
BOKFinancial

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported
$0
0
0
($602)
0
0
0
(708)
7
0
0
2
0
0
0
0
0
0
0
0
0
39
1
0
0
0
0
0
34
12
1
0
11
($10,621)
($2,079)
0
81
33
2,051
(4,245)
($8,542)
123
(3)
39
6
2
32
(1,006)
24
(20)
17
53
(3)
315
18
4
(3)
(1,017)
213

$1,031
384
648
$2,075,521
1,829
1,793
536
46,276
1,049
412
1,250
1,665
1,821
936,910
473
2,272
3,803
40,967
626
6,427
110
3,120
3,664
44,832
830,747
3,624
1,617
2,222
15,318
97,584
4,515
4,293
15,768
$3,745,377
$1,639,943
5,807
54,222
1,500
322,925
1,255,489
$2,105,434
4,478
1,258
1,515
2,863
1,003
1,934
21,042
5,292
2,446
1,635
13,420
1,598
13,476
1,355
4,030
4,203
158,293
24,451

0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.5%
0.7%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.1%
0.3%
0.1%
0.0%
0.1%
2.3%
0.6%
0.3%
0.4%
2.8%
0.2%
2.7%
0.2%
0.2%
1.7%
4.6%
0.5%
0.8%
1.0%
0.4%
0.2%
2.4%
1.3%
0.1%
0.1%
0.6%
0.9%

NetFV
Marks

Equity:

Adjusted
FV
forFV Marks/
Marks Reported

$0
$771
0
278
0
493
$70
$1,898,729
0
1,378
0
1,041
0
183
376
42,548
20
562
0
128
0
976
7
1,178
0
1,477
0
863,362
0
109
0
2,000
0
3,124
0
37,142
0
192
0
5,001
0
61
111
2,334
2
2,401
0
43,324
(650)
761,954
0
3,124
0
1,487
0
1,359
64
12,529
137
90,975
(27)
3,190
0
3,933
30
11,656
$14,207 $3,344,865
$6,347
$1,470,167
0
5,071
(16)
48,087
25
1,320
1,497
289,030
4,841
1,126,659
$7,860
$1,874,698
60
3,910
(1)
1,047
12
1,347
4
2,584
4
875
19
1,757
94
19,143
35
4,832
(4)
2,199
29
1,514
56
12,176
(2)
1,434
117
12,275
8
1,217
38
3,676
(91)
3,604
(1,401)
140,861
97
21,643

0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.9%
3.7%
0.0%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5.0%
0.1%
0.0%
0.1%
0.0%
0.0%
0.0%
0.5%
0.2%
0.8%
0.0%
0.3%
0.4%
0.4%
0.0%
0.0%
1.9%
0.5%
0.4%
0.4%
1.6%
0.1%
0.9%
0.1%
0.5%
1.1%
0.5%
0.7%
0.2%
1.9%
0.5%
0.1%
1.0%
0.7%
1.1%
2.5%
1.0%
0.4%

NetFV
Marks
$0
0
0
($672)
0
0
0
(1,085)
(13)
0
0
(4)
0
0
0
0
0
0
0
0
0
(72)
(1)
0
650
0
0
0
(30)
(125)
28
0
(20)
($24,828)
($8,426)
0
97
8
554
(9,086)
($16,402)
62
(2)
27
3
(2)
13
(1,100)
(10)
(16)
(12)
(3)
(2)
198
10
(35)
87
384
116

FV
Adjustedfor Marks/
FVMarks Reported
$260
106
154
$172,002
452
752
353
3,728
487
284
274
487
344
70,448
317
272
679
3,824
434
1,426
49
786
1,262
1,377
67,285
496
129
863
2,789
6,609
1,325
360
4,112
$374,127
$156,660
736
6,135
150
31,289
118,349
$217,467
568
211
167
229
128
177
1,641
460
246
121
1,244
148
1,201
139
354
479
17,433
2,808

0.0%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
22.5%
2.6%
0.0%
0.0%
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8.4%
0.1%
0.0%
1.0%
0.0%
0.0%
0.0%
1.1%
1.9%
2.2%
0.0%
0.5%
6.2%
5.1%
0.0%
1.6%
5.9%
1.8%
7.1%
7.0%
12.3%
0.8%
19.4%
1.2%
1.7%
7.9%
40.1%
2.2%
6.0%
9.0%
0.2%
1.1%
19.7%
7.5%
8.9%
22.3%
2.2%
4.3%

-13($inmillions)

RegionalBanks(contd)
BostonPrivateFinlHoldings
BridgeBancorp
BridgeCapitalHoldings
BrynMawrBank
CamdenNational
CapeBancorp
CapitalCityBankGroup
Capitalsource
CardinalFinancial
CascadeBancorp
CathayGeneralBancorp
CenterBancorp
CenterFinancial
CenterstateBanks
CentralPacificFinancialCp
CenturyBancorp
ChemicalFinancial
CITGroup
Citizens&Northern
CityHoldingCo
CityNational
CNBFinancial
CobizFinancial
ColumbiaBankingSystem
CommerceBancshares
CommunityBankSystem
CommunityTrustBancorp
Cullen/FrostBankers
CVBFinancial
EagleBancorp
EastWestBancorp
EnterpriseBancorp
EnterpriseFinlServicesCp
FNBCorp
FifthThirdBancorp
FinancialInstitutions
FirstBancorp
FirstBancorpInc
FirstBusey
FirstCitizensBancshares
FirstCmntyBancshares
FirstCommonwlthFinl
FirstFinancial
FirstFinlBancorp
FirstFinlBankshares
FirstHorizonNational
FirstInterstateBancsystem
FirstLongIsland
FirstMerchants
FirstMidwestBancorp
Firstmerit
FultonFinancial
GermanAmericanBancorp
GlacierBancorp
GreatSouthernBancorp
HamptonRoadsBankshares
HancockHoldingCo
HanmiFinancial

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported
61
26
(6)
25
26
10
(63)
105
30
13
36
5
(7)
8
(77)
0
3
722
12
36
296
21
(3)
266
120
38
7
49
91
1
(419)
(10)
8
70
(729)
71
(37)
10
37
(69)
26
31
0
(3)
0
(619)
1
16
7
18
(179)
(4)
1
52
5
42
338
(7)

6,098
1,219
1,028
1,766
2,357
1,078
2,536
9,420
2,195
1,575
10,571
1,313
2,262
2,165
4,055
2,598
5,207
48,732
1,322
2,749
22,822
1,513
2,415
4,695
19,691
6,428
3,491
18,528
6,551
2,355
21,454
1,461
2,943
9,927
110,077
2,354
3,297
1,427
3,508
20,953
2,232
5,722
2,502
6,038
3,841
24,435
7,204
1,871
4,101
8,148
14,169
15,963
1,818
7,031
3,423
2,639
20,095
2,704

1.0%
2.2%
0.6%
1.4%
1.1%
0.9%
2.4%
1.1%
1.4%
0.8%
0.3%
0.4%
0.3%
0.4%
1.9%
0.0%
0.0%
1.5%
0.9%
1.3%
1.3%
1.4%
0.1%
6.0%
0.6%
0.6%
0.2%
0.3%
1.4%
0.0%
1.9%
0.7%
0.3%
0.7%
0.7%
3.1%
1.1%
0.7%
1.1%
0.3%
1.2%
0.5%
0.0%
0.1%
0.0%
2.5%
0.0%
0.9%
0.2%
0.2%
1.2%
0.0%
0.0%
0.7%
0.1%
1.6%
1.7%
0.3%

NetFV
Marks
28
10
14
11
22
9
1
(77)
33
10
110
11
(27)
4
(76)
0
25
1,901
25
(33)
135
6
(2)
76
60
81
(16)
20
60
6
(783)
1
(14)
15
695
22
(25)
(22)
21
63
28
(77)
10
14
2
(152)
19
23
(23)
4
26
(45)
5
(3)
12
9
137
10

Equity:

Adjusted
FV
forFV Marks/
Marks Reported
5,505
1,125
925
1,568
2,135
932
2,340
7,128
1,960
1,360
9,164
1,188
1,956
1,910
3,622
2,443
4,658
40,968
1,181
2,371
20,533
1,375
2,208
3,777
17,499
5,741
3,116
16,321
5,836
2,143
18,860
1,350
2,684
8,669
98,899
2,071
2,957
1,240
3,062
19,274
1,932
4,853
2,169
5,334
3,365
22,221
6,462
1,704
3,603
6,992
12,823
13,969
1,663
6,111
3,116
2,445
17,509
2,522

0.5%
0.9%
1.6%
0.7%
1.0%
1.0%
0.1%
1.1%
1.7%
0.7%
1.2%
0.9%
1.4%
0.2%
2.1%
0.0%
0.5%
4.9%
2.2%
1.4%
0.7%
0.5%
0.1%
2.0%
0.3%
1.4%
0.5%
0.1%
1.0%
0.3%
4.0%
0.1%
0.5%
0.2%
0.7%
1.1%
0.8%
1.7%
0.7%
0.3%
1.5%
1.6%
0.5%
0.3%
0.0%
0.7%
0.3%
1.4%
0.6%
0.1%
0.2%
0.3%
0.3%
0.0%
0.4%
0.4%
0.8%
0.4%

NetFV
Marks
33
16
(21)
14
4
1
(64)
182
(3)
3
(75)
(6)
21
4
(0)
0
(22)
(1,179)
(13)
68
161
15
(2)
190
60
(43)
23
30
32
(5)
364
(11)
22
55
(1,424)
49
(13)
31
16
(132)
(2)
108
(10)
(18)
(1)
(467)
(18)
(7)
29
14
(205)
41
(4)
55
(8)
32
200
(17)

FV
Adjustedfor Marks/
FVMarks Reported
535
94
103
197
222
146
196
2,292
235
216
1,158
115
252
255
433
155
548
7,764
140
379
2,289
137
207
918
2,192
687
375
2,206
715
188
2,510
111
226
1,258
10,780
266
277
163
346
1,678
281
870
333
704
477
2,214
691
167
430
964
1,345
1,994
156
920
250
194
2,587
181

6.5%
20.6%
16.7%
7.5%
1.9%
0.7%
24.7%
8.6%
1.2%
1.5%
6.1%
4.7%
8.9%
1.7%
0.1%
0.0%
3.9%
13.2%
8.6%
22.1%
7.6%
12.3%
0.9%
26.1%
2.8%
5.9%
6.6%
1.4%
4.6%
2.8%
17.0%
9.2%
10.6%
4.6%
11.7%
22.9%
4.3%
24.0%
4.9%
7.3%
0.8%
14.1%
2.9%
2.5%
0.2%
17.4%
2.6%
4.2%
7.4%
1.5%
13.2%
2.1%
2.7%
6.3%
2.9%
19.9%
8.4%
8.6%

-14($inmillions)

RegionalBanks(contd)
HeartlandFinancialUSA
HeritageCommerce
HeritageFinancial
HomeBancshares
HudsonValleyHolding
HuntingtonBancshares
Iberiabank
IndependentBank
IntlBancshares
InvestorsBancorp
Keycorp
LakelandBancorp
LakelandFinancial
M&TBank**
MainsourceFinlGroup
MBFinancial
MerchantsBancshares
MetroBancorp
MidsouthBancorp
NBTBancorp
NaraBancorp
NationalBankshares
NationalPennBancshares
NorthfieldBancorp
OldNationalBancorp
OmniAmericanBancorp
OrientalFinancialGroup
OrrstownFinancialServices
PacificCapitalBancorp
PacificContinental
PacwestBancorp
ParkNational
ParkSterling
PennsWoodsBancorp
PeoplesBancorp
PinnacleFinlPartners
PNCFinancial
Popular
PrivateBancorp
ProsperityBancshares
RegionsFinancial
Renasant
RepublicBancorp
S&TBancorp
SYBancorp
SandySpringBancorp
SCBTFinancial
SeacoastBanking
SierraBancorp
SignatureBank
SimmonsFirstNational
SouthsideBancshares
SouthwestBancorp
StateBancorp
StateBankFinancial
Stellarone
SterlingBancorp
SterlingFinancial

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported

NetFV
Marks

(12)
6
22
(8)
35
(821)
(131)
18
(22)
47
(252)
12
3
(21)
(20)
(50)
17
(16)
7
82
41
(7)
11
28
204
11
55
(24)
18
(7)
6
39
(3)
(6)
(51)
(5)
3,252
(2,067)
(294)
126
(5,174)
(22)
67
(13)
20
(66)
(94)
4
29
0
2
21
(87)
8
171
(117)
18
(239)

(12)
(1)
9
11
11
101
(122)
4
81
105
735
17
12
186
(10)
(28)
4
(7)
4
73
26
(4)
89
24
108
10
135
6
22
(3)
39
70
0
(8)
24
(55)
2,761
169
18
49
359
(38)
49
11
18
15
10
(16)
(1)
0
13
11
(66)
(59)
62
10
8
(238)

3,999
1,268
1,361
3,686
2,853
52,229
11,322
4,861
11,799
10,253
88,530
2,753
2,738
77,706
2,800
9,928
1,448
2,371
1,056
5,419
3,008
1,028
8,644
2,336
8,223
1,339
7,137
1,508
5,854
1,222
5,401
7,368
608
739
1,752
4,827
266,369
36,946
11,822
9,784
125,734
4,237
3,172
4,045
1,964
3,546
3,746
2,087
1,375
13,085
3,266
3,136
2,574
1,634
2,937
2,819
2,600
9,003

0.3%
0.5%
1.6%
0.2%
1.2%
1.5%
1.1%
0.4%
0.2%
0.5%
0.3%
0.4%
0.1%
0.0%
0.7%
0.5%
1.2%
0.7%
0.7%
1.5%
1.4%
0.7%
0.1%
1.2%
2.5%
0.9%
0.8%
1.6%
0.3%
0.6%
0.1%
0.5%
0.5%
0.8%
2.8%
0.1%
1.2%
5.3%
2.4%
1.3%
4.0%
0.5%
2.2%
0.3%
1.0%
1.8%
2.4%
0.2%
2.1%
0.0%
0.1%
0.7%
3.3%
0.5%
6.2%
4.0%
0.7%
2.6%

Equity:

Adjusted
FV
forFV Marks/
Marks Reported

NetFV
Marks

3,653
1,073
1,142
3,201
2,533
47,899
9,824
4,391
10,339
9,372
79,780
2,508
2,487
68,669
2,491
8,605
1,330
2,163
914
4,875
2,621
894
7,589
1,934
7,119
1,137
6,494
1,384
5,154
1,048
4,921
6,651
437
663
1,609
4,077
231,005
35,219
10,873
8,194
114,379
3,742
2,707
3,477
1,782
3,204
3,479
1,896
1,179
12,028
2,872
2,882
2,218
1,406
2,453
2,520
2,371
8,196

0
7
13
(20)
24
(922)
(9)
14
(102)
(58)
(987)
(5)
(9)
(207)
(11)
(22)
13
(9)
4
9
15
(3)
(78)
4
96
2
(81)
(29)
(4)
(3)
(32)
(30)
(3)
2
(75)
51
491
(2,236)
(312)
78
(5,533)
16
19
(24)
2
(81)
(104)
20
30
0
(11)
10
(21)
67
109
(127)
9
(1)

0.3%
0.1%
0.8%
0.3%
0.4%
0.2%
1.2%
0.1%
0.8%
1.1%
0.9%
0.7%
0.5%
0.3%
0.4%
0.3%
0.3%
0.3%
0.4%
1.5%
1.0%
0.5%
1.2%
1.3%
1.5%
0.9%
2.1%
0.4%
0.4%
0.3%
0.8%
1.1%
0.0%
1.2%
1.5%
1.3%
1.2%
0.5%
0.2%
0.6%
0.3%
1.0%
1.8%
0.3%
1.0%
0.5%
0.3%
0.8%
0.1%
0.0%
0.5%
0.4%
2.9%
4.0%
2.6%
0.4%
0.4%
2.8%

FV
Adjustedfor Marks/
FVMarks Reported
267
136
219
435
319
3,968
1,498
470
1,250
881
8,459
227
250
8,176
252
1,129
118
208
123
545
322
134
1,055
402
1,104
203
576
124
700
174
480
620
171
76
125
658
34,716
1,677
709
1,589
7,956
496
465
462
181
342
267
144
195
1,057
393
254
288
192
484
277
228
807

0.2%
5.4%
6.4%
4.3%
8.0%
18.9%
0.6%
3.1%
7.6%
6.2%
10.5%
2.3%
3.4%
2.5%
4.1%
1.9%
12.2%
4.1%
3.0%
1.7%
4.7%
1.9%
6.9%
1.1%
9.5%
0.8%
12.3%
19.2%
0.6%
1.9%
6.3%
4.7%
1.6%
2.4%
37.5%
8.3%
1.4%
57.1%
30.6%
5.1%
41.0%
3.3%
4.2%
5.0%
1.4%
19.2%
28.1%
16.0%
18.1%
0.0%
2.6%
4.0%
6.9%
53.9%
29.1%
31.4%
4.2%
0.1%

-15($inmillions)

RegionalBanks(contd)
SunBancorp
SuntrustBanks
SusquehannaBancshares
SVBFinancialGroup
SynovusFinancial
TaylorCapitalGroup
TCFFinancial
TexasCapitalBancshares
TompkinsFinancial
TowerBancorp
TricoBancshares
Trustmark
UMBFinancial
UmpquaHoldings
UnionFirstMarketBankshares
UnitedBankshares
UnitedCommunityBanks
UnivestCorpofPA
ValleyNationalBancorp
VirginiaCommerceBancorp
WashingtonBankingCo
WashingtonTrBancorp
WebsterFinancial
Wesbanco
WestBancorporation
WestCoastBancorp
WestamericaBancorp
WesternAllianceBancorp
WilshireBancorp
WintrustFinancial
ZionsBancorp
ConsumerFinance
AdvanceAmerCashAdvance
AmericanExpress
CapitalOneFinancial
CashAmericaIntl
CreditAcceptance
DiscoverFinancialServices
DollarFinancial
EZCorp
FirstCashFinancialServices
FirstMarblehead
GreenDot
ImperialHoldings
Nelnet
NetspendHoldings
NicholasFinancial
SLM
WorldAcceptance
DiversifiedFinancialServices
MultiSectorHoldings
CompassDiversifiedHoldings
LeucadiaNational
PicoHoldings
OtherDiversifiedFinlServices
BankofAmerica
Citigroup
JPMorganChase&Co

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported
(165)
(3,002)
(104)
40
(23)
(6)
96
8
47
12
65
58
78
85
14
(44)
(95)
62
27
24
(17)
70
138
(81)
6
(65)
52
(156)
(3)
381
(99)
($912)
0
1,050
3,043
60
20
1,111
14
0
0
(1,901)
0
0
797
0
0
(5,109)
1
($15,886)
$54
0
54
0
($16,490)
(13,000)
(4,660)
1,170

*
*
*

3,049
169,171
14,054
19,406
28,291
4,389
18,931
6,717
3,334
2,538
2,241
9,757
12,849
11,545
3,866
7,090
7,314
2,120
14,497
2,821
1,660
3,006
17,945
5,344
1,267
2,398
4,929
6,352
2,678
14,997
51,262
$651,041
413
148,846
202,796
1,564
1,602
64,549
1,354
669
371
6,185
322
292
25,669
267
231
195,248
663
$6,605,875
$10,906
976
9,246
684
$6,448,219
2,248,319
1,951,966
2,247,934

5.1%
1.7%
0.7%
0.2%
0.1%
0.1%
0.5%
0.1%
1.4%
0.5%
3.0%
0.6%
0.6%
0.7%
0.4%
0.6%
1.3%
3.0%
0.2%
0.8%
1.0%
2.4%
0.8%
1.5%
0.5%
2.6%
1.1%
2.4%
0.1%
2.6%
0.2%
0.1%
0.0%
0.7%
1.5%
4.0%
1.3%
1.8%
1.0%
0.0%
0.0%
23.5%
0.0%
0.0%
3.2%
0.0%
0.0%
2.5%
0.2%
0.2%
0.5%
0.0%
0.6%
0.0%
0.3%
0.6%
0.2%
0.1%

NetFV
Marks

Equity:

Adjusted
FV
forFV Marks/
Marks Reported

5
2,920
89
152,602
(138)
11,997
23
17,373
(11)
25,451
(11)
4,141
442
17,506
13
6,159
35
3,022
(13)
2,257
14
1,986
9
8,515
34
11,672
23
9,808
3,411
2
32
6,362
(15)
6,534
(11)
1,774
353
13,512
(2)
2,528
(12)
1,504
51
2,705
101
16,065
(13)
4,790
1
1,143
(17)
2,160
20
4,348
8
5,901
(1)
2,390
139
13,282
432
44,880
($3,054) $585,428
0
159
3,000
132,591
1,573
172,645
172
818
26
1,166
1,786
57,700
40
1,128
0
75
0
49
(2,327)
6,518
0
111
0
71
272
24,155
0
98
0
126
(7,599)
187,746
3
272
$9,577 $5,992,984
$154
$3,090
0
429
154
2,541
0
120
$8,614
$5,889,623
14
2,039,157
6,000
1,783,981
2,600
2,066,485

0.2%
0.1%
1.1%
0.1%
0.0%
0.3%
2.6%
0.2%
1.2%
0.6%
0.7%
0.1%
0.3%
0.2%
0.1%
0.5%
0.2%
0.6%
2.7%
0.1%
0.8%
1.9%
0.6%
0.3%
0.1%
0.8%
0.5%
0.1%
0.1%
1.1%
1.0%
0.5%
0.3%
2.3%
0.9%
26.6%
2.3%
3.2%
3.7%
0.0%
0.0%
26.3%
0.0%
0.0%
1.1%
0.0%
0.0%
3.9%
1.1%
0.2%
5.3%
0.0%
6.5%
0.0%
0.1%
0.0%
0.3%
0.1%

NetFV
Marks
(170)
(3,091)
34
17
(11)
5
(345)
(5)
12
25
50
49
44
62
12
(76)
(80)
73
(326)
26
(5)
19
38
(69)
5
(47)
32
(164)
(1)
242
(531)
$2,141
(0)
(1,950)
1,470
(112)
(6)
(675)
(26)
0
0
427
0
0
525
0
0
2,490
(2)
($25,462)
($100)
0
(100)
0
($25,104)
(13,014)
(10,660)
(1,430)

FV
Adjustedfor Marks/
FVMarks Reported
129
16,397
2,057
2,033
1,897
109
1,424
559
312
281
255
1,242
1,177
1,737
420
728
587
346
985
227
156
301
1,851
554
124
217
581
319
228
1,666
4,053
$65,048
254
16,255
30,151
747
436
6,849
226
594
323
(333)
211
221
1,514
169
106
6,936
390
$588,216
$7,816
547
6,705
564
$533,922
192,600
167,673
173,649

56.9%
15.9%
1.7%
0.8%
0.6%
4.9%
19.5%
0.9%
4.0%
9.6%
24.6%
4.1%
3.8%
3.7%
3.0%
9.4%
12.0%
26.8%
24.9%
12.9%
3.1%
6.9%
2.1%
11.0%
4.1%
17.9%
5.8%
33.9%
0.6%
17.0%
11.6%
3.4%
0.1%
10.7%
5.1%
13.0%
1.3%
9.0%
10.3%
0.0%
0.0%
56.2%
0.0%
0.0%
53.1%
0.0%
0.0%
56.0%
0.5%
4.1%
1.3%
0.0%
1.5%
0.0%
4.5%
6.3%
6.0%
0.8%

-16($inmillions)

SpecializedFinance
CAFirstNationalBancorp
CBOEHoldings
CMEGroup
EncoreCapitalGroup
GainCapitalHoldings
InteractiveBrokersGroup
Intercontinentalexchange
MarketaxessHoldings
MarlinBusinessServices
Moody's
MSCI
NasdaqOMXGroup
NewstarFinancial
NYSEEuronext
PHH
PortfolioRecoveryAssoc
PrimusGuaranty
Insurance
InsuranceBrokers
AON
ArthurJGallagher&Co
Brown&Brown
Crawford&Co
EHealth
Marsh&Mclennan
NationalFinancialPrtnrs
Life&HealthInsurance
Aflac
AmericanEquityInvtLife
Citizens
CNOFinancialGroup
DelphiFinancialGroup
FBLFinancialGroup
IndependenceHolding
KansasCityLifeIns
LincolnNational
Metlife
NationalWesternLife
PhoenixCompanies
PresidentialLife
Primerica
PrincipalFinancialGrp
ProtectiveLife
PrudentialFinancial
StancorpFinancialGroup
SymetraFinancial
Torchmark
UnumGroup
MultilineInsurance
AmericanFinancialGroup
AmericanInt'lGroup
AmericanNationalInsurance
Assurant
FortegraFinancial
GenworthFinancial
HartfordFinancialServices
HCCInsuranceHoldings

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported
550
0
0
63
0
0
0
0
0
2
32
5
7
1
39
71
331
0
$24,515
$178
77
12
0
0
0
89
0
$14,707
132
(258)
(1)
95
47
96
5
31
698
7,622
343
0
46
12
439
524
3,997
446
204
56
173
$6,457
9
4,471
609
113
0
370
669
2

*
*
*
*
*
*

*
*
*
*

*
*

146,749
469
319
35,652
763
491
30,640
31,041
321
469
2,777
3,014
14,224
1,929
13,855
8,820
1,353
611
$4,794,659
$55,101
30,573
4,594
2,525
824
188
15,540
858
$2,163,792
106,364
28,309
1,039
32,491
8,217
15,960
1,362
4,423
202,252
779,105
9,605
21,377
3,990
10,182
149,718
51,512
617,374
18,900
27,147
16,274
58,188
$1,237,843
34,062
621,269
23,056
26,893
558
112,717
318,138
9,477

0.4%
0.1%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.3%
1.2%
0.2%
0.0%
0.0%
0.3%
0.8%
32.4%
0.0%
0.5%
0.3%
0.3%
0.3%
0.0%
0.0%
0.0%
0.6%
0.0%
0.7%
0.1%
0.9%
0.1%
0.3%
0.6%
0.6%
0.4%
0.7%
0.3%
1.0%
3.7%
0.0%
1.2%
0.1%
0.3%
1.0%
0.7%
2.4%
0.8%
0.3%
0.3%
0.5%
0.0%
0.7%
2.7%
0.4%
0.0%
0.3%
0.2%
0.0%

NetFV
Marks
808
1
0
179
0
0
0
0
0
4
93
14
20
75
111
203
116
(6)
$30,973
$510
221
34
0
1
0
254
0
$10,431
241
(2,776)
(3)
184
135
(420)
3
(3)
931
8,594
(105)
(50)
131
33
(492)
158
2,897
345
419
160
49
$15,585
(198)
13,717
213
41
0
(107)
1,504
1

Equity:

Adjusted
FV
forFV Marks/
Marks Reported
100,271
277
92
14,795
426
325
26,055
27,954
28
310
2,854
1,814
9,077
1,443
6,427
7,354
579
462
$4,032,868
$36,693
22,252
3,413
952
693
19
8,925
440
$1,998,298
94,492
24,751
797
28,017
6,624
14,164
1,090
3,683
188,899
726,244
7,900
20,164
3,341
8,657
138,119
47,541
580,638
16,881
24,714
12,598
48,982
$1,061,379
29,230
525,310
18,956
21,944
430
96,682
297,298
6,206

0.8%
0.2%
0.0%
1.2%
0.0%
0.0%
0.0%
0.0%
0.0%
1.4%
3.4%
0.8%
0.2%
5.5%
1.8%
2.8%
25.0%
1.3%
0.8%
1.4%
1.0%
1.0%
0.0%
0.1%
0.0%
2.9%
0.0%
0.5%
0.3%
10.1%
0.4%
0.7%
2.1%
2.9%
0.3%
0.1%
0.5%
1.2%
1.3%
0.2%
4.1%
0.4%
0.4%
0.3%
0.5%
2.1%
1.7%
1.3%
0.1%
1.5%
0.7%
2.7%
1.1%
0.2%
0.0%
0.1%
0.5%
0.0%

NetFV
Marks
(258)
(0)
0
(116)
0
0
0
0
0
(3)
(60)
(9)
(13)
(75)
(72)
(132)
215
6
($6,458)
($331)
(144)
(22)
0
(1)
0
(165)
0
$4,276
(109)
2,519
2
(89)
(88)
516
2
34
(233)
(972)
448
50
(85)
(22)
931
366
1,100
101
(215)
(104)
123
($9,128)
207
(9,246)
396
72
0
477
(835)
2

FV
Adjustedfor Marks/
FVMarks Reported
46,478
193
227
20,857
337
166
4,586
3,087
293
159
(77)
1,200
5,147
487
7,428
1,466
774
149
$759,657
$18,408
8,321
1,181
1,573
131
169
6,615
418
$165,490
11,872
3,558
242
4,474
1,593
1,793
272
740
13,353
52,860
1,705
1,213
649
1,525
11,599
3,971
36,736
2,019
2,432
3,676
9,206
$175,907
4,832
95,959
4,100
4,948
127
16,035
20,284
3,271

0.6%
0.1%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
1.7%
362.6%
0.7%
0.3%
13.3%
1.0%
8.3%
38.5%
4.4%
0.8%
1.8%
1.7%
1.8%
0.0%
0.4%
0.0%
2.4%
0.0%
2.7%
0.9%
242.3%
0.8%
2.0%
5.2%
40.4%
0.6%
4.9%
1.7%
1.8%
35.7%
4.3%
11.6%
1.4%
8.7%
10.2%
3.1%
5.2%
8.1%
2.7%
1.4%
4.9%
4.5%
8.8%
10.7%
1.5%
0.0%
3.1%
4.0%
0.0%

-17($inmillions)

MultilineInsurance(contd)
HoraceMannEducators
Loews
Unitrin
Property&CasualtyInsurance
Ace
Alleghany
AlliedWorldAssurance
Allstate
AmericanSafetyInsHldg
Amerisafe
AmtrustFinancialServices
ArgoGroupIntlHoldings
AspenInsuranceHoldings
AssuredGuaranty
AxisCapitalHoldings
Baldwin&Lyons
Berkley(WR)
BerkshireHathaway**
Chubb
CincinnatiFinancial
CNAFinancial
DonegalGroup
EMCInsuranceGroup
EmployersHoldings
ErieIndemnity
FidelityNationalFinancial
FirstAmericanFinancial
FPICInsuranceGroup
GlobalIndemnity
HallmarkFinancialServices
HanoverInsuranceGroup
HarleysvilleGroup
HilltopHoldings
InfinityProperty&Cas
Markel
MBIA
MeadowbrookInsGroup
MercuryGeneral
NationalInterstate
NavigatorsGroup
OldRepublicIntl
OnebeaconInsuranceGroup
Proassurance
Progressive
RLI
SafetyInsuranceGroup
SeabrightHoldings
SelectiveINSGroup
StateAutoFinancial
StewartInformationServices
TowerGroup
Travelers
UnitedFire&Casualty
UniversalInsuranceHldgs
WhiteMtnsInsGroup
XLGroup
Reinsurance
AlterraCapitalHoldings
ArchCapitalGroup
EnduranceSpecialtyHoldings

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported

NetFV
Marks

4
194
15
$2,504
182
3
28
345
0
28
0
0
0
11
19
0
39
1,402
100
7
85
3
0
0
0
0
2
2
0
0
5
8
1
5
30
(231)
0
0
0
0
9
4
17
60
0
0
0
50
4
0
0
193
22
0
5
64
$669
56
8
7

(172)
544
43
$4,153
435
10
80
(232)
0
10 *
0
(79)
0
(451)
55
0
137
3,387
287
(16)
228
1 *
(1)
0
0
0
3
6
0
(1)
15
5
(0)
16
87
(928)
0
(0)
0
0
26
13
6
171
0
0
0
21
8
0
0
550
61
(3)
15
232
$293
28
22
20

*
*

*
*

*
*
*

*
*

7,212
76,263
8,197
$1,171,179
89,436
6,619
10,885
129,368
1,265
1,180
5,136
6,514
9,517
19,250
18,216
884
18,234
384,098
51,542
15,709
55,859
1,251
1,221
3,498
14,723
7,835
5,786
974
2,239
747
8,987
3,248
948
1,905
11,495
31,437
2,281
4,247
1,553
3,656
16,096
5,578
4,943
21,867
2,730
1,467
1,071
5,420
2,828
1,129
4,214
106,661
3,644
897
14,208
46,686
$166,744
10,553
17,221
8,767

0.1%
0.3%
0.2%
0.2%
0.2%
0.1%
0.3%
0.3%
0.0%
2.4%
0.0%
0.0%
0.0%
0.1%
0.1%
0.0%
0.2%
0.4%
0.2%
0.0%
0.2%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.1%
0.2%
0.1%
0.3%
0.3%
0.7%
0.0%
0.0%
0.0%
0.0%
0.1%
0.1%
0.3%
0.3%
0.0%
0.0%
0.0%
0.9%
0.1%
0.0%
0.0%
0.2%
0.6%
0.0%
0.0%
0.1%
0.4%
0.5%
0.0%
0.1%

Equity:

Adjusted
FV
forFV Marks/
Marks Reported
6,104
53,130
6,089
$817,223
65,576
3,596
7,893
109,998
941
825
4,262
4,886
6,412
14,838
12,919
538
14,412
219,299
35,938
10,629
44,189
866
857
2,999
8,341
4,303
3,759
710
1,295
527
6,511
2,463
306
1,248
8,203
28,835
1,708
2,401
1,222
2,838
12,141
4,415
2,966
15,629
1,866
820
730
4,290
2,157
673
3,110
82,010
2,978
735
10,002
36,154
$119,275
7,733
12,794
6,110

2.7%
1.0%
0.7%
0.5%
0.7%
0.3%
1.0%
0.2%
0.0%
1.2%
0.0%
1.6%
0.0%
2.9%
0.4%
0.0%
1.0%
1.6%
0.8%
0.1%
0.5%
0.1%
0.1%
0.0%
0.0%
0.0%
0.1%
0.8%
0.0%
0.1%
0.2%
0.2%
0.1%
1.3%
1.1%
3.1%
0.0%
0.0%
0.0%
0.0%
0.2%
0.3%
0.2%
1.1%
0.0%
0.0%
0.0%
0.5%
0.4%
0.0%
0.0%
0.7%
2.1%
0.4%
0.2%
0.6%
0.2%
0.4%
0.2%
0.3%

NetFV
Marks
176
(350)
(28)
($1,650)
(254)
(6)
(52)
577
0
18
0
79
0
461
(36)
0
(99)
(1,985)
(187)
23
(143)
2
1
0
0
0
(1)
(4)
0
1
(9)
3
1
(10)
(56)
697
0
0
0
0
(17)
(8)
11
(111)
0
0
0
29
(4)
0
0
(358)
(39)
3
(10)
(167)
$376
28
(14)
(13)

FV
Adjustedfor Marks/
FVMarks Reported
1,108
23,133
2,108
$353,460
23,860
3,023
2,992
19,370
328
355
874
1,627
3,105
4,411
4,797
345
3,821
164,799
15,604
5,080
11,670
385
364
499
6,382
3,532
2,027
263
943
220
2,476
784
643
657
3,292
2,602
573
1,846
330
818
3,955
1,163
1,977
6,238
864
646
341
1,130
671
456
1,104
24,651
666
161
4,206
10,531
$46,392
2,821
4,102
2,640

18.9%
1.5%
1.3%
0.5%
1.1%
0.2%
1.7%
3.1%
0.0%
5.3%
0.0%
5.1%
0.0%
11.7%
0.7%
0.0%
2.5%
1.2%
1.2%
0.4%
1.2%
0.5%
0.2%
0.0%
0.0%
0.0%
0.1%
1.4%
0.0%
0.3%
0.4%
0.3%
0.2%
1.5%
1.7%
36.6%
0.0%
0.0%
0.0%
0.0%
0.4%
0.7%
0.5%
1.7%
0.0%
0.0%
0.0%
2.6%
0.5%
0.0%
0.0%
1.4%
5.5%
2.1%
0.2%
1.6%
0.8%
1.0%
0.3%
0.5%

-18($inmillions)

Reinsurance(contd)
EnstarGroup
EverestReGroup
FlagstoneReinsuranceHld
GreenlightCapitalRe
MaidenHoldings
MontpelierReHoldings
Partnerre
PlatinumUnderwritersHldg
ReinsuranceGroupofAmerica
RenaissancereHoldings
TransatlanticHoldings
ValidusHoldings
Thrifts&MortgageFinance
AbingtonBancorp
AstoriaFinancial
BankMutual
Bankfinancial
Bankunited
BeneficialMutualBancorp
BerkshireHillsBancorp
BOFIHolding
BrooklineBancorp
CapitolFederalFinl
CharterFinancial
CliftonSavingsBancorp
DimeCommunityBancshares
DoralFinancial
ESBFinancial
ESSABancorp
FederalAgricultureMtgCp
FirstDefianceFinancialCp
FirstFinancialHoldings
FirstNiagaraFinancial
FirstPactrustBancorp
FlagstarBancorp
FlushingFinancial
FoxChaseBancorp
FranklinFinancial
HomeFederalBancorp
HudsonCityBancorp
KearnyFinancial
MeridianInterstateBancorp
MGICInvestment
NewYorkCmntyBancorp
NorthwestBancshares
OceanfirstFinancial
OcwenFinancial
OritaniFinancial
People'sUnitedFinl
PMIGroup
ProvidentFinancialServices
ProvidentNewYorkBancorp
RadianGroup
RockvilleFinancial
RomaFinancial
TerritorialBancorp

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported

NetFV
Marks

0
0
0
0
0
3
15
0
404
5
172
0
$6,898
4
533
(27)
8
242
(39)
6
32
50
205
(15)
33
142
(106)
27
21
146
16
42
48
12
(41)
121
5
4
5
2,510
21
26
0
821
343
23
1
110
451
0
204
23
23
16
26
52

0
(5)
(12)
0
0
8
42
0
(200)
13
378
0
$7,004
(1)
736
(56)
4
167
9
9
36
25
206
17
23
99
125
23
19
203
15
33
177
6
(35)
28
14
1
7
2,687
43
17
(54)
1,339
161
16
8
66
192
0
95
51
57
14
23
24

*
*

5,201
19,004
3,244
2,285
3,293
3,507
24,614
4,682
31,064
8,171
16,878
8,260
$359,018
1,181
17,653
2,496
1,671
11,088
4,674
3,231
1,693
3,165
9,938
976
1,169
4,235
7,910
1,995
1,115
10,591
2,061
3,344
30,937
894
12,622
4,444
1,093
1,254
1,340
54,289
2,902
1,950
8,270
41,423
8,430
2,262
2,290
2,679
25,773
4,014
7,083
2,943
6,951
1,763
1,917
1,540

0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.1%
0.0%
1.3%
0.1%
1.0%
0.0%
2.0%
0.4%
3.1%
1.1%
0.5%
2.2%
0.8%
0.2%
1.9%
1.6%
2.1%
1.5%
2.9%
3.5%
1.3%
1.4%
1.9%
1.4%
0.8%
1.3%
0.2%
1.3%
0.3%
2.8%
0.5%
0.3%
0.4%
4.8%
0.7%
1.3%
0.0%
2.0%
4.2%
1.0%
0.0%
4.3%
1.8%
0.0%
3.0%
0.8%
0.3%
0.9%
1.4%
3.5%

Equity:

Adjusted
FV
forFV Marks/
Marks Reported

NetFV
Marks

3,855
12,846
2,267
1,515
2,534
1,891
18,009
2,987
25,135
4,033
12,850
4,717
$313,183
960
16,577
2,198
1,416
9,537
4,098
2,789
1,560
2,635
8,013
871
982
3,844
7,277
1,812
951
10,128
1,792
3,023
27,074
727
11,453
3,946
893
1,121
1,144
49,578
2,447
1,722
6,703
36,381
7,021
2,042
1,341
1,993
20,321
3,824
6,036
2,550
5,856
1,429
1,699
1,290

0
5
12
0
0
(5)
(27)
0
604
(8)
(206)
0
($106)
5
(203)
29
4
75
(48)
(3)
(5)
26
(1)
(32)
10
43
(231)
5
2
(57)
1
10
(129)
6
(6)
93
(9)
3
(2)
(177)
(22)
9
54
(518)
182
7
(7)
44
258
0
109
(27)
(34)
2
3
28

0.0%
0.0%
0.5%
0.0%
0.0%
0.4%
0.2%
0.0%
0.8%
0.3%
3.0%
0.0%
2.3%
0.1%
4.6%
2.5%
0.3%
1.8%
0.2%
0.3%
2.4%
0.9%
2.6%
2.0%
2.4%
2.6%
1.8%
1.3%
2.1%
2.1%
0.8%
1.1%
0.7%
0.8%
0.3%
0.7%
1.6%
0.1%
0.6%
5.7%
1.8%
1.0%
0.8%
3.8%
2.3%
0.8%
0.6%
3.4%
1.0%
0.0%
1.6%
2.0%
1.0%
1.0%
1.4%
1.9%

FV
Adjustedfor Marks/
FVMarks Reported
1,346
6,158
976
770
760
1,465
6,569
1,696
5,929
3,588
4,028
3,543
$45,384
221
1,076
298
254
1,551
576
442
128
530
1,926
105
186
391
281
182
164
406
233
321
3,864
167
1,169
498
200
133
196
4,711
455
228
1,566
5,042
1,409
221
949
686
5,452
191
1,048
393
1,095
335
219
251

0.0%
0.1%
1.2%
0.0%
0.0%
0.3%
0.4%
0.0%
11.4%
0.2%
4.9%
0.0%
0.2%
2.3%
15.9%
10.9%
1.6%
5.1%
7.7%
0.7%
3.5%
5.1%
0.0%
23.2%
5.4%
12.5%
45.1%
2.6%
1.1%
12.4%
0.2%
3.1%
3.2%
3.8%
0.5%
22.9%
4.5%
2.4%
1.1%
3.6%
4.6%
4.0%
3.5%
9.3%
14.8%
3.4%
0.7%
6.9%
5.0%
0.0%
11.6%
6.5%
3.0%
0.7%
1.3%
12.7%

-19($inmillions)

Assets:

Liabilities:

FV
NetFV Adjustedfor Marks/
Marks
FVMarks Reported

NetFV
Marks

Equity:

Adjusted
FV
forFV Marks/
Marks Reported

NetFV
Marks

FV
Adjustedfor Marks/
FVMarks Reported

Thrifts&MortgageFinance(contd)

TFSFinancial
TrustcoBank
UnitedFinancialBancorp
ViewpointFinancialGroup
Walker&Dunlop
WashingtonFed
WestfieldFinancial
WSFSFinancial

50
89
36
33
0
547
5
16

10,935
4,159
1,646
2,997
681
13,936
1,245
4,167

0.5%
2.2%
2.2%
1.1%
0.0%
4.1%
0.4%
0.4%

* Net FV Mark due to estimated deferred tax calculation.

** R.G. Associates, Inc. holding. See note on back page.

154
34
19
(38)
0
229
8
(29)

9,286
3,835
1,401
2,519
535
11,780
1,028
3,746

1.7%
0.9%
1.4%
1.5%
0.0%
2.0%
0.8%
0.8%

(104)
55
17
71
0
319
(4)
45

1,649
324
245
478
146
2,156
217
421

5.9%
20.4%
7.6%
17.4%
0.0%
17.3%
1.6%
11.9%

R.G.Associates,Inc.
201N.CharlesStreet,Suite806
Baltimore,MD212014132
Phone:(443)9774370
Fax:(410)7832955
Internet:jciesielski@accountingobserver.com
Website:www.accountingobserver.com

NOTE:
R.G.Associates,Inc.isregisteredasaninvestmentadviserwiththeStateofMaryland.Noprincipalsoremployeesof
R.G.Associates,Inc.haveperformedauditingorreviewengagementprocedurestothefinancialstatementsofanyofthe
companiesmentionedinthereport.NeitherR.G.Associates,Inc.,noritsprincipalsandemployees,areengagedinthepractice
ofpublicaccountancynorhavetheyactedasindependentcertifiedpublicaccountantforanycompanywhichismentioned
herein.
Thesereportsarebasedonsourceswhicharebelievedtobereliable,includingpubliclyavailabledocumentsfiledwith
theSEC.However,noassuranceisprovidedthattheinformationiscompleteandaccuratenorisassuranceprovidedthatany
errorsdiscoveredlaterwillbecorrected.
Nothinginthisreportistobeinterpretedasabuyorsellrecommendation.Theinformationhereinisprovidedto
usersforassistanceinmakingtheirowninvestmentdecisions.
R.G.Associates,Inc.,itsclients,and/oritsprincipalsandemployeesthereofmayhavepositionsinsecuritiesreferred
tohereinandmaymakepurchasesorsalesthereofwhilethisreportisincirculation.Atthetimeofthisreport,thesecompanies
representholdingsofR.G.Associates,Inc.clientsormanagement:

3M
AbbottLabs
BadgerMeter
BectonDickinson
BemisCorporation
BerkshireHathaway

CampbellSoup
ColgatePalmolive
DaimlerAG
DonaldsonCo.,Inc.
ExxonMobil
Gannett

M&TBank
Manpower
McGrawHill
Microsoft
Mirant
NewellRubbermaid

Pepsico
PriceAssociates,(T.Rowe)
VFCorp.