The Federal Deposit Insurance Corp. said some US banks incorrectly reported the amount of their uninsured deposits after dozens of lenders restated the figures amid increased scrutiny of such funds.
In recent months, 55 banks revised the deposit data disclosed in a regulatory filing known as a call report, according to an analysis by S&P Global Market Intelligence. In some cases, the banks no longer included certain uninsured deposits that were collateralized by pledged assets as well as those held by bank subsidiaries, the FDIC found.
“This is incorrect because in and of itself, the existence of collateral has no bearing on the portion of a deposit that is covered by federal deposit insurance,” the FDIC said Monday in a letter on its website.
After the collapse of Silicon Valley Bank and Signature Bank in March, investors began scrutinizing lenders with the biggest share of uninsured deposits. Because such funds aren’t protected by the FDIC, depositors are more likely to withdraw in a crisis.
If a bank incorrectly restated the amount of uninsured deposits they have on their balance sheet, the agency said it’s incumbent on the firm’s chief financial officer or an executive performing a similar function to submit additional revisions.
Bank of America Corp. updated its level of uninsured deposits by the largest dollar amount, according to S&P Global, while Huntington Bancshares Inc. restated it by the largest percentage decline.
“Earlier this year, we identified certain internal or intra-bank accounts that shouldn’t have been reported,” Bank of America spokesman Bill Halldin said in a statement. The company doesn’t plan to restate the figures again following the FDIC’s letter to lenders.
A spokesperson for Columbus, Ohio-based Huntington said 71% of the bank’s deposits are insured, a level “well above” the peer median.
“Huntington has one of the strongest and most diversified deposit bases in the industry,” the spokesperson said.
(Updates with comment from Huntington in final two paragraphs.)
