May 22, 2002
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Subject: File No. S7-08-02
Dear Mr. Katz:
Provident Financial Group, Inc. ("Provident") is a bank holding company subject to the regulations of the Board of Governors of the Federal Reserve System. It's subsidiary bank, The Provident Bank ("Bank"), is an Ohio state-chartered member bank of the Federal Reserve System and its subsidiaries are subject to supervision and examination by applicable federal and state banking agencies, including the Federal Reserve, Federal Deposit Insurance Corporation and The Ohio Division of Financial Institutions.
While Provident is certainly aware of how critical access to timely and accurate information can be to the efficient functioning of the capital markets, it does have concerns as to whether this will be accomplished by the acceleration of the current due dates for Form 10-K and Form 10-Q filings.
The volume of disclosures, both those that are required and those that Provident voluntarily provides for additional clarity, is significant. This is true for many publicly traded companies. The data gathering and associated MD&A require a significant amount of preparation and review time. Disclosures are not static, particularly in the fluid environment of changing risk perceptions and investor demand for reporting transparency. Banking institutions are particularly effected by current disclosure requirements and filing deadlines as they must balance this with other regulatory reporting requirements, such as the quarterly Call Report. This comprehensive report must be filed with all applicable bank regulatory agencies no later than 30 days after the end of the quarter. While not intentional, we believe the different reporting deadlines for the Call Report and the Form 10-Q facilitates more accurate and complete reporting for Form 10-Q. Typically the same staff compiles both reports and therefore the workload is more balanced. Provident, as most banking companies, will need to allocate additional, technically qualified staff to meet the new deadlines if the dates coincide.
The completion of Form 10-K and Form 10-Q, while time consuming, is not the end product. Recent audit and corporate governance guidelines either require or strongly suggest a pre-filing review of the Form 10-K and Form 10-Q by the independent certified public accountant and the Audit Committee of the Board of Directors. While this review results in more reliable financial statement presentation, additional management review by the Board of Directors and increased knowledge by the Board, it does add time to the total filing process. The coordination and scheduling of these review activities, including the necessary time for Q & A, is already difficult. A shorter filing deadline will only magnify this problem.
While Provident believes no change in the current reporting deadline requirements for Form 10-K and Form 10-Q is necessary, a gradual reduction in the deadlines could make any change more manageable. A reduction in the Form 10-K filing deadline from 90 days to 75 days, with no change in the current 45-day requirement for Form 10-Q, would capture much of the SEC's goals. Changes related to the close process, Board of Directors/Audit Committee education, scheduling of independent certified public accountants and additional resource requirements could then be handled in a more orderly fashion.
We agree with the agency's position regarding web-site access to information. Provident's corporate web-site provides links to the SEC web-site and easy access to all its filings. This is a process Provident adopted approximately four years ago and has consistently communicated to its investors. While the documentation, development and review of clear and credible financial information remains complicated, the delivery of that information is virtually instantaneous via the Internet.
The goal of providing full and fair disclosure to the capital markets is one that should be continually pursued by companies and regulatory agencies alike. We appreciate the opportunity to participate in this process and comment on these proposals.
Anthony M. Stollings
SVP and Controller