May 23, 2002
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: File No. S7-08-02 - Proposed Rule: Acceleration of Periodic Report Filing Dates and
Disclosures Concerning Website Access to Reports
Dear Mr. Katz:
Astoria Financial Corporation ("Astoria") appreciates the opportunity to comment on the Securities and Exchange Commission ("SEC") Proposed Rule: Acceleration of Periodic Report Filing Dates and Disclosures Concerning Website Access to Reports ("The Proposal"). Astoria Financial Corporation is a unitary savings and loan holding company for Astoria Federal Savings and Loan Association. We are a publicly traded thrift institution with assets of approximately $22 billion and operate 86 banking offices in the State of New York.
Astoria has been subject to SEC reporting requirements since its initial public offering in 1993. A great deal of time and effort is spent discussing, preparing and reviewing all aspects of our SEC filings, both internally as well as with our auditors and legal counsel. It is because of this thorough process that we follow, that we have serious concerns regarding the acceleration of the 10-K and 10-Q filing deadlines.
The following comments address certain questions regarding accelerating filing due dates:
We understand the reasoning behind the SEC's efforts to provide financial information to investors on a more timely basis. In fact, we issue quarterly earnings releases, generally the third week after a quarter end, and follow the earnings release with a conference call, which is simultaneously web cast. Our earnings releases are comprehensive and include complete statements of financial condition and income, as well as average balance sheets and selected financial ratios. Text disclosures highlighting significant changes between reporting periods are also included. In addition, we make presentations at various investor conferences and generally furnish the written text of those presentations to the SEC on Form 8-K. Accelerated filing periods would improve the flow and usefulness of financial information to investors and the marketplace and would complement our own efforts to do so.
While we agree with accelerating filing periods, we do not believe they can be effectively accomplished without reconsideration of the current filing requirements. Although filing deadlines have not changed in many years, the complexities of businesses along with the continual increases in required and recommended disclosures from the Financial Accounting Standards Board, as well as the SEC, have far surpassed the benefits achieved from improved technology. In fact, the SEC's recent proposal to expand disclosures relating to accounting policies ("Proposed Rule: Disclosure in Management's Discussion
and Analysis about the Application of Critical Accounting Policies") is counterproductive to accelerated filing deadlines as it would increase report preparation and review time. Inadequate timeframes for preparation and review of financial reports will inevitably lead to increased occurrence of errors, increased use of estimates and consolidation or elimination of disclosure, thereby reducing the usefulness of the reports.
We believe that an appropriate balance of relevant, quality and timely information along with reasonable preparation time should be the objective of The Proposal. Therefore, we propose an abbreviated 10-K as a compromise filing requirement under the proposed 60 day time period. Specifically, we believe that items 7, 7A and 8, the "heart" of the current 10-K filing, would fulfill the immediate needs of shareholders, creditors, regulators and potential investors. Many of the items in Part I and the remainder of Part II are secondary in nature and do not necessarily provide vital information to the reader, while much of Part III is typically referenced to the annual Proxy Statement. It is not our desire to eliminate these additional items, but to continue to subject them to the existing timeframes through a supplemental filing. This would provide the most relevant information to investors in a timely fashion while allowing management the appropriate time for report preparation.
The filing of an abbreviated 10-K on an accelerated basis would be more manageable for companies to implement. That is not to say that accelerated filing deadlines, in any form, will come without a cost to companies. At a minimum, companies will experience increased overtime costs, possibly requiring additional staff, and audit and legal fees will inevitably increase as a result of those firms requiring additional staff to handle the accelerated filing deadlines.
Finally, whether the final rule on accelerated filings is consistent with our recommendation or The Proposal as it is currently written, we believe that the selection of an appropriate transition period should be carefully considered. With the expectation that a final rule would not be available until late summer or early fall of 2002, companies would not have adequate time to evaluate their current processes and systems and test and implement the necessary changes for the fiscal reporting year ending December 31, 2002. Given the significant differences in the disclosure requirements of the 10-K versus the 10-Q, we feel it would be a more manageable transition to start with the first interim reporting period beginning after December 31, 2002. In addition, we feel that the accelerated filing deadlines should be implemented gradually (e.g. 75 days for the initial 10-K filing and 40 days for the initial 10-Q filing), thereby allowing companies adequate time to implement changes to their reporting process.
We appreciate the opportunity to comment on The Proposal and applaud the SEC's efforts to improve the timeliness and availability of financial information to investors while recognizing the need for companies to have sufficient time to generate quality reports.
s/ Monte N. Redman
Monte N. Redman
Executive Vice President and Chief Financial Officer