[This study examines thrifts' supplemental disclosures with respect to default risk (scheduled items) and interest rate risk (repricing data). It represents an extension of a recent study (Beaver, Eger, Ryan, and Wolfson 1989; hereafter BERW), which also examines the relationship between banks' share prices and supplemental disclosures with respect to default risk (nonperforming loans) and interest rate risk (maturity data). However, there are differences between the research designs and the findings of the studies. The research design differences between the bank and thrift studies include: (1) the use of per share deflation instead of book value deflation; (2) the use of seemingly unrelated regressions (SUR), as well as a fixed-effects model; and (3) a partitioning of the sample according to availability of supplemental data to assess the impact of nondisclosure on the estimated coefficients. A sample of 165 publicly traded thrifts was used to regress market values on several variables, including supplemental disclosures. The findings differ from those of the bank study in several respects. First, the coefficient on the supplemental disclosure on interest rate risk is significant in the case of the banks but not in the case of thrifts. Second, the coefficient on the default risk variable is smaller for thrifts than for banks. Third, the following three additional findings extend the bank study. (1) Thrifts that do not disclose the default risk variable appear to be valued at a discount relative to disclosing thrifts. (2) The estimated effects of the incremental explanatory power of the default risk variable is robust with respect to two nonnested estimation methods, a fixed effects model, and a seemingly unrelated regression. (3) The finding regarding scheduled items is robust with respect to an alternative specification, which assesses differences in estimated coefficients for "good" loans versus "bad" loans.]

The price-earnings relation can be characterized as a system of simultaneous equations. Earnings and prices can behave as if they are both endogenously determined because they are jointly affected by information that is difficult to specify explicitly. Specification tests provide evidence that both earnings changes and price changes are endogenous. The price and earnings coefficients increase from OLS to joint estimation and, under a restrictive set of assumptions, provide increasingly similar estimates of the permanent component of earnings. The evidence is consistent with the contention that a portion of the single-equation bias can be mitigated via joint estimation.

The voluntary use of regulatory accounting principles (RAP) by Savings and Loans (S&Ls) is predicted to be related to ownership structure, proximity to violation of net worth requirements, political factors, and prior use of RAP. We examine the decisions to both adopt and retain the use of several RAP: two ‘cosmetic’ RAP that are relatively independent of other economic decisions and two ‘noncosmetic’ RAP that directly interact with investment or financing decisions. S&Ls using RAP tend to: (a) be mutuals, (b) have low regulatory net worth, (c) be larger (for S&Ls adopting RAP), and (d) have used other RAP in the prior period.