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Too Small to Succeed or Ownership Structure to Thrive?

April 4, 2016

Authors

Robert Klingler

Too Small to Succeed or Ownership Structure to Thrive?

April 4, 2016

by: Robert Klingler

Two recent federal banking agency reports show very different pictures of the banking environment for community banks.  In “Too Small to Succeed? – Community Banks in a New Regulatory Environment,” the Federal Reserve Bank of Dallas lays out the “apparent” rising regulatory burden confronting banks today.  In contract, “Financial Performance and Management Structure of Small, Closely Held Banks,” published in the FDIC Quarterly, provides an empirical analysis of the success of closely held community banks in the FDIC Kansas City, Dallas and Chicago regions.

Lots of Community Banks Remain

As a reminder (which often seems forgotten in these discussions), the U.S. banking industry is still full of community banks.  As of December 31, 2015 (the latest data available), there were 6,182 insured depository institutions in the United States (banks and thrifts, exclusive of credit unions).  Only 107 of those institutions had more than $10 billion in assets; 595

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Supervisory “Concerns” with Shareholder Protection Arrangements

February 9, 2016

Authors

Robert Klingler

Supervisory “Concerns” with Shareholder Protection Arrangements

February 9, 2016

by: Robert Klingler

In December 2015 (following years of sporadic and seemingly random criticism) of shareholder protection arrangements, the Board of Governors of the Federal Reserve System issued guidance that the Federal Reserve “may” object to a shareholder protection agreement based on the facts and circumstances and the features of the particular arrangement.  Federal Reserve Supervisory Letter SR 15-15 does not require submission of such arrangements to the Federal Reserve for comment prior to implementation, but rather directs institutions considering the implementation or modification of such arrangements to “review this guidance to help ensure that supervisory concerns are addressed.”

Supervisory Letter SR 15-15 casts a long shadow, with little clarity as to the line between acceptable and unacceptable arrangements. SR 15-15 cites a wide array of potentially objectionable shareholder protection arrangements, but then indicates that supervisory staff has “in some instances” found that these arrangements would “have negative implications on a holding company’s capital

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S Corp Banks Swing for the Fences, Settle for a Single

July 22, 2014

Authors

Jonathan Hightower

S Corp Banks Swing for the Fences, Settle for a Single

July 22, 2014

by: Jonathan Hightower

On July 21, 2014, the FDIC issued a Financial Institutions Letter (FIL) on the impact of the capital conservation buffer restrictions under Basel III on S Corporation banks.  The guidance essentially states that, even though Basel III restricts an S Corporation bank’s ability to pay tax distributions if it does not maintain the full capital conservation buffer, the FDIC will generally approve requests to pay tax distributions if no significant safety and soundness are present.  The succinct guidance probably raises more questions than answers.  Among those questions are the following.

  • Would a bank that does not meet the capital conservation buffer requirements ever really be 1 or 2 rated and experiencing no adverse trends?
  • Does the FDIC believe Obamacare and the related net investment income tax will be repealed?  What about state income taxes?  The factor limiting the dividend request to 40% may ignore what is actually
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2014 Subchapter S Bank Forum

April 25, 2014

Authors

Bryan Cave

2014 Subchapter S Bank Forum

April 25, 2014

by: Bryan Cave

Join Bryan Cave LLP and Porter Keadle Moore on Tuesday, May 20 for the 2014 Subchapter S Bank Forum as we discuss how community banks can make the most of the tax benefits associated with S Corporation status. With all of the added pressure on today’s community banks, we will discuss how to deliver results to your shareholders as a high performing independent bank using an S Corporation structure. We hope to see you there!

Click HERE to register.

DATE: Tuesday, May 20, 2014 – Registration at 8:15 a.m.

LOCATION: Bryan Cave Atlanta Office 1201 West Peachtree Street, NW | One Atlantic Center Fourteenth Floor | Atlanta, GA 30309

COST: $125 per person | $75 for each additional person from same institution

CPE: Earn 6 hours of CPE (4 General and 2 Tax)

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