It’s important to note that the auditor for a bank reaching the $500 million mark must meet more stringent SEC/PCAOB independence standards than the AICPA standards you may have been adhering to previously. Nonpublic banks must conduct an audit within 120 days, while public banks must conduct the audit within 90 days.
Once your bank crosses the $500 million mark as of the first date of its fiscal year, you’ll need to meet several new requirements and take the following actions: Requirements when reaching $500 million in assets Preparing for compliance with the requirements is a significant undertaking, and early and focused planning is key. Additionally, for banks managing capital ratios during periods of recession, the FDICIA thresholds are important guideposts to consider in your strategic planning since meeting the requirements can be resource-intensive. We recommend starting at least 18 to 24 months in advance. The requirements apply at the charter, not holding company or consolidated, level, and additional requirements come into play at the $1 billion mark. The FDICIA regulatory requirements go into effect when a bank reaches $500 million or more in asset size as of the first date of its fiscal year (January 1 for calendar-year-end companies). The COVID-19 pandemic and resulting economic fallout is likely to further increase consolidation and resulting asset levels for many institutions.
As a result, more and more community banks are approaching FDICIA thresholds for additional regulatory requirements. Increased mergers and acquisitions in the wake of the great recession have led to a decline in bank charters and growth in individual bank assets.