<![CDATA[MBAF - Bank Advisories]]> <![CDATA[Financial Services Advisory - CEOs See Examiners Expanding Their Focus Beyond Real Estate]]>
Frank Gonzalez

Banks can expect that examiners from national and state regulatory agencies will put a major focus on operational risk, as well as on asset quality, during their next regularly scheduled examinations, according to the participants in a CEO Panel on January 18.

Panelists at the South Florida Banking Institute event in Miami were: Simon Cruz, President of Intercredit Bank; Guillermo Diaz-Rousselot, President and COO of Continental National Bank of Miami; Jorge Gonzalez, President and CEO of City National Bank; and Raul G. Valdes-Fauli, President and CEO of Professional Bank.

They provided general observations based on recent examinations of their banks and on information they have heard from other bankers.

Here are some details of what they are seeing in examinations and in other trends in banking:

  • Reviews of real estate loan portfolios and of allowances for loan losses remain the biggest focus in most examinations. Compared with most recent examinations, some examiners are "drilling down" and reviewing more loans.
  • Examiners can be expected to put added focus on reviews of operations - including management, as well as information technology and compliance.
  • Amid historic low interest rates and questions about whether that will continue, examiners are looking closely at banks' interest rate sensitivity. Banks will need to be sure that they can validate their models for withstanding changes in interest rate environments.
  • Bankers are expecting that growth in profits and loans will remain relatively low for at least several years. An important task is to make sure that directors and shareholders understand why returns will not be as high as in years prior to the recession.

If you would like additional information on the recent CEO panel or on regulatory issues that are impacting banks, do not hesitate to contact our Financial Institutions specialists or call us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - Florida Banks Aggregate Profit Grows But Problem Loans Remain High]]>
Frank Gonzalez

The Florida banking industry continued its trend of moderate increases in aggregate profits during this year's third quarter. But the noncurrent loan ratios for Florida-based banks were still significantly higher than the national averages and the averages for banks based in New York State, according to data the Federal Deposit Insurance Corporation released on November 22.

In its Quarterly Banking Profile and related data base, the FDIC reported that the 233 Florida-based banks had aggregate net income of $86 million during the quarter ended September 30, 2011.

That was the third consecutive profitable quarter for the Florida industry, and follows its aggregate net income of $58 million in this year's second quarter. Florida-based banks had an aggregate loss of $246 million in 2010's third quarter.

The year-over-year improvement was attributable partly to a decline in additions to loan loss reserves, Florida-based banks added $307 million to their reserves during this year's third quarter, compared with $635 million in 2010's third quarter.

However, the Florida industry's overall noncurrent loan ratio fell only from 7.53 percent on September 30, 2010 to 7.06 percent on September 30, 2011.

Highlights from the new reports include:

  • The country's banking industry increased its net income from $23.8 billion in 2010's third quarter to $35.3 billion in this year's third quarter. Provisions for loan losses fell from $35.1 billion in last year's third quarter to $18.6 billion in this year's third quarter.
  • At banks based in New York State, net income increased from $1.4 billion in last year's third quarter to $1.7 billion in this year's third quarter. Provisions to loan loss reserves declined from $420 million to $197 million for those quarters.
  • On September 30, 2011, overall noncurrent loan ratios were 4.22 percent for the national banking industry and 2.50 percent for New York-based banks.

The noncurrent ratios for real estate loans were 6.50 percent for all banks, 8.11 percent for Florida-based banks and 3.40 percent for New York-based banks.

In a news release, the FDIC said the number of banks on its "Problem List" fell from 865 to 844 during the three months ended September 30, 2011. That was the second consecutive quarter with a reduction in the number of problem banks.

The FDIC does not identify those banks, which have CAMELs ratings of 4 or 5--the two lowest under that system.

If you would like additional information on the FDIC data for September, 2011, do not hesitate to contact our Financial Institutions specialists, or call us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - Panel Points to Dodd Frank and TDRs as Major 2012 Issues]]>
Frank Gonzalez

Compliance with the Dodd-Frank Act and accounting for Troubled Debt Restructurings (TDRs) will be among important issues for banks late this year and in 2012, according to bank executives and accountants who participated in a panel discussion on September 21.

The South Florida Banking Institute sponsored the Bank Accounting Update in Miami. Frank Gonzalez, a principal in the Audit Department at MBAF-ERE and head of the firm's Financial Institutions and SEC practices, was the moderator. He is President of the South Florida Banking Institute for 2011-2012.

Topics discussed included:

  • All banks during the next two years will need to comply with a series of rules, including higher capital ratios, that regulators have issued or will issue under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

    It is anticipated that added costs and time for compliance could lead some banks to seek new investors or an acquisition. Private equity firms can be expected to show selected interest in those transactions with Florida banks.
  • All foreign banks' agencies and branches must comply with the Dodd-Frank systemic risk rules, which for U.S. banks apply only to holding companies with $50 billion or more in assets.

    Requirements include periodically providing a so-called "living will" to the Federal Reserve, with the company's plan for rapid and orderly resolution in the event of material financial distress or failure. Some foreign bank offices in Florida have limited resources, even with the support of parent banks, and could find it costly and difficult to prepare required information.
  • Because the numbers of impaired loans likely will remain high, some bankers in 2012 will continue to have questions about when restructurings should be accounted for as TDRs.

An Accounting Standards Update (ASU) that the Financial Accounting Standards Board (FASB) issued in April 2011 provides clarity, including determination of when a concession on the interest rate or other terms of a loan requires treatment as a TDR.

If you would like additional information on the topics discussed at the South Florida Banking Institute meeting or on other accounting issues for banks, do not hesitate to contact our Financial Institutions specialists or call us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - Florida Banks Post Largest Profit in Four Years but Problem Loans Remain High]]>
Frank Gonzalez

During this year's second quarter, banks based in Florida had their largest aggregate profit since the third quarter of 2007 according to data theFederal Deposit Insurance Corporation released on August 23, 2011.

In its Quarterly Banking Profile and related data base, the FDIC reported that the 238 Florida-based banks had combined net income of $65.6 million during the quarter ended June 30, 2011. That was the best performance for the Florida banking industry since the quarter ended September 30, 2007, when it had net income of $171.2 million.

The profit in this year's second quarter was a significant improvement over 2010's second quarter, when 265 Florida banks had an aggregate loss of $406.5 million. The result was largely attributable to a decline in the addition to loan loss reserves–from $539.7 million in last year's second quarter to $232.2 million in this year's second quarter.

But the Florida industry continued to have large levels of problem loans, and it lagged the industry nationally and in New York State in profitability.

Highlights from the new reports include:

  • The country's banking industry increased its net income from $20.9 billion in last year's second quarter to $28.8 billion in 2011's second quarter. The quarterly provisions for loan loss reserves declined from $40.4 billion to $19.0 billion during that measuring period.
  • At banks based in New York State, net income grew from $1.5 billion in 2010's second quarter to $1.7 billion in this year's second quarter. The quarterly provisions for reserves declined from $710 million to $296 million during the measuring period.
  • Comparing June 30, 2010 with June 30, 2011, non-performing loan ratios had these declines: 7.40 percent to 7.21 percent for Florida-based banks; 3.04 percent to 2.55 percent for New York-based banks; 5.23 percent to 4.37 percent for the national banking industry.

In a news release the FDIC said the number of banks on its "Problem List" declined from 888 to 865 during the three months ended June 30, 2011. That was the first decline in the number of problem banks since the third quarter of 2006.

The FDIC does not identify those banks, which have CAMELs ratings of 4 or 5--the two lowest under that system.

If you would like additional information on the FDIC data for June 30, 2011, do not hesitate to contact our Financial Institutions specialists, or call us at 1-800-239-1474

]]> <![CDATA[Financial Institutions Services Advisory - FASB Issues ASU on Presentation of Comprehensive Income]]>
Yvette Garcia

The Financial Accounting Standards Board (FASB) on June 16 issued an Accounting Standards Update (ASU) that is aimed at improving the presentation of comprehensive income and increases the prominence of other comprehensive income in financial statements.

Accounting Standards Update (ASU) No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income will supersede some of the guidance in Topic 220 of the accounting Codification. It is applicable to public entities and nonpublic entities.

In a news release, the FASB said that the main provisions of the ASU provide that an entity that reports items of other comprehensive income has the option to present comprehensive income in either a single statement or in two consecutive statements:

  • A single statement must present the components of net income and total net income, the components of other comprehensive income and total other comprehensive income and a total for comprehensive income.
  • A two-statement approach must present the components of net income and total net income in the first statement. That statement must be immediately followed by a statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income.

The amendments in the ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, they are effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. Early adoption is permitted.

If you would like additional information on ASU 2011-05 on the presentation of comprehensive income do not hesitate to contact us at 1-888-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - FinCEN Extends FBAR Deadline]]>
Raul Incera

The Financial Crimes Enforcement Network (FinCEN) has given what it calls "a small subset of individuals" who have only signature authority a 12-month extension, until June 30, 2012, to file their Report of Foreign Bank and Financial Accounts (FBARs) to the IRS for 2011.

In a notice that it issued with the IRS on May 31, the FinCEN extended the deadline for filing Form TDF 90-22-1 (FBAR) for the following individuals:

  • An employee or officer of a covered entity who has signature or other authority over and no financial interest in a foreign financial account of another entity more than 50 percent owned, directly or indirectly, by the entity (a "controlled person").
  • An employee or officer of a controlled person of a covered entity who has signature or other authority over and no financial interest in a foreign financial account of the entity or another controlled person of the entity.

All other U.S. persons required to file an FBAR this year are required to meet the June 30, 2011, filing date. Unlike with federal income tax returns, extensions of time to file are not available.

For FBAR purposes, a covered entity is any U.S, person. That includes a citizen or resident of the United States, a domestic partnership, a domestic corporation, a domestic estate or trust.

U.S. persons are required to file FBARs annually if they have a financial interest in or signature authority over financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

If you would like additional information on the requirements for filing Foreign Bank and Financial Reports (FBARs), do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - FDIC Report Shows Florida Banking Industry Regains Profitability]]>
Frank Gonzalez

Banks based in Florida had aggregate net income of $18.0 million in this year’s first quarter, for their first profit since the first quarter of 2008, according to data the Federal Deposit Insurance Corporation released on May 24.

In its Quarterly Banking Profile, the FDIC also reported that the country’s banking industry increased its net income by 67 percent from $17.4 billion in 2010’s first quarter to $29.0 billion during 2011’s first quarter.Banks based in New York State increased their aggregate net income 1.9 percent from $1.49 billion in 2010’s first quarter to $1.52 billion in 2011’s first quarter.

The overall improved results were attributable partly to lower provisions to loan loss reserves.Non-current loan ratios also improved nationally, in Florida and in New York.

Highlights from the new reports include:

  • Florida-based banks improved from an aggregate loss of $140.2 million in 2010’s first quarter to a profit of $18.0 million in this year’s first quarter. The bottom line improved partly because loan loss provisions fell from $591 million to $313 million.
  • At Florida-based banks, the non-current loan ratio declined from 7.72 percent on March 31, 2010 to 7.13 percent on March 31, 2011.The ratio remained higher than national numbers because of ongoing real estate problems in Florida.
  • The national non-current loan ratio fell from 5.46 percent on March 31, 2010 to 4.71 percent on March 31, 2010.
  • At New York-based banks, the non-current loan ratio declined from 3.36 percent on March 31, 2010 to 2.64 percent on March 31, 2011.

In a news release, the FDIC said the number of banks on its “Problem List” grew from 884 to 888 during the three months ended March 31, 2011.The FDIC does not identify those banks, which have CAMELs ratings of 4 or 5--the two lowest under that system.

If you would like additional information on the FDIC reports for 2011’s first quarter, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - FASB Issues Accounting Standards Update on Repurchase Agreements]]>
Frank Gonzalez
Steven Morrison

The Financial Accounting Standards Board (FASB) on April 29 issued an Accounting Standards Update (ASU) that indicates it is intended to improve financial reporting of repurchase agreements, also known as "repos," and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.

In a major change, the ASU provides a new determination of when an entity may or may not recognize such agreements as sales. Typically, in a repo transaction, an entity will transfer financial assets to a counterparty in exchange for cash with an agreement for that counterparty to return the same or equivalent financial assets for a fixed price in the future.

In a news release the FASB noted that under Generally Accepted Accounting Principles the determination of when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements has been based, in part, on whether the entity has maintained effective control over the transferred financial assets.

The new ASU removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as the collateral maintenance implementation guidance related to that criterion.

The amendments in the ASU are effective for the first interim or annual period beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted.

If you would like additional information on the FASB’s Accounting Standards Update on repurchase agreements, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - Regulators Advise Banks to be Diligent on Outsourcing of BSA Compliance]]>
Frank Gonzalez

During a panel discussion in Miami on April 20, officials of federal and state banking and financial regulatory agencies said that one of their major concerns is the performance of some third-party firms to which banks outsource Bank Secrecy Act compliance responsibilities.

The South Florida Banking Institute sponsored the meeting. Panelists were Ron Lindhart of the South Florida Region of the Office of the Comptroller of the Currency; Jay Repine of the Miami branch of the Federal Reserve Bank of Atlanta; Elena Burca, of the Florida Office of Financial Regulation; and Charles Bishop of the Office of Foreign Assets Control.

Lindhart said the OCC is finding some instances where there are problems with the details of and the number of BSA-related transactions tested by outsourcing firms.

Repine, Burca and Lindhart said banks should have specific agreements with outsourcing firms on their volume of work and should carefully review their qualifications.

"You are responsible for what they do," Lindhart said. "You get what you pay for."

The Florida Office of Financial Regulation encourages outsourcing of BSA compliance for some smaller banks that do not have resources to do it in-house, Burca said.

"But you need details on expectations from the start," she said.

Lindhart said the OCC also is concerned that some banks still might not have sufficient loan loss reserves and that others might be acting prematurely in recovery of reserves.

If you would like additional information regarding compliance with the Bank Secrecy Act and other banking laws, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - New IRS Guidance on Reporting of Employer Health Coverage]]>
Frank Gonzalez

As part of the health reform law passed last year, employers were required to provide information to employees about the value of their health care coverage fringe benefits. The IRS issued guidance last year delaying the implementation date to give employers more time to make the changes necessary for their payroll systems. Now, the IRS has issued guidance that provides further relief for small employers (those who issue less than 250 W 2s for this year).

Click here to read full article.

If you have any questions on these matters and wish to speak to an advisor, please contact us at 1-800-239-1474.

]]> <![CDATA[Financial Institutions Services Advisory - FASB Issues Accounting Standards Update on Determining TDRs]]>
Frank Gonzalez
Jaime Boone

The Financial Accounting Standards Board (FASB) on April 5 issued an Accounting Standards Update that provides clarification on which loan modifications meet the criteria to be treated as Troubled Debt Restructurings (TDRs).

In a news release the FASB said that Accounting Standards Update (ASU) No. 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring "will improve financial reporting by creating greater consistency in the way GAAP is applied for various types of debt restructurings."

The ASU states that in evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist:

  • The restructuring constitutes a concession.
  • The debtor is experiencing financial difficulties.

The ASU includes the criteria that creditors should use in making those determinations.

The FASB said it issued the ASU that reaffirms the requirements because increases in loan modifications, caused by the recent economic downturn, led investors, regulators and accountants to ask the FASB to clarify what types of modifications should be considered TDRs for accounting and disclosure purposes.

For public companies, the guidance is effective for interim and/or annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. For nonpublic entities, the amendments are effective for annual periods ending on or after December 15, 2012, including interim periods within that annual period. Early application is permitted.

If you would like additional information on the FASB Accounting Standards Update on TDRs, do not hesitate to contact us at (305) 373-5500.

]]> <![CDATA[Financial Institutions Services Advisory - At FBA Meeting, Regulators Note Lower Levels of Problem Loans]]>
Frank Gonzalez

During a panel discussion in Miami on March 31, officials of federal banking regulatory agencies and of the Florida Office of Financial Regulation (OFR) said they are seeing improvement in the levels of non-performing and of non-accrual loans at Florida banks.

The Florida Bankers Association (FBA) sponsored the Regulators Town Hall Meeting. Panelists were from the Federal Deposit insurance Corporation, the Office of Thrift Supervision, the Federal Reserve Bank of Atlanta, the Office of the Comptroller of the Currency and the Florida OFR.

Consensus comments included:

  • Overall CAMELs ratings for safety and soundness are improving slightly.
  • Other real estate owned (OREOs) are starting to sell at or above book value.
  • Margins are improving.
  • The number of capital injections into banks is increasing.
  • They are focusing on compliance with the Bank Secrecy Act (BSA) and other anti-money laundering laws.

Linda Charity of the Florida OFR said that agency is working on three main projects:

  • Strengthening its management and examination teams.
  • Recommending new regulations that include: helping undercapitalized banks recapitalize; seeking the ability to appoint directors and/or officers at troubled institutions; addressing issues related to the 2010 Dodd-Frank Act.
  • Improving and enhancing its flexibility in the Bank Examination Process.

Elizabeth Ferrades of the OCC said her agency’s focus includes:

  • Asset Quality - especially in income-producing properties and construction loans.
  • Recommending that institutions perform stress tests.
  • Closely monitoring institutions that are entering new product lines and the risks involved. One example is U.S. Small Business Administration (SBA) lending.
  • The need for management to concentrate on strategic planning.

If you would like additional information on issues that regulators discussed at the Florida Bankers Association meeting, do not hesitate to contact us at (305) 373-5500.

]]> <![CDATA[Financial Institutions Services Advisory - At FIBA Event, FinCEN Notes Release of New Rule on Filing of FBARs]]>
Frank Gonzalez

During the Florida International Bankers Association's (FIBA) 11th annual Anti-Money Laundering Conference in Miami, Jamal el-Hindi, Associate Director of the Financial Crimes Enforcement Network (FinCEN) on February 24 announced that FinCEN issued a rule that changes some requirements for clients of financial institutions in filing a Report of Foreign Bank and Financial Accounts (FBAR).

In general, an FBAR must be filed by any U.S. taxpayer who has a financial interest in or signature authority or other authority over any financial account in a foreign country if the aggregate value of those accounts exceeds $10,000 in a calendar year. The new rule clarifies some definitions of signature authority and clarifies the treatment of custodial accounts in filing of FBARs.

Debra Novak, chief of the Anti-Money Laundering Section of the Federal Deposit Insurance Corporation, noted that on February 23 the FDIC and other federal bank regulators released a Spanish Translation of the 2010 Bank Secrecy Act/Anti-Money Laundering Examination Manual to assist the bank's Spanish-speaking employees in administering AML programs but that examiners will continue to use the English language version "as the working manual" in examinations.

Novak also said that during examinations the FDIC is finding a growing number of "due diligence issues" with banks regarding BSA compliance, including not getting all required information when an account is opened; insufficient follow-up on account activity; and a bank identifying an account as "moderate risk" and an examiner later identifying it as "high risk."

John Wagner, director of BSA/AML Compliance for the Office of the Comptroller of the Currency said his agency also is finding more "resources issues” including finding situations where they determine a bank should have filed a Suspicious Activity Report (SAR) but did not. Under the U.S. Bank Secrecy Act, banks must file a SAR with their regulator when they detect a known or suspected violation of federal laws or regulations or a suspected action related to money laundering, terrorist financing or other criminal activity.

MBAF is a supporting member of FIBA and many of our bank clients are members of FIBA.

If you would like additional information on AML-related issues, do not hesitate to contact us at (305) 373-5500.

]]> <![CDATA[Financial Institutions Services Advisory - FDIC Report Shows National Profit but Aggregate Loss for Florida Banks in 2010]]>
Frank Gonzalez

The U.S. banking industry returned to annual profitability in 2010 but banks based in Florida had an aggregate net loss for the third consecutive year, according to the Quarterly Banking Profile that the Federal Deposit Insurance Corporation released on February 23.

The report from the FDIC contains additional data that indicate how the recovery from the real estate crisis is progressing more slowly for Florida-based banks than for the industry in general.

Nationally, the banking industry had full-year net income of $87.5 billion in 2010. That followed a net loss of $10.6 billion in 2009. The national industry had net income of $21.7 billion for 2010's fourth quarter, compared with a net loss of $1.8 billion in 2009's fourth quarter.

In a news release, the FDIC attributed the improved fourth quarter national results to a decline in loan loss provisions, increased net operating revenue and an increase in realized gains from securities.

Florida-based banks had an aggregate full-year 2010 loss of approximately $1.1 billion. That provides some encouragement, because it was 49 percent lower than the aggregate full-year 2009 loss of approximately $2.2 billion.

Florida-based banks had an aggregate loss of $540 million in last year's fourth quarter compared with a loss of $911 million in 2009's fourth quarter.

During 2010, the percentages of loans that are non-current declined for the national industry and for Florida banks.

Nationally, the non-current rate for all loans fell from 5.44 percent at the end of 2009 to 4.89 percent at the end of 2010.

Numbers for the Florida industry that indicate an improving trend include:

  • Provisions for loan losses were $2.2 billion in 2010, a 42 percent decline from provisions of $3.7 billion in 2009.
  • The overall rate of non-current loans fell from 7.82 percent at the end of 2009 to 7.18 percent at the end of 2010.
  • The non-current rate for all real estate loans declined from 8.78 percent at the end of 2009 to 8.21 percent at the end of 2010.

However, Florida-based banks' non-current rate for construction and development loans became even higher–from 21.24 percent at the end of 2009 to 23.76 percent at the end of 2010.

If you would like additional information on the FDIC's report on the banking industry's 2010 results, do not hesitate to contact us at (305) 373-5500.

]]> <![CDATA[Financial Institutions Services Advisory - FDIC Changes to Asset-Based System for Deposit Insurance Assessment ]]>
Frank Gonzalez

The Federal Deposit Insurance Corporation on February 7 issued a final rule that changes its assessment system for deposit insurance coverage from one based on domestic deposits to one based on consolidated total assets.

That change will become effective on April 1, 2011 and will be based on banks' asset balances staring with the quarter ending June 30, 2011.

The FDIC's deposit insurance assessment has long been based on a bank's average total domestic deposits during each quarter. Under the change, the assessment will be based on the average consolidated total assets of a bank minus its average tangible equity during each quarter.

For banks with $1 billion or more in assets, the assessment will be on the average balances of assets at the close of each business day. Banks with less than $1 billion in assets can use that system or the average balances at the close of business each Wednesday.

Page 5 of the new rule lists the initial assessment rates for most banks with less than $10 billion in assets.

Last year's Dodd-Frank Wall Street Reform and Consumer Protection Act required the FDIC to change to an asset-based insurance system. Many members of Congress viewed it as a means to shift part of the cost of deposit insurance from small and mid-sized banks that rely heavily on deposits for funding to large banks that often have multiple sources of funding.

In a February 7 news release, FDIC Chairman Sheila Bair said the FDIC expects that its new rule "should keep the overall amount collected from the industry very close to unchanged, although the amounts that individual institutions pay will be different."

Insurance premiums could rise for some larger banks because the February 7 rule revises the deposit insurance assessment system for "large institutions," which the FDIC generally defines as those with at least $10 billion in assets. The rule establishes what the FDIC calls "scorecards" that base the assessments for those banks on what it regards as financial measures that are predictive of long-term performance.

If you would like additional information on the FDIC's change to an asset-based system for deposit insurance assessment, do not hesitate to contact us at (305) 373-5500.

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