Pub. 3 2013-2014 Issue 6

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S May• June 2014 17 ted to apply accounting alternatives in its standalone financial statements that are not included in the SEC filing. The question for management to consider is whether it’s worth the time and expense tomaintain two sets of books; inmost cases, the answer would be “no.” Additional Considerations for Financial Institutions FDICIA Banks with total assets in excess of $500 million are subject to the regulatory reporting requirements of the Federal Deposit Insurance Corporation Improvement Act (FDICIA). This entails filing annual audited U.S. GAAP financial statements with the Federal Deposit Insurance Corporation (FDIC) andmaking them publicly available upon request. We believe this requirement results in banks that are subject to FDICIA requirements meeting the second part of criterion (e): The bank is required—by law, contract or regulation—to prepare and make U.S. GAAP financial statements publicly available on a periodic basis. When a bank also has one or more securities not subject to contractual restrictions on transfer, we believe it meets the definition of a public business entity and, accordingly, would not have the option to adopt financial accounting and reporting standards for private companies. Call Reports & Thrift Financial Reports While they are publicly available, we do not believe the re- quirements to file quarterly and annual Reports of Condition and Income (Call Reports) and Thrift Financial Reports (TFR) meet criterion (e), since they do not require compliance with all of the disclosure requirements under U.S. GAAP. However, there is speculation that federal banking regulators will not allow adoption of FASB’s private company accounting alternatives in these reports. If so, financial institutions must evaluate whether it’s worth the time and expense to maintain two sets of books if they wish to adopt those alternatives in their GAAP financial statements. Time will tell. Conclusion Even if certain financial institutions qualify to elect U.S. GAAP alternatives, they should proceed with caution until federal banking regulators determine whether they will allow FASB’s private company alternatives to be adopted in regulatory reports; institutions subject to FDICIA have additional consid- erations to evaluate. n A legal partner you can trust. Our advantage is simple—we understand the business. Stinson Morrison Hecker’s banking attorneys have broad experience in matters related to financial services, including commercial lending, mergers and acquisitions, regulations and compliance, litigation and payment systems. Bank on our reputation and knowledge. Stinson.com. Ernie Panasci Kristin Godfrey The choice of a lawyer is important and should not be based solely on advertisements. 5613 DTC Parkway, Ste. 970 | Greenwood Village, CO 80111 | 303.376.8400 Denver | Kansas City | St. Louis | Phoenix | Washington, D.C. Omaha | Wichita | Overland Park | Jefferson City | Decatur Perry Glantz Deborah Bayles 20539 CO Banker Ad_Half pg 9/30/13 11:58 AM Page 1 For more information, contact your BKD advisor. This information was written by qualified, experienced BKD professionals, but apply - ing specific information to your situation requires careful consideration of facts and circumstances. Consult your BKD advisor before acting on any matter covered here. Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved.