Today's regulatory environment
can be challenging.
CRI can help you rise to the unique challenges facing financial institutions in today’s constantly changing regulatory environment.
Financial institutions face a variety of unique challenges, including – but certainly not limited to – heightened regulatory scrutiny. CRI understands these complexities and has ascended to become the South’s premier provider of accounting, auditing, and risk management services to financial institutions by serving 150+ community banks, credit unions, finance companies, and mortgage companies. In addition to traditional audit & tax services, our professionals have a high level of industry and functional expertise in providing risk management services, including:
The service approach of our financial institution services team embraces the highest standards of our profession while simultaneously elevating proactive partner involvement, independence, and industry accounting knowledge. Because of CRI’s industry specialization, our professionals can add soaring strategic value to our relationships by offering insights into emerging trends and issues, such as the latest regulatory developments and mounting requirements. Plus, our industry leaders maintain close communication with accounting rule-makers, regulators, and leading industry professionals.
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Client SNAPshot
| CLIENT: | Community bank with $1 billion plus in assets |
| SCOPE: | Federal Deposit Insurance Corporation Improvement Act (FDICIA) implementation and internal audit co-sourcing |
| PROJECT DESCRIPTION: | CRI assisted with the FDICIA planning process, identification of significant internal controls, and testing of these controls for operating effectiveness. |
| RETURNS: | The bank successfully and seamlessly implemented FDICIA for a “priceless” result. |
Priceless results
Straight Talk
Translating technical jargon into a plain English “text.”
We are considering selling one of our branches, and there will be a considerable gain on the real estate. As you recall, the bank elected to be treated as an S-corporation several years back. At that time, you informed us that if the bank sold any assets that it might be subject to a built-in gains tax (BIG). Please help us estimate the additional tax that the bank might owe.
At the time you elected Sub-S status, there was a 10 year period where the bank might be subject to the BIG. The PATH Act permanently shortened that holding period to 5 years. Since your bank is currently in its 8th year as an S-Corporation, you are no longer subject to the BIG tax on the gain on the sale of your branch.
That is great news! Another matter that is always uncertain until the end of the year is tax depreciation. It seems that Congress usually waits until the end of the year to pass an extender’s bill making certain tax depreciation rules retroactive to the beginning of the year. However, we are in the process of projecting our taxable income. What can you tell us about our tax depreciation for year-end?
The PATH Act also extended the tax depreciation rules with bonus depreciation temporarily extended for 5 years. This bonus depreciation is available for new assets, generally personal property. It provides for an immediate depreciation deduction in the year placed in service. For 2016 and 2017, the bank will be able to take bonus depreciation of 50% for those new acquisitions. For 2018, bonus depreciation is scaled down to 40% and for 2019 scaled down to 30%.
Thank you – it’ll be great for management to already know how depreciation will affect taxable income.
As always, feel free to contact us anytime.
Client Snapshot: FDICIA Implementation
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Solutions Simplified
Down-to-earth descriptions of our services.
Services Also Available for Financial Institutions
Financial Institution Directors’ Examinations
A financial institution’s audit committee or board of directors is responsible for deciding what type of external auditing program best meets the needs of the institution based on its size and complexity. Directors’ examinations are applicable to some banks while opinion audits are the only option available to others. CRI’s specialty in servicing community banks, credit unions, and other financial institutions means that we know the right questions to ask of directors to determine their highest risk areas.
Financial Institution Loan Reviews
Having and following strong loan underwriting procedures are critical steps for building and retaining the financial strength of community banks. CRI can assist the bank in assessing the strength of their loan portfolio by testing the loan underwriting and risk grading process. Additionally, we help financial institutions strengthen these procedures for their future lending activities to reduce the risk of a weak portfolio – which could negatively impact profitability (and safety and soundness) due to losses from bad loans.
Services Also Available for Financial Institutions
FFIEC Assurance Services
The financial institution environment is driven by electronic transactions, making adherence to the Federal Financial Institutions Examination Council’s (FFIEC’s) guidelines for cybersecurity and IT controls a critical aspect of a financial institution’s business. Adapting the guidelines to your institution’s unique product and service offerings requires an understanding of the guidelines, a depth of IT technical knowledge, and financial industry experience. Our team of IT audits & assurance professionals stays abreast of the changing landscape. Additionally, the team possesses not only the technical skills to test IT controls, but also the necessary financial experience to present the results in “plain English” to board and audit committee members. From encryption to penetration testing (and everything in between), our services are designed to thoroughly test and evaluate your controls – and, in turn, help you sleep better at night.
FFIEC IT Risk Assessments
Completing an IT risk assessment can seem complicated and confusing for a financial institution. CRI’s IT audits & assurance team uses a unique data flow to make the complicated and confusing easy to understand. For your individual financial institution, we tailor the risk assessment to meet the FFIEC compliance requirements (including those related to cybersecurity risk) and convert the risk assessment into a dynamic tool that drives the organization’s IT environment, activities, board monitoring requirements, and – ultimately – the IT audit.
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