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A publication of Fortner Bayens Levkulich & Garrison, P.C.
Headlines
Prepaid FDIC Insurance: Accounting, Tax and Regulatory Capital Impact
by Daniel C. Dibella, CPA
On November 12, 2009, the FDIC adopted the final rule relative to its proposal to require institutions to prepay certain deposit insurance assessments. Pursuant to the final rule, institutions will pay the following on December 30, 2009:
- Prepayment of quarterly deposit insurance assessments for all of 2010, 2011 and 2012.
- Accelerated payment for Q4 2009 deposit insurance assessment (this would have otherwise been paid in March 2010).
- Regular payment for Q3 2009 deposit insurance assessment.
In addition to ensuring that sufficient cash is available for payment, institutions need to consider the accounting, income tax and regulatory capital impact. To read more, click here.
Congress Expands the Net Operating Loss Carryback
by Charles J. Garrison, CPA
In possibly the most helpful legislation enacted for community banks this year, on November 6 Congress extended the Net Operating Loss carryback for most corporations to 5 years, rather than 2 years. This will enable many banks to unlock previously disallowed deferred tax assets that could result in a boost to earnings and capital in 2009. To read more, click here.
Planning Critical Capital Infusions
by David J. Bayens, CPA
Among other problems, capital adequacy is keeping many bankers awake at night. Losses have whittled down capital to the point where meeting regulatory capital standards is in jeopardy.
The problem that a growing number of banks face is that events often take place near the end of a quarter (or even after the end of the quarter) that can significantly affect capital. Examples of these include adjustments for ALLL provisions, OTTI losses or fair values, the amounts of which might not be quantified until after the end of the quarter. When the amount of these adjustments impacts capital adequacy, banks may be unable to record a capital infusion to restore capital to an adequate level in the same period that the losses are required to be recognized.
There are rules (of course) and considerations for planning critical capital infusions. To read more, click here.
Company Vehicles – Are You Meeting IRS Requirements?
by Joseph M. Press, CPA, CFE
It is quite common for banks to provide vehicles to its executives. What may not happen quite as often is the proper tax treatment of this fringe benefit. The IRS has specific rules regarding how to quantify the benefit to the employee, which then goes into the employee’s wages to end up in their W-2. As we approach the end of the year, now is a good time to review your bank’s policies regarding bank owned vehicles driven by employees. To read more, click here.
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