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Recent Posts

  • Calling All Bank Directors September 29, 2021
  • Updated Summary of Key Provisions HR 748 April 4, 2020
  • 199A Final Regulations: Loan Sales are included but Trust Income is not April 1, 2019
  • Section 199A Final Regulations for Subchapter S Banks- Webinar 2/21/2019 February 25, 2019
  • Joint letter of ABA, ICBA and Sub S Bank Associations October 10, 2018

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Archives for July 2014

July 30, 2014

FDIC Response to Subchapter S Bank Association’s Basel III Letter

Attached, please find the letter in response to the Subchapter S Bank Association’s letter regarding equal tax treatment for Subchapter S Banks as . . .

July 25, 2014

ESOPs: How to Enjoy the Advantages and Avoid the Risks Web Seminar

Close to 250 S corporation banks across the country sponsor an employee stock ownership plan. ESOPs can be an effective tool in the right situation to create a market for bank stock, obtain tax incentives, raise capital and reward employees with the ability to own bank stock. This program will explore the advantages and disadvantages of ESOPs and dispel myths associated with them. Even if your bank has an ESOP, the program will provide useful information on how you can get more out of your ESOP.

ESOPs, Sub S Banks

July 23, 2014

S Corp Shareholder Basis Increase

On July 23, 2014, the Treasury Department and Internal Revenue Service (“IRS”) issued final regulations providing guidance on the circumstances under which an S corporation shareholder may increase their adjusted basis due to indebtedness of the S corporation. Internal Revenue Code (“Code”) Section 1366(d)(1) generally provides that the aggregate amount of losses and deductions taken by a shareholder in any tax year cannot exceed the sum of the shareholder’s adjusted basis in its stock and the adjusted basis of any indebtedness of the S corporation to the shareholder. To the extent a shareholder does not have sufficient basis in their stock to take losses in a particular year, they may use a loan to the S corporation to increase their basis and avoid having to carry forward losses to a subsequent year. The final regulations describe the circumstances under which such loans will be treated as “bona fide” indebtedness of the S corporation to the shareholder – allowing the shareholder to increase their basis by the amount of the indebtedness and recognize the losses currently.

shareholders, Sub S Banks

July 22, 2014

FDIC Releases Guidance for S Corporation Banks

The FDIC, yesterday afternoon, issued guidance outlining the circumstances under which the Agency would approve an S corporation bank’s request for relief from the dividend restrictions imposed under the Basel III capital conservation buffer. Exceptions will generally be granted to 1- and 2- rated banks which are adequately capitalized and are not subject to a written supervisory directive. While the guidance only applies to capital conservation buffer considerations, it does recognize that there may be other circumstances such as a bank returning to a healthy condition that might present circumstances where a dividend exception could be granted. The Agency noted that it does not expect the concern to be an issue for some time as a result of the three year phase-in through 2019. We are pleased that the FDIC recognizes the unique circumstances under which S corporation banks operate and hope this guidance will result in greater recognition and willingness by the Agencies to consider case by case dividend approvals to pay taxes in a broader set of circumstances, beyond the capital conservation buffer issue. Importantly, the Agency recognizes that the ability to pay dividends is a crucial element of an S corporation bank’s capital access strategy. A more detailed description of the issuance follows.

Basel III, capital conservation buffer, dividends, FDIC

July 19, 2014

Assessing the Impact of the Dodd-Frank Act Four Years Later

On Wednesday, July 23, 2014, the House Financial Services Committee will hold a hearing entitled “Assessing the Impact of the Dodd-Frank Act Four . . .

Dodd-Frank

July 18, 2014

Senate Acts on Adding Community Banker to Federal Reserve Board

On July, 17th, the US Senate acted on the Terrorism Risk Insurance Act for seven years. In a vote of 93-4, lawmakers greenlighted . . .

community banking, Federal Reserve Board

July 14, 2014

S Corporation Bank Capital Access – Proposed Draft Legislation

This page can only be viewed by members.

capital, Preferred Stock, shareholders, task force

July 14, 2014

Increasing Sub S Banks Access to Capital

The Subchapter S Capital Access Coalition and Task Force has been organized for the specific purpose of increasing opportunities for banks, thrifts, trust companies and their parent holding companies that have elected Subchapter S federal tax treatment to raise capital and ensure the health and future success of their organizations. Our goal is to enact legislation that would (i) allow Subchapter S banks to issue “qualified preferred stock” and (ii) increase the maximum number of allowable S corporation bank shareholders from 100 to 500. Both measures are designed to enable S corporation banks, the majority of which are community banks, to significantly improve their ability to access vital sources of capital already available to other types of financial institutions. Given the significant limitations S corporation banks face in raising capital and the continued challenges associated with the economy and increasing regulation, both measures would alleviate many of the concerns currently facing S corporation banks.

capital, Dodd-Frank, Preferred Stock, shareholders

July 9, 2014

Subchapter S Bank Association Mounts Grassroots Legislative Initiative

All too often Washington completely forgets about Subchapter S banks and their special needs and circumstances. We’ve seen it first-hand with the original . . .

capital, Dodd-Frank, Preferred Stock, shareholders, task force

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Subchapter S Bank Association

112 East Pecan St., Suite 2810
San Antonio, TX 78205
Phone: 210-228-9500
Fax: 210-228-0781

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