Federal Deposit
Insurance Corporation

From: Pam Zbylut [mailto:pzbylut@snbomaha.com]
Sent: Tuesday, August 30, 2005 10:42 AM
To: Comments
Subject: Annual Independent Audits and Reporting Requirements

I have reviewed the proposed amendment to the FDIC's annual audit and reporting requirements that would raise the asset-size threshold from $500 million to $1 billion for internal control assessments by management and attestations by external auditors. The proposal also would exempt banks under $1 billion in assets from the requirement that the outside directors on audit committees be independent of management. Security National Bank of Omaha supports the proposed changes. However, we would like to see the $1 billion threshold tied to an index that would increase that threshold annually.

The proposed changes would be a positive step in reducing regulatory burden as the cost of the annual audit would be lower by eliminating the need for external audit attestations. As a community bank with approximately $490 million in total assets, the proposed change would also allow us to keep our audit staff at its present level since we will not need to monitor our internal controls at the level presently required under FDICIA. We realize this proposal does not diminish the need for strong internal controls. We will continue to diligently assess and test our internal controls.

This change will also help our community bank in staffing our audit committee since our audit committee won't be required to be independent of management until the bank reaches $1 billion in assets. As a family-owned community bank, we have operated for successfully for 41 years with a board of directors that has been largely comprised bank officers.

Thank you for your consideration of these comments.

Sincerely,

Pamela S. Zbylut
Audit / Compliance Manager
Security National Bank of Omaha