Federal Deposit
Insurance Corporation

To:                   FDIC

From:              D. L. Evans Bank

RIN:                 124103582

Date:               September 9, 2005

RE:                  Financial Institution Letter  

Our institution recently had the privilege of reading Financial Institution Letter, FIL-72-2005, that was issued by your organization on August 2, 2005.  We believe the points outlined in the letter address, very well, the issues and concerns of small community banks, including our organization.  The purpose of this letter is to commend the FDIC on the well presented proposal and highlight some of the items that are pertinent to our institution. 

D.L. Evans Bank has been a successful and well managed institution since 1904.  Our organization has recently exceeded $500 million in total assets and will begin fiscal year 2006 with over $500 million in assets; as such we would be subject to FDICIA section 36 requirements.  We are currently in the process of preparing our institution for the FDICIA reporting requirements.  It is our conclusion that current FDICIA requirements under section 36 would have a significant financial burden on our institution.   

As a small, family owned, community bank our resources are limited.  We do have a solid board of directors that meets together on a consistent basis in order to oversee the activity of the Bank.  We also have a functioning audit committee.  However, it would be a financial burden and a struggle for our institution to satisfy the independent audit committee requirements that are outlined in section 36. 

We have taken a proactive approach and our institution has an independent accounting firm audit our financial statements on an annual basis.  This has helped our institution ensure that we prepare our financial statements in accordance with GAAP.  In addition we have an internal audit department that helps us ensure our internal controls are operating appropriately.  Part 363, of the FDICIA reporting requirements, would require an auditor’s attestation report on our internal control structure over financial reporting.  This audit work would be very burdensome and expensive for our institution.  The fees paid to accounting firms are extremely costly and the process would cause significant time constraints for key personnel throughout our organization.     

In the letter prepared by your organization we noted that the proposed change would relieve approximately 550 insured financial institutions of many FDICIA part 363 reporting requirements.  In addition many small community banks who have recently reached $500 million in total assets, like our organization, would have full FDICIA requirements extended until they reach $1 billion in total assets.  We feel strongly that the proposed change is reasonable given that 86 percent of the industries total assets would continue to be covered by the requirements of FDICIA part 363.  

In summary we commend the FDIC on their actions regarding this matter and the well documented proposal that outlines the proposed modifications to current FDICIA reporting requirements for financial institutions.  It is our conclusion that the proposed changes would achieve the purpose of significant regulatory burden reduction without sacrificing safety and soundness.