In 1993, the Federal Deposit Insurance Corporation (FDIC) adopted 12 CFR Part 363 titled “Annual Independent Audits and Reporting Requirements” to implement Section 36 of the Federal Deposit Insurance Act (“FDI Act”) to impose various requirements on FDIC-insured depository institutions (including insured banks and savings associations) designed to facilitate early identification of problems with financial institutions.

In brief, all institutions subject to Part 363 must (among others): (i) prepare annual financial statements in accordance with GAAP that are audited by an independent public accountant; (ii) have a management report accompanying the annual financial statements that complies with Part 363; (iii) engage an independent public accountant to audit and report on the institution’s annual financial statements in accordance with generally accepted auditing standards or the PCAOB's auditing standards; and (iv) file a Part 363 Annual Report each year.

Prior to January 1, 2026, Part 363 applied to institutions with $500 million or more in consolidated total assets, with more burdensome requirements applying for larger institutions based on their asset size.  On November 25, 2025, the FDIC issued a final rule that amended the dollar thresholds in Part 363 and other regulations (the “Threshold Final Rule”).  90 FR 55789.  These new thresholds became effective on January 1, 2026, and the Threshold Final Rule also provides that the thresholds will be indexed in the future for inflation.

This Monthly Telephone Briefing provides an overview of the requirements under Part 363 and its nuances, as updated by the Threshold Final Rule. Handout to be posted on Wednesday, June 17!