8-K: First Seacoast Bancorp Announces Auditor Change as Baker Newman & Noyes Exits SEC Banking Audits

First Seacoast Bancorp will need to find a new auditor after Baker Newman & Noyes decided to exit its audit practice for SEC-registered banking institutions.

Summary

• First Seacoast Bancorp, Inc. has been notified by their independent auditor, Baker Newman & Noyes LLC (BNN), that BNN will not stand for re-appointment for the fiscal year ending December 31, 2024.
• BNN's decision is due to their exit from auditing SEC-registered banking institutions.
• BNN will complete the audit for the fiscal year ending December 31, 2023.
• BNN will remain available for quarterly reviews until a new auditor is engaged.
• There were no disagreements between First Seacoast Bancorp and BNN on accounting principles or practices, financial statement disclosure, or auditing scope or procedure during the past two fiscal years and the subsequent interim period.
• BNN's audit reports for the fiscal years ended December 31, 2022 and December 31, 2021 did not contain any adverse opinions, disclaimers, or qualifications.

Sentiment

Score: 6

Explanation: The document is neutral in tone, reporting a change in auditors due to the auditor's strategic decision. While a change in auditor can be disruptive, the lack of disagreements and the auditor's willingness to complete the current audit and provide quarterly reviews mitigates potential negative sentiment.

Positives

• The transition of auditors appears to be amicable, with BNN agreeing to complete the 2023 audit and remain available for quarterly reviews.
• There were no disagreements or reportable events between the company and BNN, indicating a healthy working relationship.
• The previous audit reports from BNN were clean, with no adverse opinions or qualifications.

Negatives

• First Seacoast Bancorp needs to find a new independent registered public accounting firm, which could cause some disruption.
• The change in auditors may require additional time and resources for the company.

Risks

• The process of finding and engaging a new auditor could be time-consuming and may introduce some uncertainty.
• There is a risk of potential delays in financial reporting if the transition to a new auditor is not smooth.
• The company may incur additional costs associated with the auditor change.

Future Outlook

First Seacoast Bancorp will need to engage a new independent registered public accounting firm for the fiscal year ending December 31, 2024 and beyond.

Industry Context

The exit of Baker Newman & Noyes from auditing SEC-registered banking institutions may reflect a broader trend of consolidation or specialization within the accounting industry. Other regional banks may also be impacted by this decision.

Comparison to Industry Standards

• The change of auditors is not uncommon, but the reason for the change, BNN exiting the SEC banking audit practice, is unusual.
• Most companies change auditors due to disagreements or performance issues, not due to the auditor exiting a specific market segment.
• Other regional banks typically use large national or regional accounting firms, and First Seacoast Bancorp will likely need to engage a similar firm.

Stakeholder Impact

• Shareholders may be concerned about the change in auditors, but the lack of disagreements and the auditor's willingness to complete the current audit should alleviate some concerns.
• Employees may experience some disruption during the transition to a new auditor.
• Customers and suppliers are unlikely to be directly impacted by this change.

Next Steps

• First Seacoast Bancorp will need to identify and engage a new independent registered public accounting firm.
• The company will need to ensure a smooth transition of audit responsibilities to the new firm.
• The company will need to file the required documentation with the SEC regarding the change of auditor.

Key Dates

Keywords

auditor, accounting firm, Baker Newman & Noyes, First Seacoast Bancorp, SEC, audit, financial statements, independent registered public accounting firm