As U.S. banks approach the $100 billion asset threshold, they encounter a much stricter regulatory landscape shaped by recent financial disruptions and evolving federal oversight. Following the banking turmoil of 2023, federal agencies have indicated that institutions in this size category will now face less regulatory flexibility and greater scrutiny.

One key development is the application of Enhanced Prudential Standards (EPS) to these banks. The Federal Reserve now places increased emphasis on applying EPS to "Category IV" institutions—those with assets between $100 billion and $250 billion. This framework requires the creation of formal board-level risk committees and the appointment of a Chief Risk Officer (CRO) who reports directly to both the CEO and the risk committee. These measures are designed to ensure that banks have strong processes for identifying, managing, and reporting risks.

Banks crossing this threshold must also perform more rigorous capital planning and liquidity stress testing. This includes mandatory company-run stress tests (DFAST) as well as comprehensive internal liquidity stress tests (ILST) that assess various market scenarios over multiple time horizons. Institutions are required to develop detailed Contingency Funding Plans (CFP) outlining strategies for managing potential liquidity shortfalls.

Additionally, insured depository institutions with at least $100 billion in assets must submit resolution plans—commonly referred to as "living wills"—to the FDIC. These documents describe how an institution could be resolved in an orderly way if it fails, aiming to limit disruption within the broader financial system.

To manage these requirements efficiently, banks are expected to implement advanced automation across their operations. Automated systems support daily liquidity analysis and enterprise-wide risk reporting, which help maintain profitability while ensuring compliance with enhanced regulatory expectations.

Another major change is related to capital standards under what regulators call the "Basel III Endgame." Proposed reforms will require all banks with at least $100 billion in assets to increase their common equity tier 1 (CET1) capital by approximately 16%, although the actual impact will depend on each bank's risk profile and business activities. The rules also mandate a shift from internal models-based approaches toward standardized calculations for credit and operational risk, promoting consistency across institutions but reducing flexibility in tailoring risk assessments.

In response to weaknesses highlighted by last year's bank failures, new proposals would require banks to include unrealized gains or losses from available-for-sale securities in their regulatory capital calculations via Accumulated Other Comprehensive Income (AOCI). This makes regulatory capital more sensitive to interest rate changes and demands stronger management of investment portfolio risks.

Federal regulators have also proposed that large banks hold a minimum layer of eligible long-term debt (LTD). The requirement aims to strengthen financial stability by providing loss-absorbing resources that can recapitalize failing institutions or facilitate their acquisition while minimizing costs for deposit insurance funds. Banks must maintain LTD equal to at least 6% of risk-weighted assets, 3.5% of average total assets, or 2.5% of total leverage exposure—a measure phased in over three years.

These shifts mean that balance sheet management is no longer simply about compliance but requires strategic planning on both asset growth and funding strategies. Each asset must be evaluated for its contribution to overall risk-weighted assets and return on required capital, while liabilities—including newly issued long-term debt—must be managed carefully due to higher funding costs.

Beyond new rules, supervisory agencies such as the Federal Reserve, OCC, and FDIC are increasing both the intensity and frequency of oversight for banks exceeding $100 billion in assets. Key focus areas include verifying effective liquidity risk management—particularly regarding assumptions about deposit run-off rates—and ensuring boards provide credible challenge to management decisions around governance and controls.

Supervisors will closely examine capital planning processes, interest rate risk management, preparedness for DFAST stress testing, and operational resilience measures like cybersecurity and vendor oversight. Regulators expect not only thorough documentation but also clear evidence demonstrating that frameworks work effectively in practice.

Overall, regulators signal that banks reaching this level must demonstrate maturity in risk management commensurate with their systemic importance rather than relying solely on compliance checklists. Automation is considered essential for meeting data-intensive requirements such as continuous stress testing. As rules evolve—including pending Basel III Endgame provisions—institutions are urged to proactively reshape portfolios and funding strategies well before formal implementation deadlines arrive.

Banks are advised that sophisticated balance sheet optimization is crucial for balancing safety, soundness, profitability—and ultimately navigating heightened post-$100 billion oversight.