CHICAGO-According to a recent study performed by Grant Thornton LLC, banks and thrifts electing to switch to Subchapter S status are increasing for the first time since the 1997 tax year. However, the national study of more than 8,000 banks shows that banks still have several roadblocks to overcome. As of March 31, 2001, assets held by S Corporation banks totaled more than $162 billion, with an average asset size of just over $99 million. The study found that the majority of banks converting to S Corporation status are small institutions with more than 72% having total assets under $100 million. Of Federal Deposit Insurance Corp.-insured banks with assets under $100 million, 24% were organized as S Corporations. Minnesota and North Dakota possess the most S Corporation conversions at more than 40% of the total banks in each of those states. The Eighth Annual Survey of Community Bank Executives also identified a number of changes that need to be made in order to overcome various roadblocks to Subchapter S conversion, including: * Eliminating ineligible classes of stock and modifying ownership prior to the beginning of the first S Corporation tax year has been a major barrier to banks otherwise interested in making the election; * Increasing the 75-shareholder limit for S Corporations; * Ease restrictions on the types of entities that may be shareholders of S Corporation; * Permit Individual Retirement Accounts as shareholders; and * Permit converting banks more than one class of stock.