Item 4. Change in Registrant’s Certifying Accountant.
(a) Dismissal of Previous Independent Registered Public Accounting Firm
On March 11, 2021, Professional Holding Corp. (“PFHD” or the “Company”) notified Crowe, LLP (“Crowe”) that it was being dismissed as PFHD’s independent registered public accounting firm, effective upon the completion of the 2020 annual audit (the “Effective Date”). Crowe will continue to serve as PFHD’s independent registered public accounting firm, including providing audit services for the year ended December 31, 2020, through the Effective Date. The decision to dismiss Crowe as PFHD’s independent registered public accounting firm was made on March 11, 2021, at the direction of and approved by the Audit Committee of the Board (the “Audit Committee”).
Crowe’s report on PFHD’s consolidated financial statements as of and for the year ended December 31, 2019, did not contain any adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. PFHD’s Annual Report on Form 10-K for the year ended December 31, 2020, has not yet been filed (and, as of the date hereof, is not yet due), and thus Crowe has not provided its report for such fiscal year.
During the two fiscal years ended December 31, 2018 and December 31, 2019, and the subsequent period through the date hereof (i) there were no disagreements between PFHD and Crowe on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Crowe, would have caused it to make a reference to the subject matter of the disagreements in connection with its reports, and (ii) there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto, except as described below.
As described above, PFHD’s Annual Report on Form 10-K for the year ended December 31, 2020, has not yet been filed (and, as of the date hereof, is not yet due). In the course of performing the audits for the year ended December 31, 2020, PFHD management has identified deficiencies in accounting for infrequent significant transactions relating to (i) accounting for participation loan sales by PFHD, (ii) the timely elimination of an inter-company capital transaction upon consolidation, and (iii) the timeliness of recording certain business combination accounting estimates with respect to PFHD’s acquisition of Marquis Bancorp, Inc. PFHD management believes in the aggregate these deficiencies are sufficient to result in a material weakness in PFHD’s internal controls over financial reporting. Additionally, PFHD management is in the process of remediating these deficiencies. PFHD expects to provide additional disclosure with respect to these matters in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The Audit Committee discussed the reportable event with Crowe. PFHD has authorized Crowe to respond fully to any inquiries of Ernst & Young LLP (“E&Y”).
(b) Appointment of New Independent Registered Public Accounting Firm
On March 11, 2021, the Audit Committee and PFHD’s Board of Directors approved the appointment of E&Y as its new independent registered public accounting firm. Through the date hereof, neither PFHD nor anyone acting on its behalf consulted with E&Y regarding any of the matters or events described in Item 304(a)(2)(i) and (ii) of Regulation S-K.
