Financial Services Risk Advisors

We are all familiar with TBTF, but is “Too small to Succeed” a reality?
In a recent letter to Ashville, NC based Ashville Savings Bank (ASBB) CEO Susanne DeFerie, activist investor Lawrence Seidman asserted that the bank is “too small to succeed” and should therefore immediately begin locating an acquirer.  Mr. Seidman raises and important question currently being contemplated in the board rooms of community banks around the country: is “too small to survive” a reality?.

The 5 Things You Need To Know To Prepare For Your Next Regulatory Exam
“Exams ain’t what they used to be.”  Poor grammar, but a true statement. As a financial institution examiner for more than 30 years, I can attest to that.  No longer do the examiners show up unannounced on Monday and send rookie examiners to stand behind each teller and count and balance cash, while more senior examiners took control of the note vault and loan documentation.  You will receive an extensive request list for records and documentation, including raw loan data files in a specific format, and a request for electronic credit file documentation once the regulators have determined the scope of the loan review.

Stress Testing CECL Data: The Competitive Advantage Community Banks Are Looking For

​If you haven’t begun to prepare for the introduction of the current expected credit loss (CECL) allowance model, then you should be.  Sources close to the FASB decision tell us that the final ruling will be out later this year, with an implementation date as soon as late 2017 or early 2018.  The difference with CECL from the current, incurred loss model is the tremendous amount of historical credit information that banks will be expected to capture and maintain.  For smaller banks without a dedicated data warehouse that is able to capture and digest this information, efforts need to be quickly underway to develop a process to capture and store this data in archived spreadsheets or one of the dedicated ALLL platforms available on the market.The good news for community banks is, what you do with all of this data once you capture it can create a significant competitive advantage for you in your market.