Just as a librarian’s primary duty is to supervise his or her library, one important goal of corporate governance is to provide organizations with appropriate oversight. This strategic guidance is integral to many organizations, particularly financial institutions. In fact, the regulatory expectations for bank board members – including sound corporate governance development and education – [...]
The Financial Accounting Standards Board (FASB) released a much-anticipated standard that introduces the current expected credit losses (CECL) methodology. The CECL model requires financial institutions to immediately record the full amount of predicted credit losses in their loan portfolios rather than waiting until the losses are deemed probable (as required by the current incurred loss [...]
Watch Heather Barber as she discusses how CRI guided a client in complying with the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and shares advice on how to simplify the FDICIA implementation process.
Watch Chris Cain as he discusses a client engagement that required all parties involved to keep a close eye on Banking Secrecy Act (BSA) monitoring parameters.
When some people hear of bank robbers, they often think of Bonnie and Clyde, Jesse James, or Danny Ocean’s hand-picked team of thieves depicted in the Oceans 11 movie series. Today’s bank robbers do not necessarily ride off on horses into the sunset or garner the attention of a Hollywood movie. The fictionalized bank robber has [...]
While what happens in Vegas may sometimes stay in Vegas, when a community bank experiences customer data breaches that typically makes the news. So what steps should a financial institution take to ensure it meets the requirements of the Gramm-Leach-Bliley Act (GLBA)? From loan reviews to service organization controls (SOC) reports, community banks often choose [...]
Previously, we provided an overview of the Allowance for Loan and Lease Losses (ALLL), and now let’s discuss how community banks should apply the guidance. A typical loan loss reserve methodology would provide for the timely identification of potentially impaired loans as defined under the Accounting Standards Codification (ASC) 310 Receivables, the Loan Impairment guidance. [...]
"Banks today need at least $1 billion in assets to stay independent." We’ve all heard this supposed truism—but is it accurate? Or can community banks survive in today’s highly regulated and complex environment? One truth is that the number of small banks has steadily declined in recent years. In 2013, the number of federally insured [...]
Community banks are a target for cybersecurity breaches. A cybersecurity audit tests internal controls, processes, and network security to identify potential weaknesses. Watch David Mills discuss the importance of a community bank cybersecurity audit and tests that auditors may use during an audit.
Employees are the biggest cybersecurity risk to community banks. Why? Often times, employees are trying to be helpful and they violate security policies while doing so. To combat cybersecurity risks, banks should perform penetration testing and social engineering often. Watch David Mills discuss how CRI's team of IT auditors can help your community [...]
There’s a lot of uncertainty in the financial institutions industry regarding the Proposed Current Expected Credit Loss (CECL) Model. CECL shifts the focus of loan data to expected losses from probable losses and looks at the life of the loan instead of a one-year duration period. Watch Doug Mims and Chris Cain discuss [...]
Consolidation: A Potentially Perfect Recipe for Many Community Banks in Today’s Regulatory Environment
What do you get when you mix increasing regulatory requirements with reduced net interest margins? For many community banks, the answer is a prime opportunity for a merger. And while a merger is not a piece of cake, it can provide significant benefits and economies of scale. Although smaller banks are not required to implement [...]
Keys to Understanding the Interagency Policy Statement on the Allowance for Loan and Lease Losses (ALLL)
In 2006, the Federal Financial Institutions Council (FFIEC) issued the Interagency Policy Statement on the Allowance for Loan and Lease Losses. The statement embraced Generally Accepted Accounting Principles (GAAP) and sought to diminish the long-standing differences between regulatory expectations and accounting standards. However, six years later the statement continues to generate significant questions for community [...]
Community bank risk management is a key factor for strategic success, and in today’s challenging business environment it’s a critical operational component. Five of the most important risk areas for community banks to effectively identify and manage include: Strategic: Strategic risk in the community bank arena includes business decisions that are improperly implemented. For example, [...]
CRI’s banking professionals can assist your financial institution with day-to-day operations, internal audit functions, and loan reviews. We've put together our top 10 list of ways that we can assist with community bank loan reviews. Providing decision makers with loan portfolio analysis and risk rating variance reports. Examining problem loan action plans for identification of [...]
Since bank examiners pay special attention to the allowance for loan and lease losses (ALLL) as part of a regulatory examination, it doesn’t pay for community banks’ management to stick their heads in the sand. Why? The consequences of a bank’s ALLL being underfunded can be steep and may include: Downgrading the bank's CAMEL rating. [...]
New technologies and the economic decline have created a need for strong community bank internal controls in order to go for the gold. For a community bank, understanding borrowers’ control systems is a required step of loan due diligence because borrowers with weak internal controls expose community banks to greater risk of problems in their [...]