Say goodbye to the days in which concentration risk management was as simple as assigning an arbitrary limit to commercial real estate and construction loans and calling it a day. Concentration risk management is rapidly becoming...
How the Pandemic Has Changed the Nature of Managing Concentrations
If you still think of concentration risk management as only applicable to commercial real estate, you’re in for a rude awakening. The primary pandemic lesson for community banks is that they need to rethink how concentration...
Integrating Critical Processes to Unlock Strategic Value from CECL
Although the new accounting standard known as CECL is a requirement, bankers need to stop viewing it through that lens. CECL has many silver linings.
Caveat Emptor: The Pitfalls of a SaaS Approach to CECL
Software can be wonderful. It can provide a spike in efficiency and automate a host of processes and problems that were previously solved manually in painstaking fashion. As a result, it is no surprise that many community banks...
Picking a CECL Methodology: Five Reasons Why Only One Method Makes Sense
FASB’s guidance for CECL is flexible when it comes to methodologies. In fact, many software-as-a-service (SaaS) providers and consultants make it a point to brag how their products can handle just about all of them. But let’s not...
News Alert: Regulatory Advice on What Banks Should Do in 2021
With the economic impact of the coronavirus still masked by relief efforts, community banks should act conservatively in 2021, making sure their banks have proper risk management processes in place to guard against additional...
Free Data Tool: Analysis of 3rd Quarter Loan Loss Reserves for U.S. Community Banks
Check out this new Invictus Group tool, which will help you do just that. The tool includes data for the quarter ending September 30, 2020 back to the fourth quarter of 2019.
CECL May Not Increase Loan Loss Reserves—And Other Myths for 2023 Filers
The 2023 class of CECL banks is being unnecessarily conditioned to a false reality: Their loan loss reserve will need to increase under CECL. If CECL is approached correctly, this is simply not true, unless the probability that a...
The Problem with CECL Models: You’re Asking the Wrong Question
If your bank is scheduled to implement CECL in 2023, or you’re a CECL filer unhappy with your existing model, here is my strongest piece of advice: Stop looking for a “CECL” model. What you really need is a CECL process that is...