Kelly Barclay, President and CEO of Ozona National Bank in Texas, wasn’t expecting an aggressive safety and soundness exam last month in relation to COVID-19 economic issues. As a member of the Dallas Federal Reserve Bank board...
Forget Loan Categories: The New Way to Look at Post-Pandemic Community Banking
The pandemic has upended the very nature of community banking. This change requires a new way of strategic thinking, which we explain in this article. Banks that fail to adopt to the new environment will end up at a competitive...
Q2 Loan Loss Reserve Analysis: Download Free Tool to Find Out Where Your Bank Stands
There is no single line item in bank financial statements getting more attention these days than the loan loss reserve, due to both CECL and COVID-19. With the second quarter of 2020 now in the books, we decided to use our...
Top-Down Stress Testing: The Poisonous Placebo
Community banks that take a “top-down” approach toward stress testing are taking the equivalent of a placebo when it comes to assessing how ready they are if the pandemic triggers a severe and protracted economic downturn....
Dealing with a Critical Bank Exam: A Case Study in Using the Right Tool for the Job
As the coronavirus financial fallout continues, many community bank executives may soon be dealing with tough safety and soundness exams. That was the situation in 2018 for Middlefield Bank, a $1.3 billion Ohio institution. “We...
If Your Capital Plan is Missing this Metric, It’s Broken and Needs to be Fixed Now
Regulators have made it clear in recent guidance: As the economic fallout from the coronavirus continues, capital plans will be under the microscope at your next exam. And while most community banks have a capital plan, way too...
CECL vs COVID: Q1 Data Reveals What Drove Loan Loss Reserves for Publicly Traded Banks
Let’s face it: Publicly traded banks that implemented the new current expected credit losses (CECL) accounting standard during the COVID-19 pandemic faced a huge set of challenges. But what really drove their decisions about how...
What Community Banks Should Glean from the Fed's Stress Tests
The Federal Reserve announced last week that it was suspending stock repurchases and limiting the amount of dividends the largest banks can pay in the second quarter. The Fed made this decision after the large banks “passed” the...
News Alert: Examiners to Focus on Banks' Ability to Manage COVID-19 Risks
CEOs take note: Bank examiners will be looking at how well your management team has assessed risks from the COVID-19 environment, whether and how you have changed your business practices, and if you have addressed these changes...