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October 19, 2017

A publication of Fortner, Bayens, Levkulich & Garrison, P.C.

Upcoming Events

ICBA/NM Cross Channel Risk Academy
Albuquerque, NM
Oct 24-25, 2017

TX IBAT IT Security & Fraud Summit
Dallas, TX
Nov 1-2, 2017

NE NICB Management Conference & Trade Show
Lincoln, NE
Nov 2-3, 2017

ICBA Call Report Preparation
Nashville, TN
Nov 2-3, 2017

TX TBA Strategic Opportunity and M&A Conference
New Orleans, LA
Nov 5-7, 2017

ICBA Community Bank Chairman's Forum
Hilton Head, SC
Nov 6-7, 2017

St. Louis, MO
Nov 6-7, 2017

ABA ERM Advanced Professional Development Program
Washington, DC
Nov 13-17, 2017

ABA National Agricultural Bankers Conference
Milwaukee, WI
Nov 12-15, 2017

ICBA BSA/AML Institute
San Diego, CA
Nov 13-15, 2017

WA WBA 2017 Bank Executive Conference
Seattle, WA
Dec 3-5, 2017

ABA Financial Crimes Enforcement Conference
National Harbor, MD
Dec 3-5, 2017

Navigating the Winds of Change

The “New Normal” for Community Banking

Please join us, Monday October 23, for a one-day seminar examining the current trends in community
banking. This seminar is hosted by Fortner, Bayens, Levkulich & Garrison, GLC Advisors & Co., and Lewis and Roca Rothgerber Christie LLP.

Industry experts will present on the following topics:

  • Regulatory Update
  • Topical accounting and tax issues
  • Bank litigation risks
  • M&A market trends
  • Succession planning and liquidity
  • Capital markets & securities considerations.

For more information and to register for the seminar please click on this link. 

New OREO Sales Recognition Standards Taking Effect

By Alexander Muñoz, CPA

For the past few years ASC 360-40: Real Estate Sales has been the accounting guidance to recognize a sale of other real estate owned (OREO). This guidance required that in order to fully-recognize a gain on a seller-financed OREO sale, at the time of sale, the customer needed to have an adequate down payment. The guidance provided certain percentages of the total sales price based on the type of property. This will change when ASC 610: Other Income takes effect for non-public entities in 2019. This guidance borrows from ASC 606: Revenue from Contracts with Customers by relying on the satisfaction of five principles to recognize revenue:Identify the contract with a customer

  1. Identify the contract with a customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price
  4. Allocate the transaction price to the performance obligation
  5. Recognize revenue when (or as) each performance obligation is satisfied

To read more, click here.

Rise in Credit Card Delinquencies

By Phillip J. Schuyler, CPA

While most banks continue to enjoy strong loan demand and limited loan charge-offs, credit card defaults have slowly been creeping up from the historical lows seen in 2015. The Federal Reserve of St. Louis reports quarterly U.S. credit card default rates were 2.12% for the second quarter of 2015. These default rates increased each of the next 8 quarters to 2.47% for the second quarter of 2017. Many believe the increase is due to loosening credit standards as unemployment rates continue to trend downward. U.S. household debt levels are near record highs, after having surpassed their pre-crisis peak earlier this year.

To read more, click here.

Changes to Securities Transaction Settlement Cycle

By Michael Kurtz, CPA

In September, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued a notice of proposed rule (NPR) changes for securities purchased or sold by FDIC supervised institutions, national bank and federal savings associations. Currently, the settlement cycle for securities purchased or sold is three business days (T+3, trade date plus three days), but under the NPR it would shorten the settlement cycle to two business days (T+2). The adoption of this NPR would align with the new industry standard settlement cycle implemented by the SEC, (Securities Transaction Settlement Cycle Rule 15c6-1), which became effective September 5, 2017.

To read more, click here.

Section 179 and Bonus Depreciation Reminders for 2017

By Ryan Pospeck, CPA

As a friendly tax reminder, any banks looking for tax relief and plan to capture Section 179/Bonus Depreciation must have their new and used equipment in place by December 31, 2017. Under Section 179, banks may elect to deduct as an expense the cost of any qualified (new or used) tangible or real property placed in service during the tax year. In 2017, banks with less than approximately $2,000,000 in qualifying purchases are allowed to deduct up to $510,000 from their current year’s taxable income. Purchases in excess of $2,000,000 will begin to have the Section 179 deduction phased out.

To read more, click here.