FBLG Banking Letter - June 2019 Edition

Now Open - 31st Annual Independent Bank Compensation Survey

Complete the survey now on our website!

Many of you are long-time participants and we welcome your participation again this year. Our survey collects and analyzes compensation information for key bank positions as well as data on bonus and benefit plans. All reports are free of charge and accessible online to survey participants. 

To read more, click here.

It May Not be Just Your Loan Policy That Needs a CECL Update

Charles J. Garrison, CPA

Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses, issued in June 2016 changed the accounting for impairment of financial assets and certain other instruments.  While much time and other resources have properly been expended to implement a suitable yet affordable model to effectively implement the Current Expected Credit Loss (CECL) model for loan portfolios, the ASU also contains requirements for debt securities.

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The Importance of Verification of Liquidity

Chaz Eiguren, MBA

As financial institutions continue to try to grow their Balance Sheets and more specifically their assets, their common goal is to book quality loans that will perform and amortize through the life of the loan.  However, that isn’t always possible as downturns in the economy, increases in material costs or rising interest rates are a few factors, but not all, that can affect a borrower’s capacity to repay their debt.   

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Transmitting Utility 

Brent S. Kruger, MBA

The Uniform Commercial Code (UCC) was first published in 1952 as a Uniform Act to sync laws related to sales and other commercial transactions within territory controlled by the United States. Article 9 of the UCC governs transactions that involve one party taking a security interest in another’s personal property. More specifically movable or intangible property and fixtures. However, even with established standards, there is sometimes confusion related to fixtures filings.

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Joint Agency Capital Simplification 

Morgan D. Stansberry

Pursuant to the 2017 review under the Economic Growth and Regulatory Paperwork Reduction Act, the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System (the agencies) made a final ruling on the simplification of the capital rule last month. In their March 2017 report to Congress, the agencies committed to reducing the regulatory burden on community banking organizations. 

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High Volatility Commercial Real Estate and Loan Policies

Ryan P. Pospeck, CPA

A common question we have started seeing from the community banks we work with, is an increased effort to identify High-Volatility Commercial Real Estate (HVCRE) loans in their portfolio. Since the BASEL III regulatory capital rule changes were initially incorporated in 2015, there is an updated concept of how these HVCRE loan types are risk-weighted for Call Reporting purposes. Before this change, these loan types were always assigned a risk rating of 100%; the loans are now assigned a risk rating of 150%.

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Upcoming Events

TX IBAT Annual Leadership Conference | Frisco, TX | June 20-22

UT UBA 111th Annual Convention | Sun Valley, ID | June 23-26

IBA, NBA & OBA 2019 Annual Convention | Coer d'Alene, ID | June 24-26

KS CBA Annual Convention and Tradeshow | Wichita, KS | July 10-12

IA CBI's 48th Annual Convention | Okoboji, IA | July 17-19

ABA CRCM Exam Prep | Chicago, IL | July 22-26

TX IBAT Texas Financial Literacy Summit | Farmers Branch, TX | July 23-24

MT MIB Convention | Butte, MT | July 23-24

ICBA/NM Annual Meeting | Albuquerque, NM | July 25-28

ICBA BSA/AML Institute | Denver, CO | August 5-7

TX TBA HR & Operations Conference | Cedar Creek, TX | August 8-10

ICBA Commercial Lending Institute | Minneapolis, MN | August 12-16

ABA Risk Management School - Advanced | Reston, VA | August 19-22

CO CBA Marijuana and Banking Conference | Denver, CO | August 26-27