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COVID-19 Pandemic – Credit Concerns

By the end of 2020 it is estimated that U.S. community banks could face a 50% decrease in earnings due to spikes in credit costs. Second-quarter earnings have not yet exposed a significant decline in credit quality, in part due to deferrals of interest and/or principal payments on their loans as promoted under the CARES […]
  • Posted by Justin Hill
  • On Thursday July 23rd, 2020
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OCC Issues a Proposed True Lender Rule

The Regulatory Agency, Office of the Comptroller of the Currency (OCC) on Monday, July 20th,2020 proposed a regulation that would determine when a National Bank or Federal Savings Association makes a loan and is the “true lender” in the context of a partnership between a bank and a third party, such as a marketplace lender. […]
  • Posted by Justin Hill
  • On Wednesday July 22nd, 2020
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Fed to Reserve Bank Exams After Scaling Back for Pandemic

On Monday June 15th the Federal Reserve announced that it is resuming examinations for Banks of all sizes. The Fed specifically stated that the rationale for this decision is that “As financial institutions have had time to implement contingency operating plans and adapt operations to the COVID-19 operating environment, the Federal Reserve is resuming examination […]
  • Posted by Justin Hill
  • On Wednesday June 17th, 2020
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Interagency Final Guidance on Credit Risk Review Systems (Interagency Guidance)

On May 8, 2020, the FDIC, Federal Reserve Board, OCC and NCUA, jointly issued the final Interagency Guidance on Credit Review Systems (1).  Below is a summary of the guidance as provided by CEIS Review. This Interagency Guidance (1) replaces the guidance in– Loan Review Systems, which is part of the December 2006 Interagency Policy Statement on […]

ALLL/CECL and COVID-19 – Reserving for Loan Losses During a Pandemic

by John Hurlock, Executive Consultant at CEIS Review “Unlike the 2008 Financial Crisis, this crisis is borne of a microbe and not of a financial meltdown.” As recently as a few months ago, determining the reserve had settled into a fairly straightforward and predictable event. Losses have been extremely low for the last several years […]

Allowance for Credit Losses (ACL) Summary – Accompanies the Current Expected Credit Loss (CECL) directive issued by the FASB

On February 20, 2020, the four US Banking regulators (OCC, FRB, FDIC and NCUA) issued the final policy statement for the financial institution adoption of CECL, the FASB (ASU 2016-13) change from an incurred loss (IL) reserving methodology to an expected loss (EL) methodology. This methodology is a forward looking reserve determination and is calculated […]

Uncharted Waters – COVID-19 Is A Different Kind of Crisis

Overview of Initial Impact. How Should Lenders Prepare? Over the last few weeks, I’ve been researching the potential financial impact of the COVID-19 Pandemic and reflecting on the economic aftermath relative to previous crises. Although there are some commonalities in all crises (i.e. volatility, disruption), I believe that COVID-19 is profoundly different. The harsh reality […]
  • Posted by Justin Hill
  • On Wednesday May 13th, 2020
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Community Bank Partner – Commercial Portfolio Management

Over the past 8 weeks impacts of the actions taken to safeguard everyone from the virus and “flatten the curve” have forced many changes on both our personal and professional activities. As we begin the task to assess these changes and their potential impacts we need to also evaluate what tools are available to help […]
  • Posted by Justin Hill
  • On Wednesday April 29th, 2020
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Stress Testing in Stressful Times

Ten years ago, in the aftermath of the financial crisis the banking community and regulatory authorities embraced the use of enhanced modeling and stress-testing to ward against a future event having such an significant impact on the Nation’s banking environment. Those efforts aided by strong economic recovery, have resulted in increased capital levels and stronger […]

COVID-19 Reserve Analysis Assistance

CEIS Review understands that banks have heightened their consideration of “today’s” reserve level adequacy and plans for near to medium term provisions. Reserve levels are currently being impacted by a number of events, some of which are difficult to quantify and will only emerge over time. Decisions need to be made and there are several […]
  • Posted by Justin Hill
  • On Wednesday April 8th, 2020
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