New Appraisal Guidelines Adopted for Appraisals and Evaluations

  • April 26, 2011

In December, federal financial regulators adopted the appraisal and evaluation guidelines that were originally issued for public comment in 2008. These new guidelines were issued in response to heightened concerns that arose regarding collateral appraisals and credit quality in the aftermath of the financial crisis.

Repeal of Reg Q – Competitive Strategy in a Post-Reg Q World

  • April 26, 2011

On July 21, a banking regulation on the books for nearly a century and considered by many to be one of the most antiquated laws will finally be repealed. That’s the date when Reg Q, which has prohibited banks from paying interest on commercial demand deposit accounts since the Great Depression, will officially become part of the history books. The repeal of Req Q comes courtesy of the Dodd-Frank financial reform bill passed last summer. The big question now is what will be the impact of this repeal on community banks?

Troubled Debt Restructures – What You Should Know About TDRs

  • April 26, 2011

In the current post-financial crisis lending environment, financial regulators are taking an especially close look at restructured small business loans. Most banks are working with at least some of their small business and commercial real estate borrowers to rehabilitate troubled loans by modifying loan terms and granting certain concessions.

Final FASB Disclosure Guidance Issued

  • January 11, 2011

Last July, the FASB issued new disclosure guidance significantly expanding existing financial statement reporting requirements for both public and private companies in the U.S. ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, is effective for both interim and annual reporting periods ending after December 15, 2010, for public companies and after December 15, 2011, for private companies.

Impairment Testing and Fair Value Measurement

  • January 11, 2011

Banks today are continuing to deal with a high volume of substandard and problem loans. Part of the process of dealing with these loans is testing them for impairment. ASC 310-40 requires loans to be tested for impairment if the bank determines, based on the facts and circumstances surrounding the local market, the loan won’t be re-paid in accordance with the contracted terms and conditions.

How to Spot Problem Loans — and Know What to Do

  • January 11, 2011

Nearly three years after the onset of a financial crisis that will be remembered as one of the worst in our nation’s history, many banks are still dealing with the ongoing fallout. They continue to face rising levels of delinquencies, substandard loans and problem credits in their commercial loan portfolios.

HMDA and Commercial Loan Refinancing

  • October 19, 2010

If you’re a commercial lender, you can be forgiven for wondering what, if anything, the Home Mortgage Disclosure Act, better known as HMDA, has to do with commercial loans. HMDA, which was enacted by Congress in 1975 and implemented by the Federal Reserve Board’s Regulation C, requires banks to maintain and annually disclose data about home purchases and refinance applications. This data is then used to help regulators determine whether the bank is serving the housing needs of their communities and identify possible discriminatory lending patterns.

Portfolio Management Strategies – Monitoring Borrower Concentrations and Covariance

  • October 19, 2010

We all know better than to put all our eggs in one basket. Unfortunately, many banks ignored this time-tested wisdom when it came to constructing their loan portfolios, contributing to the financial crisis and credit crunch of the past few years. Specifically, these banks allowed high concentrations of risky types of loans to build up in their portfolios without considering the potential impact on the bank should things turn south.

Financial Reform: What Will it Mean for Community Banks?

  • October 19, 2010

This summer, the most comprehensive overhaul of the financial services industry since the Great Depression was signed into law: the Dodd-Frank Wall Street Reform and Consumer Protection Act. Passage of the Act was just the beginning, though, as many of the implementation details must still be ironed out by regulators. But at first glance, the Act appears to be a mixed bag for community banks, with some potential benefits and some drawbacks.