Sageworks Blog

Jun08

Three risk rating best practices Billy Burnet [email]

Jun 08, 2013 08:15

Risk ratings methodologies differ bank by bank; in fact, the OCC’s Comptroller’s Handbook on “Rating Credit Risk” notes that “No single credit risk rating system is ideal for every bank...A bank’s risk rating system should reflect the complexity of its lending activities and the overall level of risk involved.” Nevertheless, we’ve compiled a list of three risk rating best practices that are relevant across all financial institutions.
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Jun 07, 2013 13:08

Though the term “stress testing” might still cause confusion, more and more examiners and bankers are beginning to accept the practice and embrace the accompanying benefits.

As more institutions implement loan portfolio stress testing, an issue that could cause problems is overarching responsibility. Who in the bank owns stress testing? [More]

Jun06

4 ‘Exceptional’ ways to improve loan administration: Tracking documentation exceptions Mary Ellen Biery [email] Research Specialist

Jun 06, 2013 15:38

Federal bank and credit union examiners say one element that should be part of any loan portfolio management process is a solid system for tracking exceptions. Here are four tips to improve portfolio loan management through better documentation exception tracking. [More]

Jun 05, 2013 08:03

One of the common challenges surrounding the allowance for loan and lease losses calculations is how to determine if a loan is impaired under the FAS 114 status. Watch a video to understand when a loan is considered to be impaired under FAS 114 status. [More]

Jun04

Upcoming webinar: Where will you find your next new client? Jessica Ballard [email] Director of Marketing

Jun 04, 2013 16:44

Although your firm may be successful today, it's important that you're always thinking ahead to identify where you will find your next clients. Lauren Prosser, Director of ProfitCents Professional Services, will be holding a webinar on behalf of iShade to discuss the importance of looking beyond the present to continually drive revenue. Join Lauren on Tuesday, June 11th and find out where you will find your next new client. [More]

Jun04

FASB CECL model vs. IASB credit deterioration model, pros and cons Billy Burnet [email]

Jun 04, 2013 10:50

The FASB and IASB have released separate exposure drafts, outlining their distinct, proposed plans for the recognition and reporting of credit losses. The release of these drafts marked a divergence from the previously accepted plan. In December 2012, the FASB released an exposure draft describing what is commonly referred to as the CECL model. This model was a more simplified version of the formerly agreed upon three-bucket approach. On the other hand, the IASB continued to develop the three-bucket approach with its draft in March 2013, which is now referred to as the credit deterioration model. This post outlines some of the key pros and cons of each model. [More]

Jun03

Advice for gathering loan portfolio stress testing data Libby Bierman [email] Analyst

Jun 03, 2013 10:02

Much of the data needed for stress testing can be found in the bank's core processing system, including loan balance, risk rating and interest rates. Unfortunately, much of the data is not included in that system. In order to tackle this challenge initially, there are a few steps institutions can take.

Jun01

Credit unions can build member business lending for improved exam results Sanaa Bhambri [email] Marketing Analyst

Jun 01, 2013 09:04

Business lending has been increasing among credit unions in recent years, and with this increase has come an increased focus on member business lending (MBL) and the specific risks associated with it, according to an article in CUES’ Credit Union Management magazine. Brian McLaughlin, president and founder of Tullamore Consulting LLC of Rochester, N.Y., outlines the importance of adequate staff, governance, and internal and external controls to underwrite and monitor MBL credit risk. McLaughlin is a former credit union chief lending officer with over 35 years of business lending experience in credit unions and banks. [More]

May31

Staff roles and responsibilities in relationship-based banking Billy Burnet [email]

May 31, 2013 12:25

Relationship-based banking, often desired by customers, can only be adopted by financial institutions alongside appropriate credit risk management processes. Defining staff roles and responsibilities, one of the components of risk management for institutions embracing relationship-based banking, is described in this post. [More]

May30

3 keys to effective loan administration Mary Ellen Biery [email] Research Specialist

May 30, 2013 15:54

With apologies to famed sportscaster Dan Patrick, you can’t stop all bad loans; you can only hope to contain them. There are several keys to a financial institution’s effective loan administration, but here are three to consider as you review the existing loan administration system. [More]