Sageworks Blog

Apr26

Are you sure your spreadsheets are error-free? Billy Burnet [email]

Apr 26, 2013 11:20

Eighty-eight percent of spreadsheet documents contain errors, as stated in a recent article in MarketWatch, which cited a 2008 analysis of multiple studies. Ray Panko, a professor of IT management at the University of Hawaii and an authority on bad spreadsheet practices, noted, “Spreadsheets, even after careful development, contain errors in 1% or more of all formula cells. In large spreadsheets with thousands of formulas, there will be dozens of undetected errors.” [More]

Mar18

Basel III Capital Rules: Delay is a victory for community banks Billy Burnet [email]

Mar 18, 2013 10:05

The new proposed capital and liquidity requirements from Basel III pose a major threat to the survival and profitability of community banks, according to Edgar Ortiz, President and CEO of Strategic Analytic Solutions LLC. In part 1 of this guest column, Ortiz provides insight into how the delay of the Basel III rules was a victory for community banks across the country. [More]

Mar15

Four companies that need a credit check Mary Ellen Biery [email] Research Specialist

Mar 15, 2013 16:01

Companies must protect themselves against financial and operational risks, even as they balance the need to service customers and plan for growth. When should your business conduct financial due diligence on another company? Here are four types of businesses on which you should conduct financial due diligence. [More]

Jan 23, 2013 09:14

While there may be revisions to the new risk-weighting proposal, it's evident that regulatory agencies will be soon making a change to how banks measure risk, particularly risk in the portfolio.

To prepare, financial institutions should ask the following questions: [More]

Jan22

Proposed changes to risk-weighting methodology Libby Bierman [email] Analyst

Jan 22, 2013 09:34

The current methodology to determine risk-weighted assets is somewhat simple. Presently, banks’ risk-weighting calculation categorizes assets into four risk-weighting categories: 0 percent, 20 percent, 50 percent, and 100 percent. A commercial loan, for example, is weighted at 100 percent. This weighting does not account for collateral, cash flow or character. Moreover, it does not account for the complexities that have surfaced over the past several years with cross-collateralization and multiple guarantors. Consequently, setting a regulatory capital requirement based on the existing risk-weighting calculation does not truly measure the different risk within each financial institution. [More]

Jan21

Risk-weighted assets, regulators' stiff proposal Libby Bierman [email] Analyst

Jan 21, 2013 16:41

Despite regulatory delays, it's likely that banks will be required to report appropriately how their institutions’ risk correlates with their given capital. It's critical that banks begin to plan for changes to capital requirements, and a good place to begin planning is with the institutions’ methodology for risk-weighting. [More]

Jan 16, 2013 10:07

Financial institutions looking for their next CEO often have difficulty finding the perfect candidate, says J. Timothy O’Rourke, President and CEO of Matthews, Young & Associates, Inc. In this post, O’Rourke describes traits that community bank CEOs must possess in 2013. [More]

Dec07

Credit analysis benefits of a probability of default analysis Libby Bierman [email] Analyst

Dec 07, 2012 16:48

Financial institutions may inject a probability of default (PD) analysis into several steps of their credit risk processes, and each use-case provides a different benefit to the bank that directly impacts its workflow efficiency, credit decision quality, and most likely profitability. [More]

Oct 26, 2012 09:03

It has become critical for businesses of all types and for lending institutions to spot signs of financial sickness before they are fatal. Bankruptcies not only hurt the firm the itself but it affects other third parties such as suppliers, vendors, or partners. Subsequently, the recent rise in bankruptcies has put a tremendous amount of pressure on bankers and loan officers. [More]

Sep 10, 2012 12:23

Developing a strong Enterprise Risk Management (ERM) system requires understanding the risks that commonly trip up other financial institutions, according to regulatory and management consultant Bruce Bugbee of Bugbee Warner PLLC. In this guest column, Bugbee outlines some of those potential hazards. [More]