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What interested bankers most in 2014?

December 23, 2014
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Now that 2014 has come and (almost) gone, it’s appropriate to take a step back and review the year’s trends and hot topics. Banks and credit unions continued loan growth after the lows of the economic downtown, as recently highlighted by the FDIC and OCC. The merger and acquisition market continued its upward trend, and the number of failed institutions decreased. But the ever-changing regulatory environment is still a cause for concern, especially in the world of the allowance for loan and lease losses (ALLL).

Sageworks compiled the most popular blog posts of 2014 as an indicator of what piqued bankers’ interest, and interestingly enough, all were related to the ALLL. Here are the top five most-viewed posts:

5. How to calculate present value of future cash flows for a TDR – This post contained a video from a Sageworks webinar that described how to work with troubled debt restructure (TDR) scenarios. A common rule is that a TDR should always be considered impaired.

4. You aren’t prepared for 2015 if your ALLL lacks these traits – In addition to preparing for the pending release of the FASB’s expected loss model, this post highlighted four principles all calculations should have: comprehensiveness, defensibility, flexibility and auditability.

3. What are other banks doing with the ALLL? – Sageworks regularly hosts ALLL webinars and often polls attendees about their challenges. This post summarized topics like how bankers release reserves, use unallocated reserves and use qualitative factors.

2. Why yesterday was huge for banking: IFRS 9 – A lot of the attention on the ALLL this year was related to the pending move from an incurred loss model to an expected loss model. Following the economic downturn, the IASB and FASB planned to issue a new, joint standard. After they diverged over disagreements on model structure, the IASB was first to act by releasing their new, international standard as described in this post.

Todd Sprang - CECL

1. CECL to be released in first half of 2015 – Despite statements from various industry experts, including the FASB, the expected release date of the CECL model shifted from late 2014 to the first half of 2015. In this post, Todd Sprang of CliftonLarsonAllen weighed in on the change in timeframe and ways to prepare for the expected loss model.

Other popular topics in 2014 were backtesting the ALLL, key components of loan administration systems and how to perform ALLL model validations.

What topics should be at the top of this list in 2015? Let us know in the ALLL Forum for Bankers.

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