The HORNE Banking Team

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February 14, 2018

4 Hard Trends Banks Should Prepare for in 2018

With a historic tax reform in place and an economy that continues to show signs of strength, we have a positive outlook for 2018.  As we reflect on 2017, a truth has become abundantly clear – 2017 will go on record as a time of preparation and 2018 will be the opportunity to act.

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Topics: Trends

January 10, 2018

By Implementing Technology Early, Financial Institutions Reap Greater Benefits

For some years now, financial institutions (FIs) of all sizes have been tasked to leverage new technology. In many cases, integrating new solutions has come as part of larger regulatory demands—and often, obligatory ‘updates’ are the most difficult to accept. Nonetheless, those requirements are opportunities to justify spending on technology resources that offer benefits far greater than the assurance of compliance.

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Topics: Fintech, Technology

September 20, 2017

2 Reasons Your Bank Should Have Already Begun CECL Implementation

As banks navigate through their CECL implementation, many are experiencing challenges and uncertainties along the way. Since last summer when the new standard was announced, we’ve advised banks to get started on their implementation timeline sooner than later. In part, it’s to give time to mitigate the unexpected. In part, the advice comes from our experience with how complex and challenging it can be to implement new models, standards, regulations, and technologies. And finally, it’s because more robust data analysis means more confident decisions and ultimately more profitable loans over the long term.

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Topics: CECL

September 13, 2017

4 Steps to Help Millennials Build Wealth and Security

As the adage says, one of the surest ways to combat fear is to confront it head on. Financial anxiety is one of those fears. For 85% of adults, concerns around unplanned emergencies, medical expenses, insufficient funds for retirement, and school loans rank as the top stressors in their life.[1] For young, Millennial-aged adults, these concerns are even more pressing.

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Topics: Millennials, Growth

May 31, 2017

Turn CECL Compliance into Opportunity: Free Resource

Banks already engaged in the CECL implementation process know that it poses significant compliance and operational challenges to the allowance for loan losses calculation – the largest and most critical estimate for banks. But there’s another side to this coin. CECL also is a unique and compelling opportunity for banks to build the capacity to gather and use data to scale, create new revenue streams, and compete more successfully in a multi-channel marketplace.

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March 30, 2017

Use Your CECL Data to Build Competitive Opportunity

While the on-paper goal for banks working toward their implementation deadline for the new Current Expected Credit Loss (CECL) impairment standard is compliance, the long game opportunity is much greater. Every decision in the process hinges on data.

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Topics: Regulations, CECL

February 08, 2017

Preparing for CECL Compliance: Formalizing Your Policies and Timeline

As 2017 gets underway, and we understand more about what’s on the horizon for the new administration’s regulatory and tax reform, there’s a sense that the coming years will bring unprecedented changes for financial institutions. In this last post in our series about CECL adoption, we will revisit the timeline and steps. More than ever, it is critical that you are preparing now for ensuring a successful adoption in the midst of an ever-changing landscape.

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Topics: CECL

February 01, 2017

Preparing for CECL Compliance: Validate Your Models and Software

The previous post about preparing for CECL compliance looked at how to assess data, human, credit management, and technology resource capabilities and needs. It’s a critical step that documents how your institution collects, stores, measures, and manages loan portfolio data, and includes a review of future requirements, warehousing and automation capabilities, and probable risks in your loan portfolio.

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Topics: CECL

January 26, 2017

Preparing for CECL Compliance: Assess Your Resource Capabilities and Needs

In the previous post about preparing for your CECL compliance deadline, we established that there is no one-size-fits-all solution under the new standard. We provided some of the key considerations for determining how sophisticated your model should be, as well as unique benefits and weaknesses of the options available to manage the loan pools in your portfolio.

Once you have evaluated the various model options and identified which you’ll use to perform calculations, it’s time to assess your resource capabilities and needs. This is a big consideration with cross-functional implications. It will help to identify the software models and provider that will be the best fit for your institution. In this step, you'll look at four main categories—data, human, credit data management, and technology. Data should be your starting point, as it will influence every subsequent decision at this juncture.

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Topics: CECL

January 18, 2017

Preparing for CECL Compliance: Select Your CECL Models

In the previous post about preparing for your CECL compliance deadline, we looked at the steps needed to analyze the credit risks within your loan portfolio, and clarify the credit quality indicators (CQIs) impacting those risks. These first two steps of this complex, lengthy lead up to your early or required implementation date should have provided you with a solid understanding of the composition of your loan portfolio.

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Topics: Regulations, CECL

January 11, 2017

Preparing for CECL Compliance: Analyze Your Loan Portfolio and CQIs

The countdown that began June 16, 2016 is officially underway. The runway to CECL (Current Expected Credit Losses) compliance promises to be riddled with complexities. You don’t need to look much farther than the fact that FASB implementation dates are set several years out to get the sense of how important it is to take a long-term, multi-faceted approach to ensuring compliance.

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Topics: CECL, Banking

December 20, 2016

Is Your Bank Prepared to Profit From Higher Interest Rates?

On December 14, 2016, the Federal Reserve boosted its benchmark interest rate by 25 basis points to a range of 0.5 percent to 0.75 percent. While this is still incredibly low by historical standards, it is notable because it’s only the second time since the financial crisis of 2008 that the Fed has raised this rate.

The move continues to support economic growth and sustains a friendly environment for borrowing and risk-taking. It also recognizes that the U.S. is enjoying strong employment and price stability, and healthy inflation, as well as positioning the economy to ride the expected acceleration that will occur as a result of the new Trump administration.

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Topics: Regulations, Interest Rates

December 07, 2016

Free Webinar: 8 Steps to Turn CECL Compliance into Opportunity

The allowance for loan losses (ALLL) standard (ASU 2016-13) known as CECL (Current Expected Credit Losses) was released June 16, 2016. The standard was proposed in 2012 and has been deemed the “biggest change to bank accounting ever.” It’s adoption changes 40 years of standards related to how banks account for changes in their credit risk. It promises to pose significant compliance and operational challenges, and implementation is well underway for some institutions.

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Topics: CECL