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Podcast: Why Banks Should Know Their Margin of Safety During the COVID-19 Crisis

No one has a crystal ball that can predict when and how the economic fallout from the coronavirus will end. But community banks need a way to understand how their capital will fare as conditions change – and which loans they need to watch. In ...
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/ Intel, Invictus Blog

The Shortfalls of Loan-Level CRE Stress Testing in a COVID-19 World

By Adam Mustafa, Invictus Group CEO The coronavirus has presented the first threat to community banks since the 2008 financial crisis.  For the first time, stress testing is a real exercise.  What community banks across the country are discovering with dread right now is that ...
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/ Intel, Invictus Blog

News Alert: Two out of Three Banks Say No to the Community Bank Leverage Ratio

Thanks, but no thanks: That’s the resounding message from community banks about the new community bank leverage ratio framework. Two out of every three banks chose not to opt into the new framework, according to an exclusive Invictus Group analysis of 4,672 first quarter 2020 ...
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When the Hypothetical is Now: The Importance of Pandemic Stress Testing

By Kamal Mustafa, Invictus Chairman After the 2008 Great Recession and prior to the coronavirus pandemic, regulators turned to stress testing to establish bank capital adequacy levels. The Federal Reserve established a program called the Comprehensive Capital Analysis and Review (CCAR) for the largest banks, ...
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/ Intel, Invictus Blog

Why Banks Need to Get Ahead of the COVID-19 Economy

By Leonard J. DeRoma, Invictus Group Director of Liquidity Analytics The one thing we know about the future economic impact of COVID-19 is that we do not know what it will be. The internal optimist in all of us hopes that the lockdowns start to ...
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/ Intel, Invictus Blog

Regression Depression: Uh Oh, Your Model is Wrong

COVID-19 has every bank thinking about how to modify its reserves. Some of the largest institutions have taken double-digit hits on that basis. Community banks, understandably, are uncertain about what exactly they should be doing to prepare their balance sheets for the upcoming environment. Naturally, ...
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/ Intel, Invictus Blog

How to Keep Your M&A Deals Alive During COVID-19

As the COVID-19 pandemic keeps the global economy in shackles, most community banks are not focused on strategic initiatives like M&A. However, there are two camps of banks that must think about M&A during the pandemic: those that completed deals in the last 6 to ...
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/ Intel, Invictus Blog

Beyond Loan Modifications and PPP: What Lenders Should be Doing with Vulnerable Borrowers

By Adam Mustafa, Invictus Group CEO During our recent COVID-19 stress testing webinar, I discussed how one of the primary goals of stress testing is to rank your loans based on their capital at risk as measured by the stress test.  Community banks can then ...
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/ Intel, Invictus Blog

Projecting Interest Income Needs New Approach in Pandemic Economy

COVID-19 may be as contagious economically as it is medically. Community banks, whose lifeblood is interest income, have significant exposure to companies that have been hit particularly hard. They face the question of how to best react as we sail into uncharted waters. Any forecasts ...
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/ Intel, Invictus Blog

Bankers Should Focus on Five Loan Characteristics to Assess Risk from COVID-19 Economy

Many community banks have been in touch with their borrowers to assess their financial condition during this precarious economic environment. Bankers are also segmenting their portfolios based on some of the most affected industries, including restaurants, hotels, retail, manufacturing, and others. But there are other ...
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/ Intel, Invictus Blog