Pandemic Stress Testing Can Be an Investment with a Huge ROI
By Adam Mustafa, Invictus Group CEO With the right approach, the potential Return on Investment (ROI) from pandemic stress testing is quite significant. Most community banks treat stress testing as a check-the-box exercise when they should be viewing it as a strategic one. As a ...
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M&A Hunting Season: Why the Pandemic is a Perfect Time to Target Acquisitions
By Adam Mustafa, Invictus Group CEO As crazy as it sounds, now is an ideal time to be on the M&A hunt for community banks. It comes down to supply and demand. The supply of willing sellers is likely to increase as management teams and ...
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Tough Exams During COVID-19: One Bank’s Saga of Loan Downgrades and Stress Tests
Kelly Barclay, President and CEO of Ozona National Bank in Texas, wasn’t expecting an aggressive safety and soundness exam last month in relation to COVID-19 economic issues. As a member of the Dallas Federal Reserve Bank board and a director of the Independent Bankers of ...
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Forget Loan Categories: The New Way to Look at Post-Pandemic Community Banking
By Kamal Mustafa, Invictus Group Chairman The pandemic has upended the very nature of community banking. This change requires a new way of strategic thinking, which we explain in this article. Banks that fail to adopt to the new environment will end up at a ...
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Q2 Loan Loss Reserve Analysis: Download Free Tool to Find Out Where Your Bank Stands
By Adam Mustafa, Invictus Group CEO There is no single line item in bank financial statements getting more attention these days than the loan loss reserve, due to both CECL and COVID-19. With the second quarter of 2020 now in the books, we decided to ...
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Top-Down Stress Testing: The Poisonous Placebo
By Adam Mustafa, Invictus Group CEO Community banks that take a “top-down” approach toward stress testing are taking the equivalent of a placebo when it comes to assessing how ready they are if the pandemic triggers a severe and protracted economic downturn. Placebos are cheap ...
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Dealing with a Critical Bank Exam: A Case Study in Using the Right Tool for the Job
As the coronavirus financial fallout continues, many community bank executives may soon be dealing with tough safety and soundness exams. That was the situation in 2018 for Middlefield Bank, a $1.3 billion Ohio institution. “We had to meet the FDIC’s demands,” recalled John Lane, EVP ...
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If Your Capital Plan is Missing this Metric, It’s Broken and Needs to be Fixed Now
By Adam Mustafa, Invictus Group CEO Regulators have made it clear in recent guidance: As the economic fallout from the coronavirus continues, capital plans will be under the microscope at your next exam. And while most community banks have a capital plan, way too many ...
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CECL vs COVID: Q1 Data Reveals What Drove Loan Loss Reserves for Publicly Traded Banks
By Adam Mustafa and Sonny Capone, Invictus Group Let’s face it: Publicly traded banks that implemented the new current expected credit losses (CECL) accounting standard during the COVID-19 pandemic faced a huge set of challenges. But what really drove their decisions about how much to ...
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Read Between the Lines July 2020
What Community Banks Need to Know about Regulatory Actions Regulators Want Stress Tests to Account for Changing Conditions If your bank isn’t adjusting its stress tests to reflect for the changing COVID-19 environment, expect to come under increased regulatory scrutiny. The Office of the Comptroller ...
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