BancQuestions & Answers - Recently Updated Pages

BancQuestions & Answers

BankCEO — Fri, 01 Aug 2008 08:03:59 CDT

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Regulatory Matters

BankCEO — Fri, 01 Aug 2008 08:02:13 CDT

Bank examiners seem to be taking an ultra hard stance relative to loan classifications. Even performing loans are being negatively classified. Are you seeing this happen in your area? Are examiners being unreasonable? If this is happening, how has it impacted your bank?

Allowance for Loan and Lease Loss Calculations

BankCEO — Wed, 30 Jul 2008 12:50:47 CDT

BankCEO
Jul 23 2008, 10:18 PM EDT
The accounting rules and regulatory guidance sure leave a lot to be desired. They want an allowance that fully provides for all losses, but losses that have already occurred have already been written off. So now we do calculations based on past experience, rate or grade loans as if they were term papers, and come up with a number. There doesn't seem to be an room for an estimate to accommodate estimation errors. Two years ago, regulatory agencies were telling us our allowance was too high. Now they want us to add to it.

How are you dealing with these issues? What are you seeing from examiners? Have you been able to maintain the allowance at a reasonable level?