Pub. 5 2016 Issue 1

11 s p r i n g | 2016 b. Transactional data for Prepayment Speeds: The life of loan concept will certainly become one of the more challenging yet beneficial components of the Standard. As you think about the weighted average life of your portfolio cohorts, prepay- ment speeds and in turn duration will become very meaningful to the overall calculation. Hav- ing this granularity on your actual loan portfolio will benefit you in other areas as well, including your ALCO and pricing models. 2. Know the Standard: There will be plenty of opportuni- ties to get up to speed on the new standard once it is issued if you have not already been staying abreast. In addition, the FASB has developed a transition resource group (TRG) that will address implementation issues related to the standard. Rest assured, although there will be kinks to work out during implementation, there will certainly be tools available to assist. 3. Know the Impact: There have been many speeches and high level analyses to gather data on what the average impact for the transition to CECL might be. Some were performed two to three years ago when the standard was first drafted. These are certainly helpful data points: however, what is critical to know is what your impact will be so you can properly plan in advance of the implementation date. The Challenge—Let’s Make it our Standard It is my opinion that CECL at a minimum allows bankers the flexibility to build adjustments and forecasts that are rea- sonable and supportable to more fully address their concerns related to events impacting their portfolio, while at the same time addressing many of the themes outlined above. There is a unique opportunity to maximize the benefit of one of the most impactful standards the banking industry has seen in quite some time. Let’s make it our standard and help write the script. With more than 10 years of experience servicing financial institutions, William (Bill) J. Bossong, CPA, CBA has developed a great deal of expertise regarding the standards and operations of banks of all sizes. As a shareholder at Elliott Davis Decosimo, Bill leads the firm’s Financial Institutions Consulting Practice. His team spe- cializes in mergers and acquisitions, including due diligence, valuations and tools for data analytics used by banks. Bill’s team developed ValuCastTM, a proprietary solu- tion designed to assist banks with Day 1 and 2 accounting. To learn more about Bill’s team and how they can help you with the upcoming CECL Model, call 803-255-1497, visit www.el - liottdavis.com or email Bill at bill.bossong@elliottdavis.com . Your Guide Forward Atlanta | Charlotte | Miami | Raleigh | Richmond | Tampa | Washington D.C. cbh.com/financial G. Todd Batchelor, CPA Industry Leader, Partner Financial Services Industry Group tbatchelor@cbh.com 919.825.4264 Raleigh John T. Jobe V, CPA Partner, Financial Services Industry Group jjobe@cbh.com 804.673.5702 Richmond Find out how we can guide your bank forward F E A T U R E our workplace challenges must not be neglected. The chal- lenges highlighted by the Chairman above are ever-present and deserve our utmost engagement. VACB provides two crucial avenues of engagement for Virginia’s community bankers. To navigate through the ever-increasing web of laws and regulations, we provide top-notch training and numer- ous opportunities for peer exchange with other community bankers. And to reduce the weight of those burdensome laws and regulations, we provide outlets like the upcoming ICBA Washington Policy Summit for VACB bankers to advocate for right-sized regulation that will allow our banks to build our communities and our economy. Thank you for your continuing support of our education programs and our efforts in the nation’s capital. If you haven’t been taking part in our educational seminars and webinars, I hope you will. And it would be great to have you join our delegation to Washington in April. These are investments that will pay dividends. The challenges persist. Let your response to them be bold! President’s Message ...Continued from page 6