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credit risk
Whitepapers
A guide to help you manage credit risk using four strategies. Learn about the benefits and tips of credit stress testing your loan portfolio seamlessly.
With recent market downturns, interest rate fluctuations, and even liquidity issues, stress testing can allow you to identify potential risk in your portfolio and the impact on earnings, liquidity, and capital. Where do you start? Checkout this paper that offers 6 stress testing tips to see the possible risks in your portfolio and the impact on earnings, liquidity and capital.
Some community financial institutions may not know the benefits of interest rate swaps. Not only do they help you manage interest rate risk, but they also help you retain customers. Your customers want fixed rates, especially as rates rise. You can help them with interest rate swaps — and you gain noninterest income too. We explain how.
Bankers have long been waiting for interest rates to increase so that net interest margins would rise. Yet, there are other factors in play today, such as high inflation, labor shortages, and credit risk. We review the current rising rate landscape and provide approaches to manage through it successfully.
The federal eviction moratorium has ended, which gives landlords more control over their income flow. Yet, the situation is still complicated for landlords and the community financial institutions that lend to them. We explore the economic landscape and provide three strategies for lenders to use with their landlord customers.
According to one estimate, tenants now owe more than $70B in back rent and utility bills and are on average nearly four months behind on rent. While the recovery seems to be gathering steam, how can community financial institutions help their landlord clients stay on track? We provide four ways: defer payments, obtain federal assistance, provide short-term loans, and educate landlords.
Peak oil, where demand and production stop rising and start to decline, may begin in the next few years. Even though many community financial institutions are not directly lending to oil producers, they could still be affected. Three areas where they should keep watch: in the oil patch, near the oil patch, and around oil industry-impacted businesses.
As you work with your customers during these tough times, we have five strategies that may help mitigate the credit crunch.
Risk managers have always been important at community financial institutions. However, the pandemic increased their responsibilities and made their roles even more pivotal. The top areas that are keeping these managers busier than ever include: enhanced risk modeling, cybersecurity & fraud, increased exposures through fintech partnerships, more regulation, and the evolving nature of the role itself.
A survey of senior credit risk executives revealed generative AI will impact 80% of credit risk assessments within two years. We discuss how generative AI can help CFIs manage credit risk.
This is the second part of our summary of the FDIC 2023 Risk Review. We take a closer look at the FDIC’s findings on potential credit risks for the banking industry and community financial institutions.
The Bank Supervision Operating Plan, published annually by the Office of the Comptroller of the Currency, can serve as a “cheat sheet” to help CFIs focus their compliance efforts in the right areas. Among the 13 areas identified by the 2023 operating plan, two are related directly to credit quality.
Trying to figure out how today’s balance sheet will respond to future events is more difficult than ever before. But, as the pandemic unevenly ends, this becomes critical. Test for volatility to anticipate structural weaknesses by examining the business model, back-testing for validity, and challenging assumptions.
The outlook for office loans is less than rosy. The US is set to have a glut of office space for a number of reasons, not the least of which is increased utilization of remote workers. For CFIs starting to experience stress in their office loan portfolio, we share several ways to mitigate potential problems.
As mortgage foreclosures begin to inch up and federal foreclosure moratoriums draw to a close, financial institutions should prepare themselves for a worst-case scenario. It’s unlikely that the bursting of the current real estate bubble will play out the way things did when the last couple of real estate bubbles burst. Should a worst-case scenario emerge, CFIs should be prepared to show regulators they took adequate precautions.
The US housing market has been red-hot for a good while. However, overvalued home prices, rising interest rates, and the growing number of home purchases by private equity firms mean that, for many financial institutions, the traditional mortgage business is shrinking. CFIs that want to compete in this space should market specifically to traditional homebuyers, and all CFIs should be aware of how this will impact the makeup of the communities they serve.
This year has seen record inflation, ongoing interest rate hikes, and economic recovery, followed by anxiety over a possible recession. In this first installment of our three-part review of 2022, we look at this turbulent market and how it has impacted lending.
While the economic recovery is not yet complete, there are some bright spots, including CRE. Certain sectors of CRE are showing strength, such as industrial, which has been outperforming other asset classes, according to the CRE Financial Council (CREFC) Board. We reveal other insights by the CREFC Board and the Fed while highlighting certain CRE opportunities found by community financial institutions.
As community banks look to millennials as future loan customers, they may need to rethink how they assess creditworthiness. We provide you with some thoughts here.
We are in "uncharted territory" in the economic cycle. Credit reminders for banks during this uncertain time.
In this second part of our summary of the FDIC 2022 Risk Review, we take a closer look at the FDIC’s findings on potential credit risks for the banking industry and community financial institutions. While credit conditions for banks have improved in 2021, we examine the increased credit risk in certain sectors and markets linked to pandemic-related challenges, rising inflation and the war in Ukraine.