2015 synergy training catalog

Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Relevant. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Experienced. Trusted. Knowledge. Innovative. Relevant. Effective. Trusted.

Experienced.Knowledge. Innovative.

Relevant. Effective. Trusted.

Experienced. Knowledge. Innovative.

Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Experienced. Trusted. Effective. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Effective. Relevant. Effective. Trusted. Experienced.Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Relevant. Effective. Trusted. Experienced. Knowledge. Innovative. Effective. Innovative. Relevant. Effective. Trusted. Experienced.

TaIloREd TRaInIng foR fInancIal InsTITuTIons

“Ancin’s demeanor is upbeat and easy to listen to, not what you might

expect from the stereotypical examiner personality. He presents information in

a way that is easy to grasp for those with all levels of experience. He is

a speaker my colleagues enjoy listening to and learning from—

I definitely recommend Ancin.”

lisa HeltonVice President, Prairie national Bank

The advisory firm

financial institutions trust

to manage risk and

optimize performance.

foR moRE InfoRmaTIon, VIsIT www.synBc.com

Just ask the many finance professionals who turn to synergy for training that is dynamic, relevant and effective. from our experience as accountants, attorneys, appraisers, auditors, workout experts and former bank examiners, we truly know what it’s like to hit the ground running in your shoes. That’s why attendees frequently give synergy the highest marks on their course evaluations.

we believe success in training often comes down to effective communication. synergy differentiates its training experience by taking complicated content and communicating it in ways that are clear, compelling and, sometimes, comedic. It’s a combination that is hard to beat for professionals trying to stay competitive in this tough environment.

so, when you’re looking for tried-and-true trainings that may be tailored for your next conference, seminar or workshop, I hope you’ll consider synergy for your professional development needs.

sEE you on THE couRsE.

ancin cooleyPrincipalsynergy Bank consulting, Inc.

Hurd

le jum

ping.

sprin

ti ng ahead. Knowing the course. competi ng today is no easy feat.

yET, wE all PERfoRm BETTER wITH TRaInIng.

PROFESSIONAL REFERENCES

Tracy M. Mcquinn Education and Events Community Bankers Association of IllinoisSpringfield, IL 217.529.2265

Katharine C. GarnerCommunity Bankers Association of VARichmond, VA 804.673.8250

TMarcy Bourgeois Manuel Education Coordinator Louisiana Bankers Association225-214-4831

Brian J. Hoffman Vice President Financial Education Services (FES) & Preferred Products Illinois Bankers Association Phone: 217-789-9340

ancincooley

Oval

ALLL for the Non-Accountant

Appraisals for the Non-Appraiser

Credit Risk Management for CFOs

Developing Your TDR Identification and Management Process

Global Cash Flow Analysis for Community Banks

Loan Reviewer for a Day

Optimizing Your Loan Review Process

Project Management for Financial Institutions

Review, React, Remediate: A Framework for Responding to Problem Loans

Seven Habits of Highly Effective Audit Committees

Seven Habits of Highly Effective Loan Committees

Stress Testing 101 for Community Banks

What Your Board Packet Is Really Telling You

Instructor Profile

Synergy At-A-Glance

TABLE OF CONTENTS

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18-19

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VALuE FOR ATTENDEES

Knowing the fundamentals of the appraisal process is critical to successfully managing the real estate lending process. This course not only takes participants ‘back to basics’ to refresh their understanding of appraisal principles, it offers insight about what’s on the horizon and how your institution can gain value from the appraisal process beyond just going through the motions of fulfilling regulatory requirements.

WHO SHOuLD ATTEND

consumer lenders, mortgage Bankers, Private Bankers, small Business lenders, commercial lenders, credit analysts, loan Review specialists, special assets officers, lending managers and credit officers.

SYNERGY SESSION HIGHLIGHTS

Conference session or half-day seminar. Key topics addressed include:

• overview of the appraisal process

• closer look at appraisal review: more than just checking the boxes

• Techniques for identifying appraisal deficiencies

• overview of the updated appraisal and evaluation guidelines

• Three steps to improve your appraisal management process today

APPRAISALS FOR THENON-APPRAISER

FOR MORE INFORMATION PLEASE VISIT WWW.SYNBC.COM

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VALuE FOR ATTENDEES

with problem loans increasing, profits sagging, and new capital hard to find, getting the allowance for loan and lease losses (alll) right is more important than ever. learn what you need to know now in this comprehensive course designed for the non-accountant.

WHO SHOuLD ATTEND

cEos, Board members, credit administrators, senior credit officers, loan Review officers, compliance officers, senior loan officers, loan operation officers and loan administrators.


Conference or half-day seminar. Through engaging content tailored for the non-accountant, segments of the course include:

• Background and review of 2006 Interagency Policy statement as well as recent regulatory developments

• The alll: let’s make it Plain: addresses asc 450, (formerly sfas 5), historical loss data, qualitative factors (“Q-factors”), asc 310

(formerly sfas 114), identifying loans and measuring impairment

• Pulling it alll Together: covers documentation, historical loss data and peer data

• garbage In – garbage out: explains why a strong loan review process is important to your alll and the key components and benefits of a strong loan review process

• frequently asked alll questions

ALLL FOR THE NON-ACCOuNTANT

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VALuE FOR ATTENDEES

There is a plethora of information about troubled debt restructures (TdRs) floating around in various places. However, there are very few places where you can find insights on how to properly implement and manage your TdRs. In this session, we will take your understanding of TdR a step further and discuss various identification and implementation strategies.

WHO SHOuLD ATTEND

chief financial officers, chief credit officers, controllers, and other personnel from financial reporting and credit risk management.


Conference session or half-day seminar. with extensive experience from years spent helping creditors implement an approach to TdR, course highlights include:

• address how a formal TdR program will affect your earnings and current problem management processes

• gain the knowledge needed to ensure your institution is accounting for TdR appropriately

• understand the relationship between TdRs and your alll

• address the common TdR questions

• Provide policies, procedures, and process maps that you can implement

DEVELOPING YOuR TDR IDENTIFICATION AND MANAGEMENT PROCESS

“We came away with not only a better understanding of how

to identify a TDR, but were given the tools needed to better manage these types of credits.”

laurie m. Burkholdercommercial loan officer, IH mississippi Valley credit union


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VALuE FOR ATTENDEES

cfos constantly grapple with an endless barrage of new regulatory credit risk management requirements. The additional costs of addressing these mandates present a concern as loan growth slows. In this session, participants will learn how financial institutions are responding to these changes without weakening operational effectiveness. we will provide a framework that enables management to develop a credit culture that will permit risk to be managed in a cost effective and efficient manner. we will also facilitate an open discussion to allow for benchmarking best practices with peers.

WHO SHOuLD ATTEND

chief financial officers, controllers, cashiers and Treasurers.


Conference session or half-day seminar. synergy offers pragmatic tactics and best practices for managing credit risk. course topics include:

• discuss the interdependency of traditional risk disciplines and credit management

• understand how to effectively integrate new risk management controls

• discuss new technologies to identify, quantify, and monitor your credit risk exposure

• Identify and monitor emerging regulatory credit risks on the horizon

cfos will leave with an understanding of the benefits gained from reducing exposure to this risk and implementing these routine practices within their institution.

CREDIT RISk MANAGEMENTFOR CFOs

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VALuE FOR ATTENDEES

This introductory session is ideal for learning the fundamentals of the loan review process, a key component of your credit risk management program. Participants will learn through a mix of practical instruction, case studies and role playing, leaving with a better understanding about how to detect weakness and support their institution’s loan review process.

WHO SHOuLD ATTEND

loan officers, credit analysts, loan administrators, cfos and loan committee members.


Half or full-day seminar. Participants will learn how to:

• Identify key elements of a loan review system

• Recognize the ideal frequency, scope and depth of reviews

• analyze a credit facility

• Identify and classify potential credit weaknesses

• Prepare for and conduct a loan discussion

• assign an appropriate loan classification/disposition

• Prepare an appropriate loan write-up

• Identify administration weaknesses on individual loans

• Practice through interactive case studies

LOAN REVIEWERFOR A DAY

“I engaged Synergy to provide training for lending and

credit personnel at my institution and it was relevant, timely, and comprehensive.

The feedback I received was overwhelmingly positive.”

Brian Hawes, chief credit officer, Resource Bank n.a.


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VALuE FOR ATTENDEES

successful banks and lenders must maintain their understanding of how to calculate and interpret global cash flow. This seminar efficiently and effectively provides a substantive refresher of global cash flow for experienced lenders and a comprehensive introduction for those new to lending operations.

WHO SHOuLD ATTEND

cfos, cEos, loan officers, senior lenders, loan Reviewers and credit analysts.


Conference session or half-day seminar. This seminar is for lenders who need to refresh their understanding of global cash flow analysis. Participants will learn:

• why personal tax returns can be difficult to analyze and how to target relevant information consistently

• The most frequent applications of global cash flow

• Proper techniques of developing global cash flow

• Pros and cons (strengths and weaknesses) of global cash flow

• How to avoid double-counting income

GLOBAL CASH FLOW ANALYSIS FOR COMMuNITY BANkS

VALuE FOR ATTENDEES

Poor project management can cost financial institutions wasted time, money, and resources. Precise execution of projects and programs is imperative to cost containment, sustainability, growth, and profitability. This seminar uses relevant and timely project examples, such as fixing regulatory findings and implementing regulatory changes, and helps participants strengthen their project management competency.

WHO SHOuLD ATTEND

senior management, Internal auditor/loan Review, Human Resources, “accidental” project managers, individuals from any area of your bank who contribute to projects, and managers responsible for projects.


Conference session, half or full-day seminar. upon completion, participants will:

• Know the purpose and process of project management

• learn how to create project teams that can quickly address regulatory findings

• Ensure that your projects are set-up for success from the start

• develop an integrated project plan including realistic scope, schedules, budgets, and risks—and turn that plan into successful action

• learn how to effectively track and report on project progress

• learn how to improve your appraisal management, alll, and TdR processes

PROjECT MANAGEMENTFOR FINANCIAL INSTITuTIONS

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VALuE FOR ATTENDEES

loan review is a key component of your bank’s credit risk management program and your loan review process serves as an early warning system. although, no one can predict exam findings, a strong loan review process enables management to proactively address weakness in the various levels of an institution’s credit initiation, underwriting, and classification. In this seminar, we outline the common loan review shortfalls and provide best practices to enhance your program.

WHO SHOuLD ATTEND

loan Review officers, credit analysts, compliance officers and other personnel involved in the loan review system.


Half or full-day seminar. Through role playing, case studies and other dynamic content, synergy addresses all the key elements of an effectiveloan review system, including:

• Regulatory perspectives about loan review

• The expanding role of loan review

• common mistakes, including: improper segregation of duties; improper frequency; scope and depth of reviews; ineffective communication; incorrect risk rating assigned to credit facility; insufficient analysis to support the risk rating

• Recommended best practices, including: Effective Targeted Reviews; accuracy and timeliness of risk grade, including nPa, impairment, TdR, charge-off status; involvement in the workout process and

decisions impacting alll; entity level reviews of centralized functions (e.g. appraisal, workout, oREo); loan review’s role during a regulatory exam

OPTIMIzING YOuR LOAN REVIEW PROCESS

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SEVEN HABITS OF HIGHLY EFFECTIVE AuDIT COMMITTEES

VALuE FOR ATTENDEES

The audit committee sets the ‘tone at the top’ for risk management in your institution, but staying current on new regulations and legislation can be daunting. audit committee members will learn key strategies for cultivating a responsible risk management culture and how to get the most value from their audit and auditor relationships.

WHO SHOuLD ATTEND

audit committee members, Board members, cfos, compliance officers, other senior finance and legal personnel responsible for risk management and financial reporting.


Conference session, half or full-day seminar. synergy shares practical knowledge gained from working with audit committees as both auditor and risk management advisor. This course provides audit committee members with practical guidance to perform more effectively. Topics include:

• The purpose, roles and behaviors of an effective audit committee

• Ensuring a comprehensive audit planning process

• communicating effectively with management, auditors and regulators

• applying project management techniques to correct audit and regulatory findings

• Establishing quality control processes

• current regulatory hot buttons


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VALuE FOR ATTENDEES

a clear, concise, and organized approach to dealing with problem loans is essential to minimizing credit risk. This session will provide you with the conceptual framework and templates needed to identify and develop a plan to remediate or exit problem relationships. This session provides real-time, pertinent information based on actual experiences that help institutions prepare for their next regulatory exam. The discussion includes: TdRs, appraisal processes, nonaccruals, and impairments.

WHO SHOuLD ATTEND

loan officers, workout specialists, loan Reviewers, loan administrators, and other personnel involved in portfolio management.


Conference session or half-day seminar. using helpful case studies and examples from first-hand experience as a former loan examiner, participants will learn:

• a trusted framework for problem loan management

• Various loan workout strategies and impairment calculations

• ways to reduce regulatory scrutiny by implementing consistent workout and risk management processes

• How to implement a TdR process specific to the institution’s needs and considerations for optimizing an effective loan review system

REVIEW, REACT, REMEDIATE: A FRAMEWORk FOR RESPONDING TO PROBLEM LOANS

“I have attended multiple loan related training sessions presented by

Ancin Cooley. With his experience as a previous examiner, he presents pertinent material that regulators

specifically look for and shares what he has seen first hand.”

lisa Helton, Vice President, Prairie national Bank

VALuE FOR ATTENDEES

as regulators place greater emphasis on risk management frameworks and overall corporate governance, proactive community bank leaders employ stress testing methods to evaluate the impact of key risk factors, such as increased credit losses, declines in collateral values, illiquid markets, and strains on liquidity. Therefore, bank leaders should evaluate a variety of ‘what-if’ scenarios to understand the potential risks in their institutions.

WHO SHOuLD ATTEND

cfos, cEos, loan officers, senior lenders, loan Reviewers and credit analysts.


Conference session. In this session we will:

• define stress testing and examine the pros and cons of different stress testing methods

• Identify practical implementation techniques and best practices

• determine how to properly analyze the output from a stress testing model to determine your risk appetite and integrate into your strategic planning framework

• Effectively communicate results to management and the board

• Explore the challenges of developing a stress testing program including incorporating results into managing the bank

• develop a checklist with takeaways for immediate application at your institution

STRESS TESTING 101 FOR COMMuNITY BANkS

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SEVEN HABITS OF HIGHLY EFFECTIVE LOAN COMMITTEES

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VALuE FOR ATTENDEES

The purpose of the loan committee is to oversee the lending and credit risk management strategies of the institution. This course helps loan committee members hone key habits that will help them perform and fulfill their duties with ease and confidence.

WHO SHOuLD ATTEND

loan committee members, Board members, cEos, senior lenders, commercial lenders.


Conference session, half or full-day seminar. synergy provides loan committee members with a strong understanding of how to increase their effectiveness through the following topics:

• The purpose of the loan committee

• Elements of an effective charter

• maintaining a safe and sound “credit culture”

• obtaining and capturing meaningful information for reviewing loan requests

• looking ahead: what to keep on your radar

synergy is also able to customize aspects of the training content to address the unique needs of your institution.

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mr. ancin cooley, cIa, cIsa, is the founder and Principal of synergy Bank consulting, Inc., the advisory firm financial institutions trust to optimize their risk management processes and business performance.

Through synergy, ancin provides a suite of risk management services, including loan reviews, information technology audits, internal audits, directors’ exams, and regulatory compliance reviews.

ancin brings deep, first-hand experience gained from working for the office of the comptroller of the currency (occ) as an examiner. during his tenure at the occ, he performed safety and soundness examinations at community and mid-size banks that ranged from $100 million to $8 billion dollars in total assets. after leaving the occ, ancin worked for a regional accounting firm where he led loan reviews and internal audits.

when not advising clients, training for triathlons, or hanging out with his young son, ancin designs and conducts trainings for financial institutions.

Education & Associations

• master of accounting and financial management, Keller graduate school

• Bachelor of science, Business, morehouse college

• member of the Risk management association, appraisal Institute, Institute of Internal auditors, and

Information systems audit control association

INSTRuCTOR PROFILE

ANCIN COOLEY, CIA, CISA


16

VALuE FOR ATTENDEES

Board Reports help directors assess their bank’s condition and determine if the level of risk taken by the bank conforms to the board’s policies and risk appetite. To understand the true picture, directors must ask the right questions and be able to look at the trend and level of individual measures, and the inter relationships among capital, asset quality, earnings, liquidity, market risk, and balance sheet growth—all key focuses of this course.

WHO SHOuLD ATTEND

Board members.


Conference session, half or full-day seminar. segments include:

• director liability: understanding your bank’s risks

• details…details: your committee minutes

• are you getting the right reports? Is less really more?

• loan committee Best Practices, including loan approvals, watch Reports, and exceptions tracking

• asset/liability committee Best Practices, including liquidity reports, IRR model reports, and appropriate oversight

• audit committee Best Practices, including internal audit reports, loan Review Reports, and examination findings

• critical conversations with management

• case studies with mock loan committee, audit committee, alco, and Post-Exam meetings

• what Board Reports won’t tell you

WHAT YOuR BOARD PACkET IS REALLY TELLING YOu

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OuR CLIENTS

synergy serves dynamic financial institutions across the united states, primarily focusing on community banks, credit unions, and thrifts in the midwest and southern regions. synergy also collaborates with industry associations to provide educational opportunities for their members. References available upon request.

SuITE OF SERVICES

our multi-disciplined approach combines the expertise of attorneys, workout specialists, appraisers, IT and compliance auditors. we handpick teams to meet your needs. a former bank examiner leads and manages all services to ensure solutions are communicated with a regulatory perspective in mind.

SYNERGY AT-A-GLANCE

Risk Management• loan Reviews

• alll Process Improvement

• outsourced credit analysis

• Problem loan management

• Internal audit

• IT audit

• Exam Preparation

• appraisal Review

Performance Improvement• Process Improvement

• Project management

Compliance• compliance Reviews & Bank

secrecy act (Bsa)

• loss share compliance

Professional Development • skill building for finance professionals involved in all

aspects of risk management

• specialized courses for Board of directors, loan and audit

committee members, cfos, compliance personnel and non-accountants

foR moRE InfoRmaTIon, VIsIT www.synBc.com

18

THE SYNERGY DIFFERENCE

synergy Bank consulting, Inc. (synergy) is the independently owned advisory firm financial institutions trust to optimize their risk management processes and business performance.

Convenient connection point to credible resourcessynergy takes an innovative approach to traditional risk management. we believe better results come through synergy—that’s why we bring together only veteran, industry specialists who work collaboratively with our clients.

from attorneys to appraisers to auditors, from workout experts to former bank examiners—they’re all in our think tank and ready to collaborate. whether you’re a community bank, credit union, thrift, or industry association, the synergy model readily connects you with expertise that is current, comprehensive, and credible.

BankingStrategies

April 16, 2013By Ancin Cooley & Ed BayerPublished online at www.bai.com

The causes of the recent financial crisis are well known – the tremendous expansion of subprime mortgages and their prolif-eration through the international financial system via securi-tization, for example. Yet, when one considers the number of bank defaults since 2008, the question presents itself: couldn’t these institutions have reduced their chance of failure by using a well-developed early detection system such as stronger loan review practices?

The obvious answer is, yes; if these financial institutions had implemented a more robust loan review system, the risks in their portfolio would have been on their “radar” and this defen-sive tactic would have allowed them to make proactive course corrections to avoid complete collapse.

Here are three key weaknesses that must be fixed in order for loan review practices to be more effective:

Improper Segregation of Duties. As a best practice, your internal auditor or audit committee should implement a loan review function, whether establishing an internal committee or outsourcing the function to an outside firm who specializes in loan review. However, at many banks, the loan review person-nel (whether external or internal) reports to the senior lender. This creates an independence issue, as the senior lender is responsible for the portfolio and the loan review personnel is tasked with making an objective assessment of the portfolio’s quality. It is imperative that your loan review personnel is able to communicate important findings and risk rating changes directly to the internal audit function or audit committee to ensure clear and objective updates of the status of the loan portfolio.

Improper Scope, and Depth of Reviews. Your institution is unique and so is your risk; your distinct needs and specifica-tions should drive the scope and depth of your loan review. Although it’s important for your loan review personnel to review your 10 largest loans every year, you aren’t getting your money’s worth if they don’t drill down deeper. As best practice, the scope should be driven by the composition of your portfolio. For example, if in 2012 a financial institu-tion decided to expand their commercial and industrial (C&I) lending, the loan review function should in turn take a larger sample of those C&I loans to ensure these loans are being underwriting in a safe and sound manner.

Assigning Incorrect Risk Ratings to Credit Facility. Loan reviewers are only human and none are correct 100% of the time. Even the phrase “correct risk rating” is subjective in and of itself at times. This means that, in all cases, the prudent approach is to ensure the reviewer supports their conclusions with a detailed analysis of both the primary and secondary sources of repayment as well as the collateral.

Of course, the best way to keep these and other practices front and center on your radar is by using a properly designed loan review process to help limit and identify problem loans. If you already have a process in place, remember to routinely recalibrate and rethink your loan review function to ensure the scope of reviews match your credit concentrations. Your review process should remain in tune with conditions in the market and you should customize it to address specific areas of risk in your portfolio.

When managing credit and regulatory risk, you don’t know what you don’t know. Put knowledge on your side by choos-ing a defensive, preventive strategy like loan review and avoid getting blindsided by the risks not on your radar.

The Early Warning Radar of Loan Review

To avoid getting blindsided by unexpected risks, financial institutions need a loan review system that properly segregates responsibilities and provides the appropriate level of depth.

Mr. Cooley is a principal of Synergy Bank Consulting Inc., a risk management advisory firm based in Chicago, IL., and can be reached at [email protected]. Mr. Bayer is risk management consultant for Sageworks, a financial information company and

software provider in Raleigh, N.C. and can be reached at [email protected].

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Stress-testing Clarity for Community Banks

BY MARY ELLEN BIERY

.S. community banks have gotten some much-needed regulatory clarity on how to examine the stability and soundness of their loan portfolios in tougher times.

And that clarity from federal banking officials could reduce some of the tension associated with the so-called stress tests, experts say. “The main concern banks have had on this topic is the lack of transparency behind the stress testing process,” said Shea Dittrich, director of business development for financial markets at Sageworks Inc. “This guidance gives community banks more direction on where to start their own stress testing, and it reduces the level of ambiguity we were hearing about from banks.” Indeed, Dittrich said, the Office of the Comptroller of

the Currency seemed to understand that even bank examiners had varying expectations among themselves regarding community bank stress testing. “This guidance goes a long way in addressing that,” he said. The OCC in its Oct. 18 guidance emphasized that national banks and federal savings associations with $10 billion or less in assets should

begin their evaluations with a simple stress test of their loan portfolio, and the

regulators said the test should be conducted at least annually. The OCC also recommended that banks stress test at the individual loan level and on credit concentrations of concern, such as commercial real estate. “For example, a review by senior management may reveal two or three key concentrations in the loan portfolio, such as loans dependent on a type of

agribusiness, loans with construction-related risks, long-term fixed rate municipal securities, commercial mortgage loans dependent on local market values, or consumer residential loans,” the OCC said. “Selecting the appropriate factors to stress depends on the nature of the bank’s concentration risk.” The OCC also said banks should consider at least a two-year projection in their stress-test scenarios “because, in any given credit cycle, losses generally emerge over a two-year period following the downturn.” When properly integrated into a bank’s strategic-planning process and credit culture, stress testing can help community bankers better understand their own risk appetite and can identify concentrations of loans that pose a risk to the bank’s earnings and capital, said Ancin Cooley, principal of Elgin, Illinois,-based Synergy Bank Consulting Inc., and a Sageworks strategic partner. Cooley likened the banks’ tests to a stress test he recently received as part of his routine physical. “I felt fine but, guess what? I learned you can’t see everything from the surface,” he said. “I found out my cholesterol was high. I thought I was pretty fit. Armed with this knowledge I decided to change my ‘appetite’ for certain foods.” “Imagine if a financial institution in late 2008 stress tested their loan portfolio, and the bank realized that a 20% decline in commercial real estate values would have a significant impact on their earnings and capital,” he said. Do you think that this bank might

OCTOBER 24 ! 2012 ONLINE EDITION

Contributor

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have changed its ‘risk appetite?’ ” The OCC said in a press release that analyzing the potential impact of adverse outcomes on banks’ financial conditions should also help institutions “set concentration limits, adjust strategies, and appropriately plan for and maintain adequate capital level.” Bank-related stress testing gained widespread attention in 2009 as regulators required the largest U.S. bank holding companies to undergo tests demonstrating their ability to maintain minimum capital requirements, even in the event of extreme economic conditions. But even before that, the FDIC in 2006 outlined guidance for institutions to conduct stress tests if 100 percent of their total capital was in loans tied to construction, development and other land deals, or if they had commercial real estate loans representing 300 percent or more of their risk-based capital. However, all banks regardless of size and loan make-up must stress test. The OCC stated in its Thursday guidance that “some form of stress testing or sensitivity analysis of loan portfolios on at least an annual basis is a key part of sound risk management for community banks. Community banks that have incorporated such concepts and analyses into their credit risk management and strategic and capital planning processes have demonstrated the ability to minimize the impact of negative market developments more effectively than those that did not use stress testing.” Dittrich said the guidance clarifies that a smaller bank is likely to have a less complex stress test than bigger banks, because the complexity of the loan portfolios are different. The OCC didn’t recommend one particular method for banks to conduct stress testing, but it outlined elements that will be common among stress tests it considers effective. According to the OCC bulletin, those include:

• Plausible “what if” questions about key vulnerabilities,

• Reasonable determinations of the impact the stressevent or factor might have on earnings and capital; and

• Incorporation of the stress test analysis into a bank’soverall risk management process, asset/liability strategies, and strategic and capital planning processes.

Community banks have had a lot of questions about exactly what bank examiners wanted as it related to stress testing, Dittrich said. “The community banks’ biggest problem hasn’t been that they have to stress test. It’s that there’s been little consistency behind the process and among examiners,” he said. “They come in and frequently have a different way they expect banks to put the stress tests together.”

“I can’t imagine there’s a bank out there that’s not extremely grateful that they have this transparency,” he said. Sageworks is a financial information company that provides risk management solutions to financial institutions.

FORBES"

THE SYNERGY DIFFERENCE

Synergy Bank Consulting, Inc. (Synergy) is the independently owned advisory firm financial institutions trust to optimize their risk management processes and business performance.

Convenient connection point to credible resources

Synergy takes an innovative approach to traditional risk management. We believe better results come through synergy—that’s why we bring together only veteran, industry specialists who work collaboratively with our clients.

From attorneys to appraisers to auditors, from workout experts to former bank examiners—they’re all in our think tank and ready to collaborate. Whether you’re a community bank, credit union, thrift, or industry association, the Synergy model readily connects you with expertise that is current, comprehensive, and credible.

SUITE OF SERVICES

Our multi-disciplined approach combines the expertise of attorneys, workout specialists, appraisers, IT and compliance auditors. We handpick teams to meet your needs. A former bank examiner leads and manages all services to ensure solutions are communicated with a regulatory perspective in mind.

Risk Management• Loan Reviews• ALLL Process Improvement• Credit Analysis Support• Problem Loan Management• Internal Audit• IT Audit• Exam Preparation• Appraisal Review

Performance Improvement• Process Improvement• Project Management

Compliance• Compliance Reviews &

Bank Secrecy Act (BSA)• Loss Share Compliance

Professional Development • Skill building for finance professionals involved in all

aspects of risk management• Specialized courses for Board of Directors, Loan and Audit Committee

members, CFOs, compliance personnel and non-accountants

OUR CLIENTS

Synergy serves dynamic financial institutions across the United States, primarily focusing on community banks, credit unions, and thrifts in the Midwest and Southern regions. Synergy also collaborates with industry associations to provide educational opportunities for their members. References available upon request.

ANCIN COOLEY, CIA, CISA

SYNERGYAT-A-GLANCE

Effective. Trusted. Experienced. Knowledge. Innovative.

Ancin Cooley, CIA, CISA, is the Founder and Principal of Synergy Bank Consulting, Inc. Synergy provides a range of risk man-agement services to financial instiutions, which include loan reviews, IT audits, internal audits, directors’ exams and regula-tory compliance reviews. As principal, Ancin manages a growing portfolio of clients throughout the United States.

He brings more than 10 years of experience to the industry. Ancin honed his skills while working as an examiner for the Office of the Comptroller of the Currency (OCC). At the OCC, he performed safety and soundness examinations for community and mid-size banks ranging from $100 million to $8 billion in total assets. After leaving the OCC, Ancin worked for a regiona-laccounting firm where he led internal audits, as well as loan and pre-regulatory examiner reviews.

When not advising clients, training for triathlons, or spending time with his family, Ancin designs and conducts trainings for the banking industry. In addition, he is a well sought-after expert contributor to a host of financial publications. He has most recently been featured in Forbes Magazine and the Independent Banker.

Ancin holds a Masters of Accounting and Financial Management degree from Keller Graduate School and received a Bachelor of Science in Business from Morehouse College.

AssociationsRisk Management Association (RMA)Appraisal Institute, Institute of Internal Auditors (IIA)Information Systems Audit Control Association (ISACA)

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©2012 synergy Bank consulting, Inc.

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Documents

2015 synergy training catalog