Independent Banker - August 2023 - 44

methodology and how they would
capture everything. I'm glad we
didn't have to do this, because the
best practices seemed to shift to a
much simpler concept.
 Ryan Anderson: We didn't learn a
whole lot of new things about our
portfolio. CECL has reinforced
that we're comfortable with our
underwriting standards and the
risk we have in our loan and bond
portfolios. The methodology hasn't
changed how we view different
credits, but CECL has made us
take a deeper look at the securities
portfolio than we did before. We felt
very comfortable with the way we
have been analyzing the bonds we
purchase and with the credit risks
in our securities portfolio. CECL has
reaffirmed our credit position and
credit risk.
 Cameron Ohlendorf: We have been
preparing for CECL for a long time
and have adjusted our methodology
dozens of times over the years. This
is now first contact. It's live data and
live results. We're going to watch and
learn to see how our methodology
holds up to a real world that is very
different from the flat rates and
benign credit environment we were
testing in. While we have a system
we believe will work well for us,
we are also still on the lookout for
other types of data we can include to
further improve our model. My guess
is that five years from now, we'll be
including something we haven't even
contemplated yet into our everyday
CECL process.
Q: How have current economic
conditions changed the way you
think about your provision for
credit losses under CECL?
 Anderson: To be honest, these
conditions haven't really changed the
way we look at credit losses under
CECL. We have always operated
EVEN THOUGH
ECONOMIC
CONDITIONS
HAVE CHANGED, MY
ROLE AS A BANK CFO
HASN'T NECESSARILY
CHANGED. THE LEVERS
AND THE MECHANISMS
WE'RE WORKING
WITH NOW ARE
JUST DIFFERENT. "
-RYAN ANDERSON, THE FOUNTAIN TRUST COMPANY
under the ALLL (Allowance for Loan
and Lease Losses) or CECL model,
using a conservative approach. We
have always taken into account lowprobability
scenarios that would have
a detrimentally high impact on the
bank. The current conditions aren't
great for banks, but we have taken
steps to fortify our balance sheet so
we're still positioned to do well even
in these odd economic times.
 Ohlendorf: We have a standing
meeting where we talk about what
the loan portfolio looks like from
a loan loss perspective, how our
customers are feeling and how we
are working through troubled loans.
We have always done this, but now
we're doing it as part of CECL. It's
part of the conversation as we look
DID YOU KNOW?
55%
of banks think inflation
is likely to persist but
that they can manage
its challenges.
Source: CSBS
44 // ICBA Independent Banker // August 2023

Independent Banker - August 2023

Table of Contents for the Digital Edition of Independent Banker - August 2023

Contents
Independent Banker - August 2023 - Cover1
Independent Banker - August 2023 - Cover2
Independent Banker - August 2023 - Contents
Independent Banker - August 2023 - 2
Independent Banker - August 2023 - 3
Independent Banker - August 2023 - 4
Independent Banker - August 2023 - 5
Independent Banker - August 2023 - 6
Independent Banker - August 2023 - 7
Independent Banker - August 2023 - 8
Independent Banker - August 2023 - 9
Independent Banker - August 2023 - 10
Independent Banker - August 2023 - 11
Independent Banker - August 2023 - 12
Independent Banker - August 2023 - 13
Independent Banker - August 2023 - 14
Independent Banker - August 2023 - 15
Independent Banker - August 2023 - 16
Independent Banker - August 2023 - 17
Independent Banker - August 2023 - 18
Independent Banker - August 2023 - 19
Independent Banker - August 2023 - 20
Independent Banker - August 2023 - 21
Independent Banker - August 2023 - 22
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Independent Banker - August 2023 - 35
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Independent Banker - August 2023 - 37
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Independent Banker - August 2023 - 44
Independent Banker - August 2023 - 45
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