I recently finished reading a report published by Invictus Consulting Group, LLC, a bank management consulting firm located in NYC. The report touched upon 11 subject areas of interest to all bank CEOs and CFOs. I have created a three part posting to cover the critical takeaways I derived from the report.

• Part One: Regulatory, Compliance and Cybersecurity
• Part Two: Balance Sheet Risk Management
• Part Three: Board of Directors’ Topics

I encourage you to download their full report, 2016: A Regulatory Outlook. Invictus is doing some great work in the bank industry.

Part Three: Board of Directors’ Topics

Management and Board Issues:

• Management succession and retaining key staff is a key risk.
• Finding and keeping a qualified board of directors continues to be a challenge for community banks.
• FDIC is updating its video training series including topics such as vendor management and interest rate risk management. They are also putting together a new practical handbook for directors.
• Invictus references a few other resources and training programs: FDIC Director Resource Center; Federal Reserve’s Bank Directors Desktop; and Office of Comptroller of the Currency conducts works shops. BankBosun Note: ABA, ICBA, SNL and state banking associations offer conferences and workshops.
• A survey of community banks found that the hypothetical compliance cost could be $4.5 billion a year.

Strategic and Capital Planning:

• OCC will have specific focus on strategic planning, succession planning and capital needs planning.
• OCC has indicated that the development and implementation of a strategic plan will be its first supervisory priority.
• Take a look at FDIC’s Summer 2015 Supervisory Insights article written by the FDIC’s policy staff at the division of risk management supervision.
• OCC is recommending in their Fall 2015 Semiannual Risk Perspective publication a disciplined approach to identifying opportunities and measuring and managing risk.

Mergers and Acquisitions:

• There was only one new bank chartered in 2015
• As of the 3rd quarter 2015, 224 banks had merged.
• Pre-filing your proposed acquisition can speed up approval.
State and Fate of Community Banking is an interesting read, exploring the impact of the regulatory burden on industry consolidation from the Harvard Kennedy School. BankBosun Note: Stay tuned for a BankBosun podcast on this paper.

See Part One and Two for continued analysis of the Invictus Report.