Stress test success: Navigating the 2024 scenarios for community financial institutions

The OCC, FDIC, and Federal Reserve Board have released the hypothetical scenarios for their annual Dodd-Frank stress tests, which help ensure that large banks can lend to households and businesses even in a severe recession. How do the scenarios impact community financial institutions, and how can you use stress testing to your institution's benefit?

Join Zach Englert and Jacob Lowe as they discuss what the scenarios look like this year and how community banks and credit unions can leverage them to assess their internal risk management practices, inform capital planning and strategic decision-making, and communicate with regulators and investors.

Helpful links:
Blog: Capital stress testing: The Fed's scenarios can help smaller institutions
Webinar: Gauge your institution's risk from inflation: Planning ahead with stress testing
Podcast: Stressed out: How to sleep easier at night about your capital and risk levels 

Human trafficking – a form of modern slavery – is one of the fastest-growing criminal activities in the world, exploiting over 45 million people and generating an estimated $150 billion in profits each year. While global in reach, human trafficking also affects individuals, communities, and economies across the United States.

Join Brad Jeffery, founder of MADE FREE, and Heather Bellino, CEO of Texas Advocacy Project, as we discuss human trafficking’s consequences and what financial institutions can do to help identify and prevent it.

About Texas Advocacy Project: Texas Advocacy Project’s mission is to end dating and domestic violence, sexual assault, and stalking in Texas. TAP empowers survivors through free legal and social services and access to the justice system and advances prevention through public outreach and education. Our vision is that all Texans live free from abuse. In 2022, TAP provided legal services in 4,765 cases, serving 10,502 Texans. If you or someone you know needs help, call 800-374-HOPE or visit TexasAdvocacyProject.org. 

About MADE FREE: MADE FREE was designed to provide social reform, addressing the root cause of human trafficking and the need for sustainable, ethical jobs. To win the war on poverty, those who make fashion goods must make a livable wage. The MADE FREE model takes a holistic approach to sustainability, integrating ecological, social, and economic factors. Workers at MADE FREE create handcrafted pieces in a clean, team-based environment with a focus on quality over quality, giving consumers a chance to support sustainable change with their dollars.

Helpful links:

Blog: The Super Bowl and human trafficking: How financial institutions can help

Webinar: Human trafficking awareness: Detecting, reporting, and partnering

Whitepaper: Human trafficking red flags

The marijuana-related banking industry took major steps forward on September 27, 2023, when the Senate Committee passed the Secure and Fair Enforcement Regulation (SAFER) Banking Act after weeks of negotiations and revisions to reach a bipartisan agreement. The bill would secure access for marijuana-related businesses (MRBs) to financial institutions. Terri Luttrell and Michael O’Neill, aka “The Cannabis Banker,” join the podcast to discuss the future of the SAFER Banking Act and what it means for financial institutions. They’ll give predictions for marijuana’s de-scheduling, what to expect from regulators, and what banks can do to work safely with MRBs in the meantime.  

Helpful links: 

Blog: SAFER Banking Act passes Senate Banking Committee  

Webinar: Banking marijuana-related businesses  

Podcast: Ahead of the curve: A banker's podcast episode 3 - Cannabis lending - Abrigo 

The OCC issued it's Bank Supervision Operation Plan for 2024 and we take a look on at it on the latest episode of Ahead of the Curve. This plan outlines the OCC's priorities and objectives for the coming year and provides great insights on where to focus your financial institution's time.

In this episode,  Abrigo Advisor Zach Englert discusses his big takeaways specifically around liquidity risk, credit risk, and change management.

News Release - OCC Releases Bank Supervision Operating Plan for Fiscal Year 2024

Abrigo Advisory Services

Financial institutions all have one thing in common right now: an unprecedented rising rate environment that isn't going away anytime soon. Some have action plans in place to ensure capital and margin objectives are still achieved, but for many, this coming period represents a complete unknown, so they are not as prepared. Whether deposits are an issue or not right now, it is prudent to make sure you have the monitoring and strategies in place to react appropriately as things change.  

In this episode, Abrigo Senior Advisor Darryl Mataya discusses three steps your financial institution should take to prepare for the coming funding challenges ahead. 

In this podcast, we discuss: 

• What makes this environment an "unprecedented rate scenario" 
• Common mistakes financial institutions are making in their reactions 
• Key moves to ensure you are prepared for additional rate uncertainty 

Ag lenders have faced a whirlwind of events over the past few years. From government stimulus programs to sky-rocketing land values to record inflation, many financial institutions are struggling to get a handle on it all. However, with an eye on credit risk and an increase in loan demand expected on the horizon, profitability and growth are possible for institutions.

In this episode, Rob Newberry, former dairy farmer and Senior Advisor at Abrigo breaks down the overall agricultural lending landscape and provides practical advice on what ag-focused institutions should be doing to navigate rising rates, inflation, and more. 

In this podcast, we discuss: 

• The state of the agricultural lending landscape
• How the 1980s ag crisis compares to today and what lenders should being keeping an eye on
• Strategies to mitigate credit risk and how to identify problem loans early
• Opportunities ag-focused banks can use to stand out from the competition

For financial institutions across the country, commercial real estate (CRE) remains an area of high emphasis within the loan portfolio as they pursue growth. However,  with rising interest rates and inflation as well as the underlying impacts of the pandemic on office space, it’s important to keep an eye on the market and the inherent risks this type of lending presents.

In this episode, Matt Anderson from Trepp and Rob Newberry from Abrigo join to discuss how CRE is being impacted by the current economic conditions and to give some tips on what to keep in mind when lending in this space.

In this podcast, we discuss:

• The state of the CRE lending landscape
• Best practices related to management reporting and stress testing
• Current regulatory expectations, including climate and environmental

Financial institutions continue to face a rapidly changing geopolitical landscape and volatile economic environment. These top-of-mind concerns underscore the need for banks and credit unions to ensure they have enough capital to withstand a wide range of shocks. How can institutions make sure they have a comprehensive view of their risk? How do they plan for managing those risks should they emerge?

In this podcast we discuss:

• How to identify key vulnerabilities to market forces through stress testing
• How stress testing results can influence strategic and capital planning
• Key takeaways from regulatory guidance and recent stress testing scenarios

Learn about Abrigo's upcoming ThinkBIG Conference in this special bonus episode. With specific learning tracks for lending and credit risk, portfolio risk, and FinCrime, there is something for everyone.

The in-person conference happening in San Antonio, Texas, from May 23-26 will be full of opportunities to earn CPE credit, network with peers, and learn best practices!

Register now at https://www.abrigo.com/thinkbig/ and use the promo code POD50 for a discount on your ticket. Registration closes on May 1st, so don't wait!

Lending to and banking cannabis-related businesses is currently a hot topic among banking circles. With laws varying by state and the inherent risks associated with providing these services, many banks and credit unions are weighing whether to participate themselves. Ultimately, each institution will vary in its approach. However, there is no denying that this is a 'budding' industry that deserves serious consideration as a viable way to reach revenue goals.  

In this podcast, we discuss:

• The definitions of common terms and the specific laws that go along with them
• Direct vs. indirect cannabis lending and the associated risks
• How this type of lending can be a crucial revenue source for your FI