The first session featured a very informative Accounting Update presented by Brian Hecker, a Partner from the accounting firm of Crowe Horwath. Brian discussed the financial reporting aspects of several recently issued and currently effective Accounting Series Updates (ASUs). Brian emphasized the key concerns expressed by federal banking regulators primarily with respect to the Allowance for Loan Losses. He highlighted the financial reporting issues that are currently in the pipeline including financial instruments, leases and revenue recognition. Brian concluded by discussing several important SEC developments with suggestions for providing adequate financial statement disclosures.

George Millward, Managing Director from the Kafafian Group presented an expert financial and business planning session entitled Perspectives on Banking Strategy. George discussed the key financial ratios that determine profitability followed by a detailed overview of the current market conditions affecting bank performance. He effectively presented the key trends and challenges faced by the community banking industry including the economic and interest rate environments, capital management, the regulatory environment and risk management. He concluded by presenting the 2013 Community Bankers Survival Guide in which he summarized his recommendations for success.

A highly energetic asset/liability management program, Realities in the ALCO Process, was presented by David Koch, CEO from Farin Associates. David enumerated the top issues in ALCO today and the major concerns facing community bankers including continued margin compression, loan to asset ratios, interest rate risk exposure, demand deposit stability in a rising rate environment and when to use FHLB/Swap options.

David discussed a series of ALCO strategies recently observed whereby decisions are often based on poorly conceived “notions” of risk and without reliance on effective internal ALM modeling results. “Don’t hedge risk you don’t have” is David’s key take-away. He further cautioned that modeling ALM risks is no longer a “regulatory exercise”.

Coping with New Investment Guidelines was presented by Robert Pratt from Bloomberg. He discussed the key factors that the OCC and the FDIC are expecting in terms of due diligence for investments. He summarized current market conditions and noted the considerations for investing in mortgage-backed securities. Robert explained that interest rates are lower this year despite the improving economy and although foreclosure rates remain high, the foreclosure rate is beginning to fall. Robert noted that interest rates are currently at historic lows and emphasized the importance of investing wisely in an extreme low rate environment.

Attendees enjoyed a full-course luncheon while listening to Cloud Computing Security: Myths and Realities, a very timely technology presentation by Gideon Lenkey of Ra Security Systems, Inc. Gideon discussed the cloud security paradigm, the risks of cloud computing and his recommendations for evaluation and implementation. He noted how cloud computing is criticized because you have no idea where your data is, who actually has access to it and what recourse you have if the provider’s system fails or you are “shut off”. Gideon provided easy to follow examples of how cloud storage systems can be attacked and the risks that the user faces as a result. He emphasized the importance of understanding the provider’s responsibilities, their strengths and weaknesses and implementing sufficient security procedures.

Topics and Speakers

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