Accounting and Auditing Update Featured at October Dinner Meeting
Mortgage Strategies Offered at Afternoon Mini-Session
The global financial crisis has raised concerns regarding perceived flaws in the traditional methods that financial institutions utilize to measure impaired mortgage loans. Recently proposed guidelines for the recognition of credit losses together with other proposed regulatory revisions will have a significant effect on the reporting requirements and the accounting for impaired loans. Barry Pelagatti CPA, Partner from BDO presented a comprehensive Accounting and Auditing Update at the October Dinner Meeting that discussed the proposed loan reporting requirements and other important accounting issues. Barry reviewed the key proposals in the pipeline and recommended the strategies that financial managers should consider to maintain compliance and optimize profitability.
Featured dinner speaker Barry Pelagatti, Partner, BDO presented an Accounting and Auditing Update.
Katie Hopkins, SVP Investment Strategies, Vining Sparks presented Mortgage Strategies in the Current Economic Environment at the October Mini-Session.
Members and guests closely follow the afternoon Mini-Session presented by Katie Hopkins.

The Chapter’s October Dinner Meeting was held at the Stony Hill Inn in Hackensack, NJ on Wednesday, October 16, 2013. A splendid cocktail hour preceded the full-course dinner offering Members and guests the opportunity to mingle and relax while enjoying their favorite cocktail along with a lavish array of fine appetizers served by the expert staff at the Stony Hill Inn.

Barry explained how the financial crisis exposed weaknesses in the current GAAP reporting model that delayed the recognition of loan losses. He noted that the proposed Basel III regulations are being implemented to “reflect the need for earlier recognition of loan losses to ensure robust provisions.” (Basel Committee on Banking Supervision) He then discussed the proposed guidelines whereby the provision for loan losses would measure the expected cash flow shortage which would require a much earlier recognition than the current GAAP requirement.

Barry presented an overview of the Basel III Final Rule with particular attention to the effects the rule would have on small bank holding companies. He primarily discussed the provisions concerning mortgage lending and reporting as well as the effects on capital including the implementation of higher capital rations and new risk-based capital requirements. Barry also discussed a number of important recent developments that financial managers should consider and then answered key questions from the Members and guests in attendance.

Katie Hopkins, investment strategist from Vining Sparks presented Mortgage Strategies in the Current Economic Environment at the afternoon Mini-Session. Katie discussed current mortgage market trends with emphasis on mortgage prepayment speeds. She noted the limited opportunities today’s mortgage market offers to a lender, however mortgage loans still provide advantages compared to alternative investments. Katie explained that mortgage prepayment speeds are the one of the most important factors when determining a true overall rate of return.

She demonstrated how a number of important factors (i.e rates, weighted average coupon, loan size, etc.) each impact the mortgage prepayment speed and emphasized the importance of measuring each of these factors.  She then presented examples of how investments in different loan products offer a better total return when prepayment speeds are considered. Katie emphasized that loan diversification and knowledge of prepayment speeds provide the best overall mortgage loan investment value.

Topics and Speakers

Accounting and Auditing Update

Barry Pelagatti Photo
Barry Pelagatti
Partner, Assurance

215 241-8967

Slide Presentation

Mortgage Strategies in the Current Economic Environment

Katie Hopkins Photo
Katie Hopkins
SVP - Investment Strategies
Vining Sparks
312 798-2422

Slide Presentation

Chapter President Maureen Kalena welcomed Members and guests and offered opening remarks prior to the Dinner Meeting.
Members from Columbia Bank and "friends" pose during the cocktail hour.
Linda Stahl and Bob Pabst enjoy the cocktail hour.
Amit Govil offers "another" interesting story during the cocktail hour.