Model Risk Management Highlights Chapter’s January Dinner Meeting
New Revenue Recognition Standard Featured at Mini-Session
The Chapter’s January Dinner Meeting featured a very informative and entertaining dinner program entitled The Impact of Models presented by Scott Baranowski of Wolf & Co., P.C. The event was held at the Stony Hill Inn in Hackensack, N.J. on Wednesday, January 14, 2015. Members and guests enjoyed a full course dinner featuring entrees of chicken stuffed with Asiago cheese and pignoli nuts or tropical salmon with diced tomatoes,onions and grapefruit in a lemon and orange zest.

Scott Baranowski discussed the important factors that community bank executives should consider when developing financial models which have increasingly become an integral component of every institution’s normal course of business. He noted that banks are increasingly applying models to more complex products such as enterprise-wide risk management. Scott began by defining a model as an objective method that applies statistical, economic, financial or mathematical theories, techniques and assumptions. He explained a model’s core components consist of information input, processing and reporting. Scott provided key points to consider when developing a model. He emphasized the risk potential from model decisions based on incorrect or misused model inputs. Scott evaluated the benefits and constraints of developing an in-house model versus using an outside expert.

Featured dinner speaker Scott Baranowski, Wolf & Co. P.C. presented The Impact of Models at the January Dinner Meeting.
Scott Baranowski explains how models are used during the January Dinner Meeting presentation.
Scott emphasized the importance of model validation and described the scope of validation as identifying, evaluating and reporting. He stressed that proper validation must be performed by an independent third party and he described the steps to implement proper in-house model validation. Scott presented excellent examples of the validation process for several key models including asset/liability management, anti-money laundering and allowance for loan losses. He then provided answers to a number of challenging questions from the Chapter Membership.

Connie Becker, Audit Senior Manager from BDO, presented the afternoon Mini-Session which featured a very informative overview of the impact of the new Financial Institutions and Specialty Finance revenue standards prescribed in ASC Topic 606. Connie identified the key provisions of the new regulation, described the impact on financial institutions and explained the transition guidelines and implementation considerations for the community bank financial manager.

Members and guests also enjoyed a splendid cocktail hour which offered everyone in attendance the opportunity to mingle and relax while enjoying a lavish array of fine appetizers served by the expert staff at the Stony Hill Inn.

Topics and Speakers

The Impact of Models

Charles Frago Photo
Scott Baranowski
Member of the Firm
Wolf & Company P.C.

Slide Presentation

Overview of 2014 Revenue
Recognition Standard

Gerrit van de Wetering Photo
Connie Becker
Audit Senior Manager

Slide Presentation

Connie Becker, Audit Senior Manager, BDO USA explains the impact of the new revenue recognition standards at the afternoon mini-session.
Members earn valuable CPE credits while attending the free mini-session.
John Klimowich performs the traditional invocation prior to the dinner presentation.
Chapter Vice President Brian McCourt summarized the afternoon mini-session.