COMMISSIONER'S C O LU M N
The Priority List Susannah Marshall
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Commissioner
I
like to make lists. I work well
when I have a “to-do” list, a list for both home and the office. I have a sense of accomplishment, sometimes just a fleeting one, when I mark everything off of my current list. But I know that my list for the office is never fully cleared as it contains many topics that are works in progress – banking issues that are consistently evolving and new trends or industry related matters that warrant my attention. As we begin 2022, have you and the board made a list for your bank? What are the issues that you want or need to address in the current year? Not just the normal strategic goals or financial metrics, but any specific trends or banking topics that your bank wants to elevate during the year. I am happy to share a few items from my list: • As an industry, are we prepared for the rate increases that have been announced? Are banks evaluating their interest rate risk positions and adjusting as possible? Is there any area of the balance sheet/income statement that has not been reviewed for the potential effects of rising interest rates? • Are banks (that have not yet adopted) prepared for the implementation of the Current Expected Credit Losses (CECL) methodology now that we are less than a year away?
10
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SPRING 2022
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Arkansas State Bank Department
• Cybersecurity risks increase daily – how do the banks feel about their cybersecurity posture? What additional tools or resources are needed in this area? Are there any gaps within each bank’s internal information technology team? • Labor market pressures are all around. Are banks able to identify individuals who will become the next generation of leaders within the organization? Will banks need to re-evaluate some parts of their business model to adapt to changes in needs or preferences from the workforce? • In addition to staffing related matters, how many banks will be impacted this year by changes in board composition? Are banks actively evaluating the structure of the board to see if it fully represents the institution today and the markets the bank
serves? We all know that it can take time to address the need to fill board vacancies. Do the banks have plans in place for any unforeseen changes? • How are banks prepared to address the ongoing discussion of Mergers & Acquisitions? Even if a bank has no plans to sell, is it prepared to answer that question if asked by a possible acquirer? If a bank is interested in expanding its operations, have they laid the groundwork internally for growth by merger? Will this be the year that some banks choose to enter new markets outside of Arkansas? If so, how will those new markets fit into the bank’s various programs such as compliance, Bank Secrecy Act, internal audit and loan review? • So much conversation is happening in the industry concerning expansion of
“In addition to staffing related matters, how many banks will be impacted this year by changes in board composition? Are banks actively evaluating the structure of the board to see if it fully represents the institution today and the markets the bank serves?”
