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Supervisory Insights

Summer 2012 Vol. 9, Issue 1 - Table of Contents

Last Updated: May 8, 2023

Supervisory Insights - Summer 2012 - PDF

Letter from the Director


The Risk Management Examination and Your Community Bank

The FDIC is committed to open communication with community banks, recognizing this is critical to administering an effective supervisory process. A key component of this communication is ensuring bankers understand examination programs and regulatory expectations. This article presents an overview of the examination and supervisory process, and suggests ways to enhance communication between bankers and supervisors.

Stress Testing Credit Risk at Community Banks

The recent banking crisis illustrates how quickly market conditions can deteriorate, straining community bank loan portfolios. Stress testing can help financial institutions evaluate lending risks and capital adequacy under stressed, but plausible, scenarios and develop appropriate strategies to mitigate the risk. This article describes the credit-related stress-testing process, discusses its usefulness in managing risk, and provides simple examples of how community banks can conduct stress testing.

Results from the FDIC’s Credit and Consumer Products/Services Survey: Focus on Lending Trends

Completed by FDIC examiners at the conclusion of each examination, the Credit and Consumer Products/Services Survey gathers examiner insights on underwriting practices, new and evolving banking products and activities, commercial real estate market conditions, and funding practices. This article shares recent Survey results with a focus on lending activity, including trends in underwriting, factors influencing banks’ ability and willingness to lend, use of loan workouts, and loan growth patterns across the country.

Accounting News: Accounting for Troubled Debt Restructurings

Insured financial institutions modify loans for a variety of reasons. A modification is identified as a troubled debt restructuring when a borrower is experiencing financial difficulties, and the bank grants a concession it would not otherwise consider. This article provides a summary of the accounting for troubled debt restructurings, including a discussion of regulatory reporting issues.

Regular Features

Regulatory and Supervisory Roundup

This feature provides an overview of recently released regulations and other items of interest.

Supervisory Insights

Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.

Martin J. Gruenberg
Chairman, FDIC

Sandra L. Thompson
Director, Division of Risk Management Supervision

Journal Executive Board

Division of Risk Management Supervision
George E. French, Deputy Director and Executive Editor
Michael J. Dean, Acting Deputy Director
James C. Watkins, Senior Deputy Director

Division of Depositor and Consumer Protection
Sylvia H. Plunkett, Senior Deputy Director
Jonathan N. Miller, Deputy Director
Robert W. Mooney, Deputy Director

Regional Directors
Thomas J. Dujenski, Atlanta Region
Doreen R. Eberley, New York Region
Kristie K. Elmquist, Dallas Region
Stan R. Ivie, San Francisco Region
James D. LaPierre, Kansas City Region
M. Anthony Lowe, Chicago Region

Journal Staff

Kim E. Lowry
Managing Editor

Shannon M. Beattie
Financial Writer

Paul S. Vigil
Financial Writer

Supervisory Insights is available online by visiting the FDIC’s website at To provide comments or suggestions for future articles, to request permission to reprint individual articles, or to request print copies, send an e-mail to

The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.