ALLL Data Aggregation: Internal & External
Before an institution can begin its ALLL calculation, it must first prepare its data and manipulate it into a format that is readily usable by all parties involved. Often times this consists of running reports and pulling information from an institution’s core manually. The data is then housed on spreadsheets, and must be validated and transformed into a more usable format before the calculation can get underway. What’s more, some additional data, such as appraisal dates and values must be pulled for impaired loans.
Outside of the bank’s portfolio, certain external data is to be included in the calculation for comprehensiveness. In justifying qualitative and environmental factors, for instance, institutions should pull in macroeconomic and local data.