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ALLL / portfolio segmentation


portfolio segmentation

  • CECL Implementation

    CECL segmentation of the loan portfolio

    The transition to the current expected credit loss model, or CECL, provides an opportunity to revisit loan portfolio segmentation. In the end, whether financial institutions make wholesale changes or instead determine that their current segmentation is optimal for CECL, institutions will need to document how they arrived at their decisions. Here are some tips for CECL segmentation.

    Poll

    What type of data do you anticipate leveraging for your CECL calculation?

    • 1-5 years of detailed loan level data
    • 5+ years of detailed loan level data
    • 1-5 years of aggregate (pool level) data
    • 5+ years of aggregate (pool level) data
    • I don't know the difference

    Tip Of The Day

    Begin to develop multiple scenarios for your ALLL. Not only will it prove examiner friendly, but it will provide you with additional insight into the impact of changing variables

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