FASB’s CECL: How to Prepare Now

This slide deck explains myths related to the FASB's CECL model and what institutions can be doing now in preparation. One of the main issues institutions will face in transitioning to an expected loss model is the influx of data requirements that will be necessary under the new model. This document describes what data will be needed, and offers a few recommendations for data governance, segmentation and model selection.

Slides: Scenario Analysis

Download the slides from our recent, on-demand scenario anaysis webinar. The presentation includes key factors to consider, example scenarios, key CECL preparation information and tips for improving or beginning scenario analysis in your institution.

How to Calculate Your ASC 450-20 (FAS 5) Reserves

Historical loss rates, migration analysis, and peer groups. Which historical methodology should your bank or credit union adopt? This webinar provides an overview of the ASC 450-20 (FAS 5) portion of the ALLL calculation, and gets into the three ways to calculate your quantitative factors, how to evaluate and make adjustments to qualitative factors and best practices for assembling appropriate pools.

How to Calculate Your ASC 310-10-35 (FAS 114) Reserves

Fair Market Value of Collateral, Present Value of Future Cash Flows, and Loan Pricing. When performing an ASC 310-10-35 impairment analysis, which method is the most appropriate for your bank or credit union? Abrigo’ risk management consultants provide an overview of the ASC 310-10-35 portion of the ALLL calculation. They discuss three valuation methods and when to use them, common collateral impairment challenges, and when it is appropriate for a loan in ASC 310-10-35 status to be moved to ASC 450-20 (FAS 5).

Backtesting Your ALLL Methodology

Backtesting serves as a way to measure the effectiveness of a bank or credit union's ALLL methodology. It essentially consists of comparing actual outcomes to forecasted results. For institutions looking to increase the defensibility of their ALLL, backtesting can provide an extra line of defense. This webinar discusses what questions banks and credit unions should ask to assess model accuracy and provides an overview of different backtesting techniques at the portfolio and concentration level. Download the slides below.

Documenting the 9 Qualitative Factors

These slides cover the nine qualitative and environmental factors as recommended by guidance. These can be broken down into internal and external factors, and supported by a wide range of data. Abrigo consultants discuss best practices for ensuring directional consistency in the justification of your qualitative factors, and discuss ways to help add objectivity to the process.

ALLL Roadmap

These slides are from a joint webinar conducted by Abrigo and Crowe Horwath. The slide deck details the implications of FASB's CECL model, preparing for stressed ALLL forecasts and creating an ALLL roadmap. Content covered includes ways to prepare for recent and impending regulatory changes, as well as best practices for the ALLL calculation in general.

How to Justify a Change in Your ALLL

These slides detail examiner expectations with respect to making a change to your ALLL. Abrigo consultant Tim McPeak discusses areas of scrutiny and items to be cognizant of when making a change to your overall reserve figure, as well as best practices and ways to prepare for your next exam.

How to Determine the Right Measure of Loss

These slides cover the topic of loss methodologies. In particular, they go into the benefits and drawbacks of historical loss, migration analysis, PD/LGD and loss discovery. In general, examiners will favor more sophisticated loss methodologies, so as your institution grows, always consider a move to a more comprehensive ALLL calculation.

Disclosure Reporting

These slides relate to a webinar conducted by Abrigo and Synergy Bank Consulting regarding disclosure reporting. The content covered includes the Accounting Standards Update 2010-20: who they apply to, why the update was required, common challenges in complying with the guidance and best practices in how to effectively manage disclosure reporting.

ALLL Model Validation

These slides are a component of a webinar hosted jointly by Abrigo and Crowe Horwath on the topic of model validation. The webinar discusses ALLL trends, regulatory expectations, model risk management guidance and validation activities. These activities include conceptual design, ongoing monitoring and outcome analysis.

Accounting for Purchased Loans

This slide deck discusses the banking landscape and how there has been a steady wave of market consolidation in recent years. It then gets into accounting for purchased loans and key challenges faced by institutions when they make an acquisition. One of the challenges in the complexity of the calculation itself, which this deck covers in describing examples of both ASC 310-20 (FAS 91) and ASC 310-30 (SOP 03-3) loans.
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