CECL Solution from Sageworks
Navigate the CECL transition with a trusted ALLL partner
Hear from Darren Flavell, National Cooperative Bank
- Automatically and securely collect, store and manage loan-level data
- Plan using a number of robust methodologies, including migration analysis, vintage analysis and probability of default/loss given default (PD/LGD)
- Run scenarios to test calculations and plan for the one-time capital adjustment
- Establish Risk Factor Drivers for Q-factors to support qualitative adjustments
- Learn from a network of thousands of bankers and partners
Endorsed by American Bankers Association®
Sageworks ALLL is endorsed by the ABA as a CECL solution to help institutions prepare for and comply with the credit loss standard.
Video: 5 Steps for CECL implementation planning
Leverage Sageworks ALLL for CECL implementation planning
- Determine pool segmentation & calculating the life of each pool
- Calculate your historical loss experience
- Adjust historical loss experience for current and forecasted conditions
- Documentation and disclosures
How Blue Ridge Bank is preparing for CECL
Challenge
Blue Ridge Bank was concerned that the FASB’s new CECL model will bring significant changes to the ALLL calculation. Brian Plum, President and CEO, states, “Once FASB started rearing its head, our executive team started talking about the need for an automated solution.” Because the bank was calculating its ALLL on internal spreadsheets, there was concern about its processes holding up to the increased demand for granularity and the overall complexity of the ALLL calculation under CECL.
Solution
Blue Ridge Bank adopted Sageworks ALLL to ensure that it will be compliant with the ensuing changes in the regulatory landscape. Plum states, “With the big changes coming, we now have a partner making sure the methodology we’re using is in line with where we need to be.” In evaluating other solutions, Plum found Sageworks ALLL to be the best option for preparing for CECL, as it is the only solution that provides a custom integration and is “more seamless and a better all-around solution.” Plum also notes the overall increase in efficiency. “When we did [the ALLL] on spreadsheets, we would always have to worry about having the formulas correct. We now have a much better breakdown by segmentation, and we’re doing the calculation in much less time…it’s truly a painless process,” Plum states.
Results
“At the end of the day, the data’s a lot better, the calculation’s a lot better, and we’re in a much more defensible position to justify our ALLL,” says Plum. Most importantly, when asked about Blue Ridge Bank’s readiness to adapt to changing regulation, Plum remarks, “We’re in great shape. We have what we feel is going to be the granularity to always be able to defend what’s in the allowance and have confidence in our process.”
Hear why bankers rely on Sageworks ALLL
Save Time on the ALLL
“Prior to automating our calculation, we had numerous spreadsheets with numerous tabs. It would take me 3 to 4 weeks to do the calculation and board members had difficulty understanding it. With Sageworks, it takes me about 2 days to do the calculation.”
Sean McCabe SVP and Sr. Credit Administrator
Bank of Manhattan
Save Time on the Alll
“Previously with Excel, if we wanted to look at a monthly interim calculation, we would have to run the core reports and manually input them. With Sageworks, the numbers are inside the software and available with just a few clicks of a button – giving us significant quarterly time-savings.”
Rhoda Lauver Accountant, ALLL
Jonestown Bank & Trust
About Sageworks ALLL
Flexible Loss-Rate Modelling
- Try out different loss rate models by pools or blend them
- Choose from static pool, migration analysis, vintage analysis, DCF and probability of default/loss given default (PD/LGD)
- Create a more robust and defensible loss rate methodology
- Leverage an advanced and customized analysis to meet the institution’s needs
Qualitative Factors & Reasonable Forecasts
- Apply reasonable and supportable forecasts to a forward-looking cash flow model
- Better justify and support changes to qualitative adjustments
- Calculate probabilities of default based on projected economic conditions
- Save time by pulling in FRED data to help with analysis