Quantitative Considerations for the ALLL

Under current accounting and regulatory guidance, financial institutions today face a tension between the interests of safety and soundness stakeholders and those of shareholders and other users of financial statements. As a consequence, many institutions are using a larger-than-normal qualitative adjustment to the allowance to create sufficiently robust reserves to satisfy different stakeholders.

In this paper, Garver Moore at Sageworks describes how institutions can use quantitative approaches that result in a more defensible, reasonable and responsible reserve level.

Download to learn:

  • Techniques for setting qualitative adjustment policies that provide a firmer basis for allocations
  • How to use these approaches in preparing for CECL’s reasonable and supportable forecasts

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