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  • CECL for non-banks: What to expect

    With almost a year until some public business entities must begin complying with the current expected credit loss (CECL) standard, banks and credit unions have been fervently beginning transition practices, and their preparations have taken center stage in regulatory and financial news. However, a topic less prevalent amidst current CECL…
  • Will a decade of increasing qualitative adjustments come to an end under CECL?

    Qualitative adjustments, otherwise known as Q factors, have been steadily increasing in influence on the reserves held for pooled loans since the end of the recession, and their role in estimating the allowance may change yet again under the current expected credit loss model, or CECL. During a recent webinar…
  • Economic forecasting for CECL: Still plenty of questions among institutions

    Economic forecasting is a major facet and discussion point of the quickly approaching current expected credit loss (CECL) model. Financial institutions will not only have to report incurred losses on their books, but they will also need to project their loss estimates over the entire life of the loan at…
  • Think twice before using spreadsheets for these tasks

    Financial institutions, small and large, touch numerous data sources every day, which can present problems when each data source speaks a different language, preventing different systems – or even departments – from obtaining the same data. Exacerbating this problem of inconsistent data, many community banks and credit unions are still…
  • CECL paralysis: How to avoid common implementation hurdles

    Financial institutions across the U.S. are grappling with the many changes that will be required to implement the current expected credit loss, or CECL, model. With the extensive amount of time, resources and staff required to successfully transition from the incurred loss model, even getting started can be daunting. During…
  • The different use cases for CECL methodologies

    Financial institutions are currently planning and building models for the quickly approaching implementation of the current expected credit loss standard, or CECL. The accounting change brings many concerns surrounding implementation dates, modeling, qualitative factors, economic forecasting and documentation/reporting. More specifically, many bank and credit union managers and executives think that…
  • 4 ways to help investors understand the CECL transition: Disclosure tips

    As Securities and Exchange Commission (SEC) filers prepare to meet the deadline to implement the FASB’s current expected credit loss model, or CECL, for fiscal years beginning after Dec. 1, 2019, SEC registrants are weighing what CECL transition disclosures to provide about the new standard and its expected impact. Some…
  • After FASB’s recent changes, CUNA still seeks CECL relief

    Credit unions are happy with some changes the Financial Accounting Standards Board (FASB) is making to Topic 326, but they'd still like to see more, according to a letter from the Credit Union National Association (CUNA). In a Sept. 17 letter commenting on the FASB's recent proposals, CUNA's senior director…
  • CECL and IFRS 9: How are they different?

    Financial institutions around the world are revising how they estimate credit losses, but institutions subject to the International Accounting Standards Board (IASB) standards have gotten a head start on those that will follow the U.S. Financial Accounting Standards Board’s current expected credit loss model, or CECL. Earlier effective dates of…
  • FASB proposed CECL extension: The true impact

    The Financial Accounting Standards Board (FASB) recently introduced a proposal to allow calendar year-end non-public business entities (PBEs) to report reserve levels in accordance with the new current expected credit loss (CECL) standard on Mar. 31, 2022, instead of the initial reporting date of Dec. 31, 2021. This was initially…
  • Why data is such a large concern for credit unions preparing for CECL

    As many credit unions begin to brace for the impact that the current expected credit loss (CECL) model may have on their institution, several are faced with key data challenges. CECL is a change in the FASB’s Accounting Standards, and all credit unions will be required to transition by the end…
  • How one community bank's ALLL calculation went from a week to 30 minutes

    One question frequently asked about the new current expected credit loss model (CECL) is, “Can we do this on our own?” Potential options are to build a system internally or partner with an outside vendor like Sageworks. For smaller community banks and credit unions, a common consideration is to…
  • CECL transition workshops: Hands-on practice for upcoming ALLL changes

    Training for the current expected credit loss model, or CECL, is available for bankers and others preparing for the transition to the FASB’s updated accounting standard. Given the nature and complexity of the CECL model and the variable nature of financial institutions’ loan portfolios and potential losses, implementation will vary…
  • How are your peers preparing for CECL?

    As financial institutions lay the groundwork for transitioning to the current expected credit loss model, or CECL, many are curious about how peers are preparing for CECL and where they are in tackling what’s considered the biggest accounting change in banking history. After all, the FASB’s guidance on CECL is…
  • Why choosing the right loss rate methodologies is the largest CECL concern

    In a recent Sageworks webinar focused on loan pool segmentation, bank and credit union managers and executives were asked what their largest concern is in 2018 regarding the accounting standard transition from the incurred loss to the current expected credit loss model (CECL). 60% of respondents said finding the right…
  • Regulatory agencies approve new CECL proposal

    On Friday, April 13, the federal banking agencies jointly issued a Notice of Proposed Rulemaking to amend their capital rules in response to “the biggest change yet” to bank accounting principles set forth in Accounting Standards Update ASU 2016-13, otherwise known as the current expected credit losses model, or CECL. The notice…
  • Top five resources for CECL and navigating the transition in 2018

    The Current Expected Credit Loss (CECL) model, otherwise known as the “biggest change to bank accounting yet”, goes into effect in 2020 for banks that file with the Securities and Exchange Commission (SEC) filers and in 2021 for all other financial institutions. The change impacts all financial institutions, including community…
  • Loan pool segmentation: Standing pat or making changes for CECL?

    Proper loan pool segmentation, already a critical issue in the incurred-loss method of calculating the allowance for loan and leases losses (ALLL), is expected to have even more importance under the current expected credit loss model, or CECL. Various methodologies for forecasting expected credit losses will require specific kinds of…
  • CECL for community banks: The practical path recap

    Sageworks Senior Consultant Tim McPeak and Implementation Consultant Danny Sharman recently shared practical tips for community banks facing the CECL transition. The session included a good overview of CECL expectations and followed up on points discussed in an earlier regulatory webinar. Approaches All banks, including small, non-complex community banks, will…
  • Publicly traded banks disclose CECL progress, expected impact

    As financial institutions plan for their respective deadlines to implement the new current expected credit loss (CECL) model, they are also weighing how to disclose the potential financial impacts and how to keep stakeholders informed along the way. A study of recent SEC filings finds that publicly traded financial institutions…
  • How to decide whether to build or buy CECL model software

    Most non-public business entities aren’t required to implement the current expected credit loss (CECL) model until fiscal years starting after Dec. 15, 2020. However, many financial institutions are heeding the advice of the Financial Accounting Standards Board (FASB), and have begun taking steps to ensure effective implementation of this major…
  • CECL Progress: Poll shows many financial institutions have implementation committees

    As 2017 comes to a close, it is a good time for financial institutions to assess where they are in the process of implementing the Financial Accounting Standards Board’s new current expected credit loss (CECL) model. Based on a poll conducted recently by Sageworks, most financial institutions at a minimum…
  • Navigating 4 key CECL challenges for credit unions

    In a recent CUES article, Terry Katzur, CCE, EVP/chief lending officer of ELGA CU in Burton, MI, wrote about how their credit union plans to prepare for the current expected credit loss (CECL) transition. “Like many credit unions, we at ELGA Credit Union—with assets of $543 million in Burton, Mich.—currently…
  • 5 Top takeaways from the 2017 Risk Management Summit

    The hundreds of people attending the 2017 Risk Management Summit hosted by Sageworks heard from dozens of thought leaders in the financial services industry. As a result, bank and credit union leaders came away from Denver and the three-day summit, which ended Wednesday, with a wealth of advice. They learned…
  • CECL preparations yet to begin in earnest at many banks, credit unions

    Many financial institutions have yet to begin in earnest their preparations for transitioning to the current expected credit model (CECL), a recent poll by Sageworks suggests. More than half of financial professionals attending a webinar this summer, “CECL Transition Planning and Execution,” said their financial institutions have completed none of…
  • CECL - Manage the change

    The changes inherent in the shift from FASB’s incurred model to the current expected credit loss model (CECL) present many challenges for financial institutions and accounting professionals alike. However, the transition from an incurred model to estimating expected credit losses is not meant to be a cumbersome process, let alone…
  • CECL model: Build or buy?

    Compared to existing ALLL requirements, Accounting Standards Update 2016-13 (CECL) will require more inputs, assumptions, analysis and documentation, making the option to automate the process significantly more attractive for many institutions. Regardless of an institution’s approach, key consideration areas for a CECL-ready model include data management, contractual life, segmentation, methodologies,…
  • Error-free work - Is it time to move past the spreadsheet?

    What do we do with all of these spreadsheets?  The above question is being asked by financial managers at banks and credit unions as the implementation of the FASB’s current expected credit loss model (CECL) approaches. So, where did the use of all of these spreadsheets (and the dependence on…
  • A year since CECL: Capital expected to be most impacted

    In the 13 months since the Financial Accounting Standards Board (FASB) finalized its new standard on accounting for credit losses, ASU 326, financial institutions have been preparing to implement what has been labeled by some industry figures as the biggest change ever to bank accounting. Although institutions will not be…
  • Data quality for credit unions - 3 Methods for data collection

    In order to prepare for FASB’s Current Expected Credit Loss (CECL) model, credit unions are currently relying on different methods to collect and store data. In the recent CECL Webinar: Data Quality for Credit Unions, Sageworks Risk Management Consultant Danny Sharman discusses the three different types of methodologies for data…
  • Credit union webinar - CECL data quality

    In a recent webinar for credit union executives, Danny Sharman a risk management consultant with Sageworks addressed loan data for these institutions, especially as they look toward the currect expected credit loss model (CECL) that will be required for the allowance for loan and lease losses (ALLL). The webinar covered…
  • Registration deadline approaching - Risk management summit 2017

    One month before the primary registration period ends. Register now and save $100 per registration. The 2017 Risk Management Summit presented by Sageworks is set for September 25-27th in Denver, CO. The Summit is the industry’s leading life-of-loan conference, spanning loan origination through portfolio risk management in a CECL -…
  • How to find data adequacy ahead of CECL

    FASB's guidance for estimating expected credit losses is not prescriptive, so, examiners are not asking exactly how you plan to calculate your reserve under CECL today. However, due to the shift from an incurred to expected loss model, banks need to be working on loan-level data collection now as a…
  • Ahead of upcoming CECL meeting the FASB releases memos to shed light on implementation questions

    Ahead of a meeting by financial-institution representatives, auditors and others, the Financial Accounting Standards Board (FASB) have released five memos providing staff analyses of several issues raised about the nuances of implementing its Current Expected Credit Loss (CECL) model. The Transition Resource Group for Credit Losses will meet Monday beginning…
  • CECL Q&A – Methodology

    The FASBs Current Expected Credit Loss (CECL) model presents unique challenges for banking professionals. To help institutions prepare, Sageworks has launched a CECL webinar series covering data, segmentation, methodology and forecasting requirements broken down by loan type. A key component of the series is allowing participants to ask their CECL-related…
  • CECL methodology – vintage analysis application

    The FASB’s guidance on the Current Expected Credit Loss (CECL) model is not prescriptive and allows for a number of methodologies to be used in order to fulfill the requirements. Vintage analysis is an allowance for loan lease losses (ALLL) calculation methodology that has been suggested as being the new minimum…
  • CECL methodology - introduction to vintage analysis

    Under the Current Expected Credit Loss (CECL) model, there will be no triggers, thresholds or smoothing mechanisms allowed in loss calculations; the shift here is a movement to recording losses as they become expected. If a loss is expected, it should be recorded when that loss becomes known, even if this…
  • The ALLL today - impaired loan challenges

    With the 2016 release of the Financial Accounting Standards Board’s (FASB) guidance on the Current Expected Credit Loss (CECL model), banking professionals and consultants have been theorizing about the impact the standard will have on current bank processes. While it is important for these banking professionals to be prepared, consultants…
  • The ALLL today - quantitative challenges

    With the 2016 release of the Financial Accounting Standards Board’s (FASB) guidance on the CECL model, banking professionals and consultants have been theorizing about the impact the standard will have on current bank processes. While it is important for these banking professionals to be prepared, consultants are stressing the importance…
  • The ALLL today – Qualitative factor challenges

    With the recent release of the Financial Accounting Standards Board’s (FASB) guidance on the CECL model, banking professionals and consultants have been theorizing about the impact the standard will have on current bank processes. While it is important for these banking professionals to be prepared, consultants are stressing the importance…
  • The ALLL today – segmentation challenges

    With the release of the Financial Accounting Standards Board’s (FASB) guidance on the CECL model, banking professionals and consultants have been theorizing about the impact the standard will have on current bank processes. While it is important for these banking professionals to be prepared, consultants are stressing the importance of…
  • The ALLL today - data challenges

    With the recent release of the Financial Accounting Standards Board’s (FASB) guidance on the CECL model, banking professionals and consultants have been theorizing about the impact the standard will have on current bank processes. While it is important for these banking professionals to be prepared, consultants are stressing the importance…
  • 2016 Risk Management Summit wrap-up

    Sageworks hosted the 5th Annual Risk Management Summit September 14-16 at the AT&T Executive Education and Conference Center in Austin, Texas. The Summit was the largest Sageworks event to date and featured presentations from industry leaders, interactive roundtable discussions, panels and networking opportunities. Key to the discussion this year were…
  • 5 “Must go” benefits of the Sageworks Pre-Conference ALLL Users’ Group

    Too many of us underutilize the technology we have available because our days are filled with “putting out fires” rather than discovering ways to make the most of these current resources. Take your smartphone, for example. When a colleague (or your teen-ager at home) shows you a “trick” or a…
  • Why you don't want to miss the 2016 Risk Management Summit

    With the recent release of the Financial Accounting Standards Board’s (FASB) guidance on the Current Expected Credit Loss (CECL) model, Sageworks' Summit is uniquely positioned to provide the latest information on how institutions can prepare for the changes and what the impact may be once effective.  The 2016 Risk Management…
  • 3 Ways the 2016 Risk Management Summit will ease CECL transitions

    Sageworks will host the 5th Annual Risk Management Summit September 14-16 at the AT&T Executive Education and Conference Center in Austin, Texas. The Summit will feature presentations from industry leaders, interactive roundtable discussions, panels and networking opportunities. Central to the discussion this year will be strategies for transitioning to the…
  • FASB issues CECL – new standard for credit-loss recognition

    After years in the works, the Financial Accounting Standards Board (FASB) issued its final guidance on a new current expected credit loss (CECL) model, starting the clock for banks, credit unions, other entities and their preparers to implement the new requirements over the next few years.  “The CECL model will…
  • How your bank or credit union should get ready for CECL

    **The FASB Issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The Financial Accounting Standards Board’s (FASB) long-awaited final guidance on its new standard for measuring expected credit losses is expected to be released in June, a step that…
  • The importance of effective data governance for banks

    With the pressures of changing regulations and data security continuing to increase, banks and credit unions must remain vigilant when it comes to their data. Ensuring that data is of high quality, accessible and secure is key to keeping up with this changing environment. In addition, institutions should determine how…
  • ALLL at many banks, CUs reliant on 1-2 people - poll

    Two-thirds of bankers in a recent poll said their allowance for loan and lease losses (ALLL) is primarily calculated by only one or two people in the institution, according to Sageworks, a financial information company that provides loan portfolio and risk management solutions to banks and credit unions. Sageworks conducted…
  • Why you should attend the “CECL Workshop Series”

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Are you ready for CECL? The Financial Accounting Standards Board (FASB) is expected to release final guidance in Q1 for the current expected credit loss (CECL) model. Implementation…
  • GAO: Dodd-Frank beginning to impact community banks and credit unions

    According to the latest report from the U.S. Government Accountability Office (GAO), community banks and credit unions are starting feel the impact of the Dodd-Frank Wall Street Reform Act. The Act, announced in 2010, requires or authorizes federal agencies to issue rules to strengthen the financial services industry. It also…
  • Sageworks’ speakers tackle tough banking topics

    Sageworks banking industry experts are winding down a busy year of disseminating information and facilitating discussions on regulatory changes, such as the FASB’s upcoming move to the current expected credit loss model (CECL), and on best practices for portfolio risk management and credit analysis. Sageworks consultants have hosted and spoken…
  • Want answers on CECL? Fed webinar aimed at non-bankers

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The Federal Reserve announced it will hold a special information session later this month for accountants, consultants, auditors and others to learn more about the FASB’s forthcoming current expected…
  • How to forecast future expected credit losses

    A central difference between the existing incurred-loss model for estimating credit losses and the FASB’s proposal utilizing a current expected credit loss, or CECL, model is that financial institutions will need to estimate credit losses on loans over the life of the loan. Shifting from estimating only losses already incurred…
  • CECL preparation: Do this, not that

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Understandably, financial institutions of all sizes have numerous questions about how they will implement the FASB’s proposed current expected credit loss model, or CECL, once the standard is finalized.…
  • CECL is a hot topic at Sageworks Risk Management Summit

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The Financial Accounting Standard Board’s proposed move to the current expected credit loss, or CECL, is top of mind for many of the bankers and industry experts attending the…
  • Final CECL guidance expected by year end despite 2 board members' opposition

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Despite a report that two FASB board members will vote against the final version of the current expected credit loss (CECL) model, a spokeswoman told Sageworks Friday that the…
  • More banks predict larger impact from CECL model

    **The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The attention on the FASB’s current expected credit loss (CECL) model has only increased in recent months, as the industry braces for the release of final guidance before the…