Your bank's most critical quarterly calculation

The Allowance for Loan and Lease Losses (ALLL) is your bank’s most critical quarterly calculation. The amount a bank must set aside in loan loss reserves can impact the bottom line to the extent of being the difference between profit and loss. Add today’s regulatory emphasis on managing loan portfolio risk, and it is easy to understand why your bank’s ALLL estimate is so important.

Traditionally, determining the ALLL is a demanding, time-consuming manual process which involves a high-level bank employee:

•  gathering data
•  rating risk for various types of loans
•  analyzing historical data
•  analyzing current data
•  determining the influence of various internal factors affecting risk
•  determining the influence of various external factors affecting risk
•  creating spreadsheets reflecting the assembled information
•  analyzing the information to develop loan loss reserve estimates

All of this is done, in many cases, with little confidence that information is accurate or the resulting estimates are appropriate.

The Loan Loss Analyzer (ALLL Solution) streamlines the calculation and documentation for estimating ALLL, providing the bank a reliable, repeatable process for determining the reserve and satisfying regulatory requirements while eliminating the demands and concerns associated with manual processes. With the Loan Loss Analyzer, board members, senior management, and committee members can have confidence in the accuracy of the calculation as well as the assurance that the process behind the ALLL estimate is sound.

The Loan Loss Analyzer addresses all the regulatory requirements by giving the bank a systematized method for:

•  Monitoring the loan portfolio
•  Identifying loans at risk
•  Capturing and analyzing loan documentation
•  Demonstrating the adequacy of your bank’s loan administration system
•  Ensuring consistency with Generally Accepted Accounting Principles (GAAP)
•  Analyzing loans from two perspectives
  •  Financial Accounting Standards (FAS) No. 5, Accounting for Contingencies, for grouped loans
  •  FAS No. 114, Accounting by Creditors for Impairment of a Loan, for individual loans.
•  Making it quick and easy to execute the process not only quarterly as required, but at any time, such as for monthly board meetings