Confessions of a Data Analyst

The implementation of CECL has been called the biggest change in financial institution accounting . . . ever. Under current U.S. GAAP, financial institutions account for losses based on historical events or incurred losses. Beginning in the first quarter of 2020, financial institutions must look at the past as well as the future over the full lifetime of a loan. […]

It’s crunch time.

SEC filers will start estimating their allowances according to CECL as of the first quarter of 2020, just a little more than a year and a half from now. Considering they will want to run parallel incurred loss and CECL methodologies for several quarters – a year is recommended – most lenders, including private companies, are knee-deep in preparations, setting up transition committees, gathering data, studying methodologies. […]

Subject Matters at the National CECL Conference

The sessions at the MST 2018 National CECL Conference are built around the most important and challenging CECL topics as they are emerging during the transition period. Each General Session will feature presentations by panels of leading CECL experts and interactive discussions among attendees. […]

2018-10-24T12:04:37+00:00March 2nd, 2018|Education|

What says the Harvard Business Review?

A recent Harvard Business Review blog, “Management Tip of the Day,” offered a new take on attending conferences. So many times we think we have to max out our time, but a conference can also be a time for inspiration. Getting away from the daily duties at the office gives us time to think, network with others in similar job functions and gain new perspective. […]

2018-10-31T10:36:38+00:00February 11th, 2016|CECL, Education|

The Fed Speaks: Overview of CECL Model and Supervisory Expectations

On October 30, the Federal Reserve Bank of St. Louis hosted the first of a promised series of online sessions explaining the new standard for estimating the ALLL, known as CECL (Current Expected Credit Loss model) and the options banks will have to implement it. Julie Stackhosue of the St. Louis Fed was joined by Steve Merriett, Joanne Wakim and Shuchi Satwah of the Federal Reserve Board of Governors in Washington, DC. “The delays surrounding CECL’s release by FASB have created skepticism among some that this standard will never come to pass,” commented MST CEO Dalton T. Sirmans. “Steve Merritt’s comment that half of his staff is dedicated 100 percent to CECL, this first in a series of sessions on CECL by the St. Louis Fed, and the numerous warnings or words of caution herein should end any doubt. CECL is going to happen.” […]

2018-10-23T12:53:28+00:00November 12th, 2015|ALLL, Banking, CECL, Community Banks, Education|

CECL: Ready, Set . . . Go?

Regardless of the nuances to be decided and final issues to be resolved, and whether the announcement comes in 2015, 2016, or later, banks’ advisors, including their external accounting and audit vendors, are telling them to begin preparing for the new FASB accounting standard for estimating the allowance, Current Expected Credit Losses (CECL). “In our view, the single most important of these preparations for banks to begin now is the process of capturing and storing loan-level detail and transactional information on a regular basis,” notes MST’s Director of Special Projects Chris Emery. “Every indication is that historical pool-level data will no longer be acceptable for calculation of loss rates. For many banks, this will mean a lack of necessary data when CECL implementation comes around.” […]

2018-10-23T12:53:28+00:00November 10th, 2015|ALLL, Banking, CECL, Education|

CECL Looms Large

AICPA Banking Conference September 2015 Notes on CECL from the AICPA National Conference The AICPA’s 2015 National Conference on Banks and Savings Institutions, held last week outside Washington, DC, in National Harbor, Md., focused on the coming FASB model for determining the allowance, the so-called CECL (Current Expected Credit Losses), which will require banks to base their ALLL calculations on future expectations. Speakers from the various banking regulatory agencies provided their perspectives on the soon-to-be standard, the attention to CECL heightened by the presence of the “fatal flaw” draft and anticipation of a final version and the announcement of a schedule for implementation. […]

Preparing for CECL

Recommended Reading: “Preparing for CECL” by Adam Thomas and Walter McNairy of DHG Financial Services considers the key differences between the current incurred loss and proposed expected loss models for estimating the ALLL. As the financial services industry awaits the CECL release, Thomas and McNairy argue that, “…it is prudent for all entities to understand the impact and prepare for implementation.” Read more […]

2018-10-23T12:53:53+00:00August 31st, 2015|ALLL, Banking, CECL, Current Expected Credit Loss, Education|