Our CECL Impact Analysis product was designed to give our bank clients a quick and easy way to estimate the Allowance impact of the upcoming CECL changes. We take a standard regulatory loan file of a bank’s full portfolio and combine it with that bank’s NCO and risk migration history or our loss index data. We then run a CECL discounted cash flow model developed based on the material FASB has published to date. The result is an estimate of the CECL loss by product type, at the loan level, for the full life of the loan. We then compare this to the existing ALLL calculation.

We have developed significant expertise around CECL. We have authored a number of papers to help banks get ready for this change:

• CECL is Released – Now What?
• White Paper: CECL – An Analysis of Accounting Standards Update No. 2016-13 Financial Instruments – Credit Losses

CECL Impact Analysis Key Benefits:

• Provides the Bank insight on the key CECL loss drivers by product type.
• Allows the Bank to proactively manage its loan origination process and contractual terms in order to lessen the impact of CECL as implementation approaches.
• Quick and cost effective.