Stress testing: Are the results guiding your CECL decision-making?

first_img ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr continue reading » According to economists, a recession is looming. In a recent survey by the National Association for Business Economics, 74% of economists who responded expect a recession by the end of 2021.Historically low levels of losses have allowed reserve levels to go below pre-financial crisis levels. Charge offs were close to zero for most banks since 2013, according to call report data from S&P Market Intelligence. So the question remains: would they hold up against a recession? Stress testing gives an institution a serious look into their capital and reserves, and if they possess enough of each to remain viable, should a recession hit. It also provides guidance for the impact of the new accounting standard, Current Expected Credit Losses (CECL), on the portfolio. The impending implementation of CECL is forcing institutions to perform economic forecasts, as opposed to the current allowance for loan and lease losses (ALLL) model which focuses on previously incurred losses, to have a more holistic and accurate depiction of risk. It takes into account the entire life of a loan instead of just looking a few years down the road.Both CECL and stress testing take top-down and bottom-up approaches to test the capital adequacy of a financial institution. However, it is important to determine which method is right for your institution. In a recent Abrigo webinar, CEIS Review’s Dean Giglio and David Vest and Abrigo’s Tim McPeak discussed the pros and cons of each approach in both CECL implementation and stress testing.last_img read more

ECCELL – Adult High School Diploma Completion Program wants you to enroll today.

first_imgECCELL is an adult high school diploma completion pr0gram that will get you that degree you need.Enroll now for online coursework, 24/7 access, flexible and self-paced scheduling, supportive staff, and best of all it is FREE!If you are 18 years or old and your class has graduated, you can still get that diploma. For more information go to getmydiploma.org.Adult classes are being offered at the following locations: Burden, 408 Highway 160 – call 620-438-333 or Winfield, 113 W. 9th – 620-221-2266 or 888-296-5146.last_img read more