Depending on an organization’s needs, CEIS will work with its key management to either refine an existing Allowance Methodology or to create a new Allowance for Loan and Lease Losses methodology.
CEIS is regularly retained by institutions with portfolio’s ranging from $20B to $50MM to perform these studies.
In either scenario, CEIS will address relevant regulatory and GAAP requirements, incorporate industry best practices where appropriate, review trends in portfolio concentrations, analyze risk migration, historical losses when available, and take into consideration other matters relevant to portfolio characteristics. The development of the Loan Loss Reserve Methodology requires a thorough and comprehensive process to build the framework/format/model that can be periodically updated in accordance with regulatory and management requirements and industry best practices.
Contact us to learn more about our ALLL Methodology Refinement services and how they may be of assistance to your organization.