RALEIGH, NC (July 18, 2017) — It has been 13 months since the Financial Accounting Standards Board (FASB) issued its final standard on accounting for credit losses, ASU 326. Since that time, financial institutions have been doing research, preparing for the change and discussing next steps for their calculation. Based off of learnings over the past year, what has been clarified and what is to come?
Since the update, however, bankers and their advisors have made headways toward determining data sets that institutions should be archiving and methodologies to review for consideration. Throughout 2016 and 2017, Sageworks conducted webinars and events to educate financial institution executives and analysts on options for CECL implementation and methodology selection. More than 4,100 unique bankers participated in these expected loss seminars. During the CECL Methodology Webinar Series, Sageworks asked more than 200 bank and credit union managers and executives “What area do you feel will see the largest impact under CECL?” The results were then compared against responses to the same question from June 2016.
“Financial managers should recognize and prepare for involvement across all departments with the CECL calculation. We’re already starting to see our clients prepare other divisions of their institution because they know the majority of them will be affected. They are realizing that it’s going to take a village. People may not be worried about their allowance going up, but they are expecting it,” said Robert Ashbaugh, senior risk management consultant with Sageworks.
To learn more about CECL methodologies and how to prepare, visit http://web.sageworks.com/cecl-methodology-webinar-series/.
Sageworks offers banks and credit unions lending, credit risk and portfolio risk software to efficiently grow and improve the borrower experience. By automating the life of the loan with Sageworks, bankers book commercial loans faster and reduce risk. Sageworks uniquely provides integrated solutions and industry expertise to more than 1,400 financial institutions that achieve an average 38% higher loan growth than peers. Visit www.sageworks.com to learn more.
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