CECL: Unprecedented Time, Unprecedented Solution

Published 4/23/2020

If you answer “No” to any of the following questions, read on. 

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For most Large Filers the impact from CECL is clear though may be further compounded as a result of COVID-19 in future periods. This series of events should prove it necessary for all remaining adopters to answer these questions sooner rather than later.

In response to such urgency, Valuant has implemented a new service to help banks understand the impact of CECL in record time, an unprecedented solution for an unprecedented time.  When banks are limited in both time and resources due to other time-sensitive matters as evident today, we looked out of the box to offer a service whereby we can report your CECL estimate in days.

Valuant is agile and has the proven tools, domain knowledge, and personnel resources to accept your data and process it according to a pre-fined DCF (discounted cash flow) Model using metrics from our vast peer database (Valuant Index) which includes over $100 billion in loans from banks all throughout the country. Once processed, we will return this in a comprehensive set of reports detailing the results, inputs & assumptions, forecasts, and other supporting documentation. What usually takes weeks or months can now be delivered in days.

The following illustrates how Valuant is leveraging its ValuCast SaaS Platform to estimate your CECL impact in just days.

our process

Beneficiaries of this unprecedented solution:

  • 2023 Adopters – With reserves increasing on Day 1 by upwards of 95% for Large Filers, it will be crucial for SRC’s and privately held financial institutions to evaluate the impact of CECL for their portfolios well in advance of typical budget periods which are often a year in advance of the subsequent year. Therefore, suggesting that you will want to know an estimate in or before 2021. 

  • Delayed 2020 Adopters – There are several reasons a financial institution may have opted to delay CECL for 2020. Possibilities include concerns with the model and underlying methodologies selected, the output of such methodologies, or the overall confidence in CECL Readiness. By engaging Valuant, such adopters can challenge their current efforts to confirm or pivot from their current path.

  • 2020 Adopters – Many in this category are using a single model to calculate CECL, which may not be performing to its expectations or may not produce meaningful or otherwise accurate results due to COVID-19. An alternative view can serve to validate your current model or provide support for a challenger model to your existing champion model.

 

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