How the Proposed Current Expected Credit Loss (CECL) Rule Will Affect your Allowance for Loan and Lease Losses
|
|
- Maryann Mills
- 6 years ago
- Views:
Transcription
1 How the Proposed Current Expected Credit Loss (CECL) Rule Will Affect your Allowance for Loan and Lease Losses Presented by Wilary Winn Brenda Lidke, Director September 22,
2 Topics Covered Proposed standard Data to start tracking Example of current ALLL model vs discounted cashflow example that meets CECL Non loan items affected by CECL 2
3 FASB Proposed Accounting Standards Update (ASU) Issued on December 20, 2012 Will significantly change the allowance for loan and lease losses and other approaches to impairment Newly created subtopic Financial Instruments: Credit Losses (Subtopic ) Not just the ALLL, applies to all financial assets not classified at fair value e.g. AFS securities not included in scope 3
4 Instrument Type All financial assets - debt instruments, leases, and loan commitments The term debt instrument is defined in the proposal as a receivable or payable that represents a contractual right to receive cash (or other consideration) or a contractual obligation to pay cash (or other consideration) on fixed or determinable dates, whether or not there is any stated provision for interest. Covers loans, debt securities, trade receivables, reinsurance receivables, lease receivables, and loan commitments 4
5 Amortized cost should be based on the present value of the cash flows an entity expects to collect Contractual cash flows are adjusted for expected prepayments and defaults Cash flows should not be adjusted for extensions, renewals, or modifications unless a TDR is reasonably expected Cash flows expected to be collected are discounted at the effective interest rate Cash flows not expected to be collected are also discounted at the effective interest rate 5
6 Why the Change? GAAP did not properly reflect risk pre-financial crisis because of the delayed recognition of credit losses Financial Crisis Advisory Group 362 comment letters investors generally in favor of CECL and preparers generally not Departs from the incurred loss model which means the probable threshold is removed Removes the prohibition on recording day one losses 6
7 Not without controversy FASB FAQ Issued on March 25, 2013 Continued re-deliberations FASB not expected to re-expose ASU FASB states that a final ASU will be issued by the end of this year consensus is mid-2015 effective for 2017 or
8 Measuring Expected Credit Losses Begin with historical loss rates for similar assets (grouped approach) Static pool for example Adjust for current conditions Adjust for reasonable and supportable forecasts Life of loan estimate - can assume economic conditions after the end of the reasonable forecast time period remain the same or can revert to historical loss rates Final guidance is expected to state that the entity should revert to historical loss experience 8
9 Final Guidance Final guidance will include implementation guidance describing the factors that an entity should consider to adjust historical loss experience for current conditions and reasonable and supportable forecasts 9
10 Technical Considerations Permits allowance calculation to be based on methods which implicitly include the time value of money DCF explicitly considers time value of money Loss-rate, roll-rates, probability of default methods, and provision matrices implicitly consider discount Contemplates use of mean and not mode if using statistical modeling 10
11 Economic Conditions to Start Tracking Now Unemployment national and local Current and expected interest rates Forward curves Monetary policy Inflation GDP (Gross Domestic Product) growth rates Expected housing appreciation/depreciation Credit union industry performance as a whole 11
12 Unemployment Rates GA 7.9% 16% 14% 12% 10% 8% 6% 4% 2% 0% MI 7.9% CA 7.3% OR 6.7% FL 6.2% MD 6.2% National 6.1% WI 6.0% MA 5.6% MN 4.6% MT 4.6% IA 4.5% NE 3.7%
13 Market Interest Rates - US Treasury Yield Curve at 6/30/14 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 13
14 Market Interest Rates - US Treasury Rates Forecast at 6/30/14 Rate Forecast Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 US 10-Year US 2-Year Spread
15 Inflation and GDP Forecast Economic Indicator Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Fed Funds Target Unemployment Real GDP growth CPI
16 FHFA Seasonally Adjusted House Price Index for USA Quarterly Appreciation Annualized Appreciation from Same Quarter 1 Year Earlier 15.00% 10.00% 5.00% 0.00% 5.00% 10.00% 15.00% 2014 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 16
17 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Expected Home Price Long Term Average Data from Pulsenomics quarterly surveys 17
18 Expected Housing Appreciation by Region 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Data provided by Case-Shiller / CoreLogic via CNN Money 18
19 30+ Day Residential 1st Mortgage Loans By Region 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Northeast 7.10% North Central 6.06% South 6.90% West 4.31% National 6.04% Data from SNL Financial 19
20 Loan Data to Start Tracking Now Loan product type 30yr Fixed, HELOC, New Vehicles Loan Terms rate, amortization term, original balance Delinquency status Defaulted loan balance and date at the loan level Recovered amounts and date of recovery by loan Prepayments at the loan level date and balance Current CLTV (Combined Loan to Value) Current FICO 20
21 How Should the Loan Data be Tracked? Easily accessible database of loans Depends on loan volume Could use Excel or Access Alternatively, there are companies that specialize in data storage Save pertinent information each quarter-end 21
22 What Else Should My Credit Union be Doing Now? Use the data to explore forecasting Look at using the different economic factors and how these will adjust prepay and default assumptions Run a parallel ALLL model Credit unions that create the proposed model now will have a better chance of a successful implementation later To have a better understanding of the magnitude of reserve change that will be required 22
23 Discounted Cashflow Analysis Key Valuation Inputs: Conditional Repayment Rate (CRR) Conditional Default Rate (CDR) Conditional Prepayment Rate (CPR = CRR + CDR) Loss Severity Discount Rate depends on accounting context. For CECL it is original yield 23
24 Loan Example FICO group Discounted Annual Annual Annual Sched. P&I payment $ 30, Losses CRR% CDR% Severity% $ 196, % 3.5% 20% Loan Remaining Repo Total Total Repo Valuation Payment Loan Actual Voluntary Prin Prin P&I DQ Repo Prin Monthly Monthly Monthly Month Month Balance Amort Prepays Recoveries Collected Interest Collected Balance Balance Liquidations Losses CRR% CDR% Severity% ,000, ,973,028 5,669 21,302-26,972 24,926 51,897 14, % 0.30% 20% ,946,248 5,656 21,124-26,781 24,718 51,498 29, % 0.30% 20% ,919,657 5,644 20,947-26,591 24,511 51,102 44, % 0.30% 20% ,893,255 5,631 20,772-26,402 24,306 50,708 58, % 0.30% 20% ,867,039 5,618 20,598-26,216 24,102 50,317 72, % 0.30% 20% ,841,009 5,605 20,425-26,030 23,900 49,930 87, % 0.30% 20% ,815,164 5,593 20,253-25,846 23,699 49,545 86,366 14, % 0.30% 20% ,789,501 5,580 20,083-25,663 23,500 49,163 85,642 29, % 0.30% 20% ,764,020 5,567 19,914-25,481 23,302 48,783 84,924 44, % 0.30% 20% ,738,719 5,555 19,746-25,301 23,106 48,407 84,211 58, % 0.30% 20% ,713,598 5,542 19,580-25,122 22,912 48,033 83,503 72, % 0.30% 20% ,688,654 5,529 19,414-24,944 22,719 47,662 82,800 87, % 0.30% 20% ,663,887 5,517 19,250-24,767 22,527 47,294 82, , % 0.30% 20% ,639,295 5,504 19,088-24,592 22,337 46,929 81, , % 0.30% 20% ,614,876 5,492 18,926-24,418 22,148 46,566 80, , % 0.30% 20% ,590,631 5,480 18,766-24,245 21,960 46,206 80, , % 0.30% 20% ,566,557 5,467 18,607-24,074 21,774 45,848 79, , % 0.30% 20% ,542,654 5,455 18,449-23,904 21,590 45,493 78, , % 0.30% 20% ,239,624 1,799,821 1,205,709 4,245,154 2,109,775 6,354, ,503, , % 0.30% 20% Total 1,339,728 2,157,063 1,205,709 4,702,500 2,527,810 7,230,310 1,503, , % 0.29% 20% 24
25 Risk Layering Real Estate Loans Key Loan Attributes Interest rate fixed or variable Contract term balloons, hybrids, etc. Lien position Closed or open ended Source retail vs. wholesale Loan purpose primary, second home, investor Debt to income ratios Credit score Combined Loan-to-Value ratio 25
26 Average 12 month CDR% by LTV% and FICO 15.0% CDR% 12.5% 10.0% 7.5% 5.0% > 125% 105% - 125% 95% - 105% 80% - 95% < 80% 2.5% 0.0% > FICO 26
27 Example of Current ALLL Calculation Historical Historical TDR Known Total Loan Ending Average C/O Loss Loss Loss Q & E Required Type Balance Balance Ratio Allowance Allowance Allowance Change Allowance All Mortgages 125,000, ,500, % 562, , , ,000 1,512,500 27
28 Example of Proposed ALLL Calculation - DCF Analysis Discounted Discounted Annual Annual Gross Discount Discounted Lifetime Annual Loan Payment Credit LTV Ending Prepay % Default % Loss Avg Future Rate Future Future Future Type Status Score Status Balance (CRR) (CDR) Severity % Life Losses (WAC) Losses Losses % Losses % Fixed 30 yr Current 720+ Under 50% 25,000,000 10% 0.0% 0% % 0.0% 0.0% Current % 75% 15,000,000 9% 0.1% 10% 6.5 9, % 7, % 0.0% Current % 100% 10,000,000 8% 0.1% 15% , % 7, % 0.0% Current % 120% 5,000,000 7% 0.4% 17% , % 18, % 0.0% Current % 150% 5,000,000 4% 1.3% 23% , % 92, % 0.2% Current 720+ Over 150% 5,000,000 4% 1.8% 42% , % 247, % 0.5% Repeat for FICO Buckets Current by LTV bucket 5,000,000 6% 0.7% 20% , % 38, % 0.1% Current by LTV bucket 5,000,000 5% 3.5% 20% , % 196, % 0.5% Current by LTV bucket 5,000,000 4% 13.0% 20% , % 532, % 1.9% Current Under 500 by LTV bucket 5,000,000 4% 20.0% 20% , % 707, % 3.1% Delinquent 30+ days 500,000 4% 30.0% 20% , % 113, % 5.0% Delinquent days 500,000 2% 50.0% 20% , % 133, % 8.9% Delinquent 90+ days 500,000 2% 75.0% 20% , % 169, % 13.6% ARM 10/1 repeat all FICO & LTV buckets above 38,500,000 8% 2.0% 20% , % 751, % 0.3% Total Mortgages 125,000,000 8% 2.9% 15% 6.5 3,901, % 3,017, % 0.4% 28
29 Difference in Methodology Much more detail is required loans are grouped by like characteristics LTV, FICO, amortization term, etc. Prepay (CRR) and default (CDR) assumptions are built from historical losses by group and adjusted for economic environment Loan terms, interest rates, and scheduled amortization are used in the calculation Results under new methodology are 2x higher than current results 29
30 What is the expected change in your organization s provision under the proposed rules? Decrease Increase by 25% Increase by 25% to 50% Increase more than 50% 30
31 For Purchased Credit-Impaired (PCI) financial assets Amortized cost would be the purchase price plus the associated expected credit loss at acquisition. The difference between amortized cost and the par amount (noncredit discount or premium) is amortized or accreted into income The credit discount is not accreted - establish a day one allowance instead Permits increases in expected cash flows to be recognized immediately significant shift from current GAAP Final rule is expected to state that non-credit related discount/premium should be allocated to the individual assets purchased 31
32 TDR Guidance Use the modified contractual cash flows, discounted at the original effective interest rate Initial rule stated that the difference would be recorded by a basis adjustment rather than an allowance However, the final rule will clarify that an entity is required to increase the cost basis of the restructured asset through a corresponding increase in the entity s allowance for expected credit losses in certain TDRs. The effect is that the write-down is not permanent and the reserve is recoverable. 32
33 No more other than temporary impairment (OTTI) model for debt securities Change from individual security evaluation to include pool evaluations Record an allowance instead of direct write-off (allows the opportunity for reversal) For assets carried at FV/OCI, there is a practical expedient available. Credit losses do not have to be recognized if both: Fair value equals or exceeds the amortized cost (which is the first step in the existing OTTI model); and Expected credit losses on the asset are insignificant 33
34 Miscellaneous Items Redefines collateral-dependent in the glossary A financial asset for which the repayment is expected to be provided primarily or substantially through the operation (by the lender) or sale of the collateral, based on an entity s assessment as of the reporting date. Clarifies that operation is by the lender and removes the word solely Final rule is expected to state that on collateral-dependent assets, the reserve is measured as the difference between the collateral s fair value (less selling costs) and the amortized cost basis of the asset. 34
35 Miscellaneous Items - Continued Defines nonaccrual, cost-recovery and cash-basis methods, write-off (charge-off) Final guidance is expected to clarify that an entity is not required to recognize a loss on a financial asset for which the risk of nonpayment is greater than zero, yet the amount of the loss would be zero - Example have a CDR, but have a zero loss severity 35
36 36
37 Contact Information Wilary Winn LLC First National Bank Building 332 Minnesota Street, Suite 1750W Saint Paul, MN
38 Services and Contact Information Private Label MBS/CMOs and Asset Liability Management: Frank Wilary Mergers and Acquisitions, Fair Value Footnotes, ASC , and TDRs: Brenda Lidke Mortgage Servicing Rights and Mortgage Banking Derivatives: Eric Nokken 38
Credit Modeling, CECL, Concentration, and Capital Stress Testing
Credit Modeling, CECL, Concentration, and Capital Stress Testing Presented by Wilary Winn Douglas Winn, President Brenda Lidke, Director Frank Wilary, Principal Matt Erickson, Director September 26, 2016
More informationCECL and ASC Memorandum
ADVICE TO STRENGTHEN FINANCIAL INSTITUTIONS Released August 2016 TO: RE: Wilary Winn ASC 310-30 Clients Current Expected Credit Loss Model ( CECL ) As you know, FASB finally released the long anticipated
More informationMergers: Acquisition Trends and Recent Results
Mergers: Acquisition Trends and Recent Results Presented by Wilary Winn Brenda Lidke, Director Matt Erickson, Senior Analyst September 23, 2014 1 Topics for the Session Historical Merger Data Merger Valuation
More informationMortgage Servicing Rights
Wilary Winn University Breakout Session #2 Mortgage Servicing Rights Eric Nokken, Director September 23, 2014 Release versus retain Topics Covered Valuation of retained servicing Accounting and regulatory
More informationAre you prepared? FASB s CECL Model for Impairment Demystifying the Proposed Standard
Are you prepared? FASB s CECL Model for Impairment Demystifying the Proposed Standard Chad Kellar, CPA Senior Manager Crowe Horwath LLP Lauren Smith, CPA Senior Manager Primatics Financial Raj Mehra Executive
More informationCOUNTDOWN TO CECL: IS YOUR FINANCIAL INSTITUTION ON TRACK?
COUNTDOWN TO CECL: IS YOUR FINANCIAL INSTITUTION ON TRACK? Presented by: Scott Deters David Klopfer Katie Schnieber COUNTDOWN TO CECL: IS YOUR FINANCIAL INSTITUTION ON TRACK? Presented by: Scott Deters
More informationAudit Tax Advisory Risk Performance Crowe Horwath LLP 1
PACB Annual Convention FASB s Current Expected Credit Loss (CECL) Model: Navigating the Changes September 28, 2015 Matthew Schell, Partner Crowe Horwath LLP Washington, DC 2015 Crowe Horwath LLP 1 Agenda
More informationMortgage Banking Derivatives and Mortgage Servicing Rights
Mortgage Banking Derivatives and Mortgage Servicing Rights FFIEC Capital Markets Specialists Conference Mortgage Pipeline Risk Management and Evaluating & Valuing Mortgage Servicing Rights Doug Winn, President
More informationCredit Modeling, CECL, Concentration Risk, and Capital Stress Testing
Credit Modeling, CECL, Concentration Risk, and Capital Stress Testing Presented by Wilary Winn Douglas Winn, President Brenda Lidke, Director Frank Wilary, Principal Matt Erickson, Director September 26,
More informationCredit impairment under ASC 326
Financial reporting developments A comprehensive guide Credit impairment under ASC 326 Recognizing credit losses on financial assets measured at amortized cost, AFS debt securities and certain beneficial
More informationTechnical Line FASB final guidance
No. 2018-09 4 October 2018 Technical Line FASB final guidance What s changing under the new standard on credit losses? In this issue: Overview... 1 Key considerations... 2 Effective date and transition...
More informationAccounting for Bank Acquisitions
ADVICE TO STRENGTHEN FINANCIAL INSTITUTIONS Released June 2018 Beginning in 2009, the fair value method must be used to account for business combinations. The accounting is detailed FAS ASC 805 Business
More informationA Comprehensive Look at the CECL Model
A Comprehensive Look at the CECL Model Table of Contents SCOPE... 3 CURRENT EXPECTED CREDIT LOSS MODEL... 3 LOSS PROBABILITIES... 5 MEASUREMENT OF EXPECTED CREDIT LOSSES... 5 Individual Versus Pooled Assessment...
More informationFASB s CECL Model: Navigating the Changes
FASB s CECL Model: Navigating the Changes Planning for Current Expected Credit Losses (CECL) By R. Chad Kellar, CPA, and Matthew A. Schell, CPA, CFA Audit Tax Advisory Risk Performance 1 Crowe Horwath
More informationAccounting for Credit Union Mergers
ADVICE TO STRENGTHEN FINANCIAL INSTITUTIONS Released December 2016 Version 3 Credit unions historically accounted for mergers under the pooling of interest method. The accounting was relatively straightforward
More informationProposed Risk-Based Capital Rule For Credit Unions. Presented by Brenda Lidke & Douglas Winn March 3, 2014
Proposed Risk-Based Capital Rule For Credit Unions Presented by Brenda Lidke & Douglas Winn March 3, 2014 1 Current net worth and risk-based net worth (used for complex credit unions) ratios were implemented
More informationFFIEC CAPITAL MARKETS CONFERENCE
MORTGAGE BANKING DERIVATIVES & MORTGAGE SERVICING RIGHTS FFIEC CAPITAL MARKETS CONFERENCE Mortgage Pipeline Risk Management and Evaluating & Valuing Mortgage Servicing Rights Eric Nokken, Director Wilary
More informationTechnical Line FASB final guidance
No. 2017-09 16 March 2017 Technical Line FASB final guidance How the new credit impairment standard will affect entities outside the financial services industry In this issue: Overview... 1 Key considerations...
More informationAccounting for Financial Instruments
Accounting for Financial Instruments Summary of Decisions Reached to Date During Redeliberations As of October 31, 2012 The Summary of Decisions Reached to Date is provided for the information and convenience
More informationTechnical Line FASB final guidance
No. 2016-24 12 October 2016 Technical Line FASB final guidance A closer look at the new credit impairment standard All entities will need to change the way they recognize and measure impairment of financial
More informationMaking the Business Case for the CECL Approach
Making the Business Case for the CECL Approach Attend any recent or upcoming financial institution conference and you will find considerable discussion and debate about the new accounting guidance related
More informationSageworks Advisory Services PRACTICAL CECL TRANSITION GUIDANCE SUMMARY
Sageworks Advisory Services PRACTICAL CECL TRANSITION GUIDANCE SUMMARY Use of this content constitutes acceptance of the license terms incorporated at https://www./cecl-transition-content-license/. This
More informationA CECL Primer. About CECL
A CECL Primer Introduction The purpose of this paper is to provide a brief overview of Visible Equity s solution to CECL (Current Expected Credit Loss). Many facets of our CECL solution, such as the methods
More informationCECL expected to be released second quarter of 2016 Implementation
CECL expected to be released second quarter of 2016 Implementation Many of us in the financial institutions industry have been hearing about the new model to measure credit losses for months now and have
More informationCECL for Commercial Entities
CECL for Commercial Entities St. Louis, MO April 12, 2018 With You Today: Anthony Burzinski Managing Director Accounting Advisory Services KPMG LLP aburzinski@kpmg.com Alan Kuska Director Accounting Advisory
More informationSAVE THE DATE! 22nd Annual CFO Council Conference The Disneyland Hotel Anaheim, CA May 15 18, 2016
SAVE THE DATE! 22nd Annual CFO Council Conference The Disneyland Hotel Anaheim, CA May 15 18, 2016 2 A Practical Guide to the Allowance for Expected Credit Loss FASB Subtopic 825-15 Agenda 1 2 3 4 Introduction
More informationAgenda. CECL Where are we and how did we get here? What is FASB s Expected Credit Loss Model? Expected Credit Loss Models - Challenges.
The CECL Model Agenda CECL Where are we and how did we get here? What is FASB s Expected Credit Loss Model? Expected Credit Loss Models - Challenges blank 2 Background Financial Crisis with credit as a
More informationCorporate America Credit Union Annual Meeting Preparing for FASB Current Expected Credit Loss (CECL) Model April 2017
Corporate America Credit Union Annual Meeting Preparing for FASB Current Expected Credit Loss (CECL) Model April 2017 Eve Rogers, Partner Atlanta, GA Merri Ellen Wadsworth, Senior Manager Atlanta, GA 2016
More informationAccounting for Interest Rate Derivatives FAS ASC 815
Accounting for Interest Rate Derivatives FAS ASC 815 Presented by Wilary Winn Douglas Winn, President September 27, 2016 1 Douglas Winn President Today s Presenter Mr. Winn co-founded Wilary Winn in the
More informationFASB Financial Instruments Project
FASB Financial Instruments Project June 18, 2013 2:00 3:15 pm Presented by: Jean Joy, CPA Director of Financial Institutions Wolf & Company, P.C. 99 High Street Boston, MA 02110 P: (617) 428-5432 E: jjoy@wolfandco.com
More informationCECL guidebook. AN INTRODUCTION TO THE FASB FINANCIAL INSTRUMENTS CREDIT LOSS MODEL September 2016
CECL guidebook. AN INTRODUCTION TO THE FASB FINANCIAL INSTRUMENTS CREDIT LOSS MODEL September 2016 Table of contents BACKGROUND 1 FINANCIAL ASSETS MEASURED AT AMORTIZED COST AND ON LEASES 3 PURCHASED FINANCIAL
More informationCurrent Expected Credit Losses (CECL) for Mortgage Banking
Current Expected Credit Losses (CECL) for Mortgage Banking November 15, 2017 Presented by: Matthew Streadbeck, Partner, Ernst & Young LLP Carrie Kennedy, Partner, Moss Adams, LLP Jonathan Prejean, Managing
More informationInside the new credit loss model
August 2016 Inside the new credit loss model Requirements and implementation considerations An article by Chad Kellar, CPA, and Matthew A. Schell, CPA, CFA Audit / Tax / Advisory / Risk / Performance Smart
More informationCECL TRG Issue Log November 2018
The Financial Accounting Standards Board (FASB) established the Transition Resource Group (TRG) for Credit Losses to inform the board about issues that arise as entities implement the new credit impairment
More informationFINANCIAL INSTRUMENTS: IN-DEPTH ANALYSIS OF NEW STANDARD ON CREDIT LOSSES
FINANCIAL INSTRUMENTS: IN-DEPTH ANALYSIS OF NEW STANDARD ON CREDIT LOSSES Prepared by: Faye Miller, Partner, National Professional Standards Group, RSM US LLP faye.miller@rsmus.com, +1 410 246 9194 Mike
More informationCECL IMPLEMENTATION. Practical implementation and operational considerations of the CECL model for Credit Unions
CECL IMPLEMENTATION Practical implementation and operational considerations of the CECL model for Credit Unions #AICPAcu 'Where data are sparse, competing ideas abound that are clever and wishful. Neil
More informationDefining Issues. FASB Accelerates Recognition of Credit Losses. June 2016, No Key Facts. Key Impacts
Defining Issues June 2016, No. 16-23 FASB Accelerates Recognition of Credit Losses The FASB s new credit impairment standard will significantly change the way entities recognize impairment of financial
More informationMaking the Business Case for the CECL Approach Part II
ADVICE TO STRENGTHEN FINANCIAL INSTITUTIONS Making the Business Case for the CECL Approach Part II Released January 2017 This white paper is the second part of a three part series that presents the numerous
More informationNew Developments Summary
July 10, 2018 NDS 2018-08 New Developments Summary Transition Resource Group for Credit Losses Summary of issues as of June 11, 2018 Summary On June 11, 2018, the Transition Resource Group for Credit Losses
More informationCECL TRG Issue Log November 2018
The Financial Accounting Standards Board (FASB) established the Transition Resource Group (TRG) for Credit Losses to inform the board about issues that arise as entities implement the new credit impairment
More informationContrasting the new US GAAP and IFRS credit impairment models
Contrasting the new and credit impairment models A comparison of the requirements of ASC 326 and 9 No. US2017-24 September 26, 2017 What s inside: Background....1 Overview......1 Key areas....2 Scope......2
More informationCECL Current technical developments Part II
CECL Current technical developments Part II Current Developments in FASB s Current Expected Credit Loss Model December 11, 2018 We will be starting soon Please disable pop-up blocking software before viewing
More informationSEASONS FEDERAL CREDIT UNION
CONSOLIDATED FINANCIAL STATEMENTS (With Independent Auditor s Report Thereon) TABLE OF CONTENTS Page INDEPENDENT AUDITOR S REPORT... 1 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial
More informationFinancial Instruments Impairment
Financial Instruments Impairment SPECIAL REPORT New Product or Service of the Year Content Content Marketing Solution 2 Financial Instruments Impairment Financial Instruments Impairment Financial instruments
More informationReport of Independent Auditors and Consolidated Financial Statements for. Arizona Federal Credit Union and Subsidiaries
Report of Independent Auditors and Consolidated Financial Statements for Arizona Federal Credit Union and Subsidiaries December 31, 2016 and 2015 CONTENTS REPORT OF INDEPENDENT AUDITORS 1 2 PAGE CONSOLIDATED
More informationThe Presenter. Charles N. McQueen. Founded McQueen Financial in 1999 SEC Registered Investment Advisor Asset Liability Management.
CECL The Presenter Charles N. McQueen Founded McQueen Financial in 1999 SEC Registered Investment Advisor Asset Liability Management Page 2 McQueen Financial Advisors SEC Registered Investment Advisor
More informationAccounting for Mortgage Banking Activities Interest Rate Lock Commitments, Forward Sales Commitments and Closed Loans Held for Sale
ADVICE TO STRENGTHEN FINANCIAL INSTITUTIONS Accounting for Mortgage Banking Activities Interest Rate Lock Commitments, Forward Sales Commitments and Closed Loans Held for Sale Released March 2012 Mortgage
More informationAllowance for Loan Losses - Understanding CECL and Current Trends
2014 CliftonLarsonAllen LLP Presentation for the National Association of Federal Credit Unions Allowance for Loan Losses - Understanding CECL and Current Trends September 2, 2015 CLAconnect.com Today s
More informationCECL Current Expected Credit Losses
2016 Annual Risk Management Conference CECL Current Expected Credit Losses Matt Esposito, Assistant Director November 14, 2016 The views expressed in this presentation are those of the presenter. Official
More informationCenter for Plain English Accounting
Report February 22, 2017 Center for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members The Current Expected Credit Loss (CECL) Model Are You Ready? Background
More informationACCOUNTING FOR CREDIT UNION MERGERS
ACCOUNTING FOR CREDIT UNION MERGERS Credit unions historically accounted for mergers under the pooling of interest method. The accounting was relatively straightforward and was accomplished by combining
More informationCECL Update - What Should Your Bank Be Doing Right Now? Todd Sprang, Principal David Heneke, Principal
CECL Update - What Should Your Bank Be Doing Right Now? Todd Sprang, Principal David Heneke, Principal OVERVIEW CECL Overview Transitioning from incurred loss to lifetime loss Form an Implementation Committee
More informationFASB's new credit impairment model: At a loss for what to do The Dbriefs Financial Executives series
FASB's new credit impairment model: At a loss for what to do The Dbriefs Financial Executives series Bob Uhl, Partner, Deloitte & Touche LLP Jon Howard, Partner, Deloitte & Touche LLP Jonathan Prejean,
More information33 LIBERTY STREET, NEW YORK, NY July 21, 2016
33 LIBERTY STREET, NEW YORK, NY 10045-0001 PATRICIA SELVAGGI ASSISTANT VICE PRESIDENT July 21, 2016 To: The Individual Responsible for Filing the Consolidated Report of Condition and Income for Edge and
More informationFORM 10-Q FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON D.C
FORM 10-Q FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON D.C. 20429 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2018
More informationAccounting Update for Financial Institutions
2013 CliftonLarsonAllen LLP Accounting Update for Financial Institutions September 16, 2013 3:15 pm 4:15 pm 11 Topics 1. ALLL 2. TDRs 3. Acquired Loans 4. Other Real Estate Owned 5. Investments 6. Proposed
More informationCredit impairment. Handbook US GAAP. March kpmg.com/us/frv
Credit impairment Handbook US GAAP March 2018 kpmg.com/us/frv Contents Foreword... 1 About this publication... 2 1. Executive summary... 4 Subtopic 326-20 2. Scope of Subtopic 326-20... 14 3. Recognition
More informationFORM 10-Q FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON D.C
FORM 10-Q FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON D.C. 20429 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: September 30,
More informationTrey Turnage, CPA Gordon Dobner, CPA
CECL Breaking Down the Final Standard July 27, 2016 Trey Turnage, CPA Partner tturnage@bkd.com Gordon Dobner, CPA Director gdobner@bkd.com 1 TO RECEIVE CPE CREDIT Participate in entire webinar Answer polls
More informationJuly 22, The Chief Executive Officer of Each U.S Branch and Agency of a Foreign Bank Located in the Second Federal Reserve District
33 LIBERTY STREET, NEW YORK, NY 10045-0001 Scott Smentek ASSISTANT VICE PRESIDENT July 22, 2016 To: The Chief Executive Officer of Each U.S Branch and Agency of a Foreign Bank Located in the Second Federal
More informationJuly 1, To: The Officer Responsible for Filing the Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations
33 LIBERTY STREET, NEW YORK, NY 10045-0001 PATRICIA SELVAGGI ASSISTANT VICE PRESIDENT July 1, 2013 To: The Officer Responsible for Filing the Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign
More informationOverview of ASC (CECL)
Overview of ASC 326-20 (CECL) FASB Accounting Standards Update (ASU) 2016-13, Financial Instruments Credit Losses Topic 326 was approved in June 2016. FASB replaced the current incurred loss accounting
More informationReport of Independent Registered Public Accounting Firm 1-2. Consolidated Statements of Comprehensive Income 4
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 Contents Report of Independent Registered Public Accounting Firm 1-2 Consolidated Financial Statements Consolidated Balance Sheets 2 Consolidated
More informationFASB Releases the Final CECL Accounting Standard
FASB Releases the Final CECL Accounting Standard June 24, 2016 The Financial Accounting Standards Board s (FASB) latest Accounting Standards Update, ASU No. 2016-13, Financial Instruments Credit Losses
More informationWest Town Bancorp, Inc.
Report on Consolidated Financial Statements Contents Page Independent Auditor's Report... 1-2 Consolidated Financial Statements Consolidated Balance Sheets... 3 Consolidated Statements of Income... 4 Consolidated
More informationThe Chief Executive Officer of Each U.S Branch and Agency of a Foreign Bank Located in the Second Federal Reserve District
33 LIBERTY STREET, NEW YORK, NY 10045-0001 PATRICIA SELVAGGI ASSISTANT VICE PRESIDENT July 13, 2015 To: The Chief Executive Officer of Each U.S Branch and Agency of a Foreign Bank Located in the Second
More informationCurrent Expected Credit Loss Model
November 2012 Current Expected Credit Loss Model This presentation has been prepared to help constituents understand the current status of projects of the Financial Accounting Standards Board (FASB). The
More informationAccounting and Auditing Update. Erika Skouras, Senior Manager, Moss Adams
Accounting and Auditing Update Erika Skouras, Senior Manager, Moss Adams Over the Next Hour 2 Providing the group with an update on accounting standards and other accounting/industry related matters impacting
More informationFinancial Instruments Credit Losses (Subtopic )
Proposed Accounting Standards Update Issued: December 20, 2012 Comments Due: April 30, 2013 Financial Instruments Credit Losses (Subtopic 825-15) This Exposure Draft of a proposed Accounting Standards
More informationCECL An Analysis of the April 2016 CECL Draft Presented to the Transition Resource Group
CECL An Analysis of the April 2016 CECL Draft Presented to the Transition Resource Group By Randal Rabe Director at Credit Risk Management Analytics, LLC CECL An Analysis of the April 2016 CECL Draft Presented
More informationCECL Accounting Guide
CECL Accounting Guide Contents 04 INTRODUCTION Background 05 Guide Overview 07 CECL Scope and Highlights 08 Introductory Example 09 37 CREDIT QUALITY DISCLOSURES Credit Quality Indicators 38 Management
More informationEXHIBIT INFORMATION Financial Statements OFFERING
EXHIBIT INFORMATION Financial Statements OFFERING Consolidated Financial Statements (with Independent Auditors Report) TABLE OF CONTENTS Independent Auditors Report... 1-2 Consolidated Financial Statements:
More informationMortgage Market Monitor
MORTGAGE-BACKED SECURITIES Mortgage Market Monitor April 2018 Remittances Table of Contents Foreword... 3 Overview... 7 Section A: Serious Delinquencies... 8 I. Serious Delinquencies as % of Unpaid Principal
More informationAmerican Airlines Federal Credit Union. Financial Statements December 31, 2016 and 2015
American Airlines Federal Credit Union Financial Statements December 31, 2016 and 2015 Contents Independent auditor s report 1 Financial statements Statements of financial condition 2 Statements of income
More informationAllowance for Loan Losses A Practical Approach. May 19, 2013 Bart P. Ferrin, CPA Ferrin & Company, LLC
Allowance for Loan Losses A Practical Approach May 19, 2013 Bart P. Ferrin, CPA Ferrin & Company, LLC Accounting Standards Guidance FASB Guidance July 2010, the FASB issued Accounting Standards Update
More information2017 CEO & Board University What Boards Need to Know About CECL
2017 CEO & Board University What Boards Need to Know About CECL Jim McGough, CPA, CGMA MEMBER OFALLINIAL GLOBAL, AN ASSOCIATION OF LEGALLY INDEPENDENT FIRMS 2017 Wolf & Company, P.C. Introduction Jim McGough,
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-Q
(Mark One) x UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly
More informationSTATE DEPARTMENT FEDERAL CREDIT UNION
FINANCIAL STATEMENTS (With Independent Auditor s Report Thereon) TABLE OF CONTENTS Page INDEPENDENT AUDITOR S REPORT... 1 FINANCIAL STATEMENTS Statements of Financial Condition... 3 Statements of Income...
More informationACCOUNTING STANDARDS UPDATE
ACCOUNTING STANDARDS UPDATE Gordon J. Dobner, CPA, Partner BKD, LLP gdobner@bkd.com 713-499-4605 Objectives: 1. Review significant upcoming new accounting standards 2. Examine the level of potential impact
More informationYankee Farm Credit, ACA THIRD QUARTER 2018
Yankee Farm Credit, ACA THIRD QUARTER 2018 November 8, 2018 Dear Shareholder: Enclosed are the Association s consolidated financial statements for the third quarter of 2018. These statements should be
More informationPROPOSED NEW ACCOUNTING STANDARD. Major Impact on Allowance for Loan and Lease Losses
PROPOSED NEW ACCOUNTING STANDARD Major Impact on Allowance for Loan and Lease Losses Introduction The Financial Accounting Standards Board (FASB) began a joint project with the International Accounting
More informationWebinar: Latest Developments on CECL and Upcoming Changes to the Allowance for Credit Losses. September 8, 2016
Webinar: Latest Developments on CECL and Upcoming Changes to the Allowance for Credit Losses September 8, 2016 An Introduction CECL What s Changing? What s not Changing? Acceptable Methods Myths vs Facts
More informationFASB Insurance Contracts
GAAP and SEC Update FASB Insurance Contracts FASB Initiatives Short-Duration Contracts (Final Standard ASU 2015-09 Issued May 2015) Long-Duration Contracts (Beginning) Focused efforts on targeted improvements
More informationCELC Workshop Historical Loss Rate Model
CELC Workshop Historical Loss Rate Model Jim McGough, CPA, CGMA Michaela Bellefeuille, CPA MEMBER OF ALLINIAL GLOBAL, AN ASSOCIATION OF LEGALLY INDEPENDENT FIRMS 2017 Wolf & Company, P.C. Introduction
More informationFannie Mae 2009 Second Quarter Credit Supplement. August 6, 2009
Fannie Mae 2009 Second Quarter Credit Supplement August 6, 2009 1 These materials present tables and other information about Fannie Mae, including information contained in Fannie Mae s Quarterly Report
More informationNew Developments Summary
October 31, 2017 NDS 2017-07 New Developments Summary Transition Resource Group for Credit Losses Summary of issues as of October 6, 2017 Summary On June 12, 2017, the Transition Resource Group for Credit
More informationMortgage Market Monitor
MORTGAGE-BACKED SECURITIES Mortgage Market Monitor January 2017 Remittances Table of Contents Foreword... 3 Overview... 7 Section A: Serious Delinquencies... 9 I. Serious Delinquencies as % of Unpaid Principal
More informationGAAP & IFRS Updates: What you need to know
GAAP & IFRS Updates: What you need to know Claire Gemmell Account Manager Rhead Hatch Product Owner Learning Objectives Identify differences in the classification and measurement of financial instruments
More informationLOCAL GOVERNMENT FEDERAL CREDIT UNION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2016 AND 2015
CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED TABLE OF CONTENTS YEARS ENDED INDEPENDENT AUDITORS REPORT 1 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 3 CONSOLIDATED
More informationPractical insights on implementing IFRS 9 and CECL
Practical insights on implementing IFRS 9 and CECL We are pleased to present the fourth publication in a series 1 that highlights Deloitte Advisory s point of view about the significance of the Financial
More informationMortgage Market Monitor
MORTGAGE-BACKED SECURITIES Mortgage Market Monitor July 2017 Remittances Table of Contents Foreword... 3 Overview... 7 Section A: Serious Delinquencies... 8 I. Serious Delinquencies as % of Unpaid Principal
More informationMortgage Market Monitor
MORTGAGE-BACKED SECURITIES Mortgage Market Monitor December 2015 Remittances Table of Contents Foreword... 3 Overview... 7 Section A: Serious Delinquencies... 9 I. Serious Delinquencies as % of Unpaid
More informationJuly 14, To: The Individuals Responsible for Filing the Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations
33 LIBERTY STREET, NEW YORK, NY 10045-0001 PATRICIA SELVAGGI ASSISTANT VICE PRESIDENT July 14, 2015 To: The Individuals Responsible for Filing the Financial Statements of U.S. Nonbank Subsidiaries Held
More informationFINANCIAL REPORT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016 THE BANK OF N.T. BUTTERFIELD & SON LIMITED Q3 2016
FINANCIAL REPORT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016 THE BANK OF N.T. BUTTERFIELD & SON LIMITED Q3 2016 Unaudited Consolidated Financial Statements Table of Contents Page Consolidated Balance Sheets
More informationFannie Mae 2009 First Quarter Credit Supplement. May 8, 2009
Fannie Mae 2009 First Quarter Credit Supplement May 8, 2009 1 These materials present tables and other information about Fannie Mae, including information contained in Fannie Mae s Quarterly Report on
More informationRecent Developments in Accounting and M&A for Banks
2014 CliftonLarsonAllen LLP Recent Developments in Accounting and M&A for Banks Community Bankers of Washington Annual Convention September 11, 2014 CLAconnect.com Today s presenter Todd Sprang Todd is
More informationFannie Mae 2010 First Quarter Credit Supplement. May 10, 2010
Fannie Mae 2010 First Quarter Credit Supplement May 10, 2010 1 These materials present tables and other information about Fannie Mae, including information contained in Fannie Mae s Quarterly Report on
More informationFourth Quarter 2017 Investor Presentation
Fourth Quarter 2017 Investor Presentation March 16, 2018 Legal Disclaimer FORWARD-LOOKING STATEMENTS. Certain statements in this presentation may constitute forward-looking statements within the meaning
More informationDefining Issues September 2013, No
Defining Issues September 2013, No. 13-43 Redeliberations Begin on Impairment, Classification and Measurement of Financial Instruments At their September 2013 joint meeting, the FASB and IASB (the Boards)
More informationFannie Mae 2008 Q3 10-Q Credit Supplement. November 10, 2008
Fannie Mae 2008 Q3 10-Q Credit Supplement November 10, 2008 1 These materials present tables and other information about Fannie Mae, including information contained in Fannie Mae s Quarterly Report on
More information