PCBB Announces Comprehensive CECL Solution for Community Financial Institutions
Correspondent Bank Provides an Intuitive CECL Online Platform with Advisory Support
WALNUT CREEK, Calif. – October 24, 2017 – PCBB, a leading correspondent bank serving community financial institutions throughout the US, today announced the launch of their new Current Expected Credit Loss (CECL) solution, CECL FIT®.
Community Financial Institutions need a CECL Partner, Not Mega bank Software
A recent study by PCBB found that only 11 percent of CFOs of financial institutions (under $10B in assets) believe they are prepared for the CECL transition. PCBB created a multi-method process to ease transition to CECL and meet regulatory compliance. It is the only seamless, outsourced CECL solution designed by a correspondent bank tailored for community financial institutions.
“The mandatory shift from the Incurred Loss model to the Current Expected Credit Loss model will have a significant impact on financial institutions, and the time to start preparation is now,” said Doug Hensley, Senior Vice President, and head of Advisory Services, PCBB. “The change to CECL is going to happen, but most community financial institutions do not need a high-priced, restrictive, one-solution-fits-all software approach that is designed for the mega-banks; they need a partner who will work with them throughout the implementation and beyond. Our research has shown that some of the methodologies developed for the larger banks will not work for smaller institutions and would be a waste of time, resources and would not accurately model expected loss.”
“The mandatory shift from the Incurred Loss model to the Current Expected Credit Loss model will have a significant impact on financial institutions, and the time to start preparation is now,” said Doug Hensley, Senior Vice President, and head of Advisory Services, PCBB. “The change to CECL is going to happen, but most community financial institutions do not need a high-priced, restrictive, one-solution-fits-all software approach that is designed for the mega-banks; they need a partner who will work with them throughout the implementation and beyond. Our research has shown that some of the methodologies developed for the larger banks will not work for smaller institutions and would be a waste of time, resources and would not accurately model expected loss.”
Benefits of CECL FIT:
PCBB provides a fully outsourced CECL solution to community financial institutions. This eliminates the need for time-consuming software installation and training. CECL FIT solution provides simultaneous results for multiple methods, allowing community financial institutions to move seamlessly to alternative methods when market conditions warrant or their portfolio adds more complexity like HTM securities. PCBB built its solution based on the lessons and challenges it learned in preparing for CECL, coupled with its decades of risk management expertise.
- Advisory expertise provided to help meet CECL compliance – An integral part of CECL FIT is the PCBB’s advisory team of financial service professionals that work with institutions to help them with CECL implementation, guidance, and regulatory compliance. CECL FIT takes inventory and analyzes historical loan loss data, assesses loan segments for loss methods, performs calculations for each portfolio, and summarizes results in fully transparent documentation. As a partner, PCBB’s advisors will assist its customers every step of the way as they prepare for audits and exams.
- Three tier options – CECL FIT offers three tiers (Basic, Deluxe, and Pro), to meet the different needs and loan portfolio complexity of each institution’s loan portfolio. The three tiers offer a range of one to multiple methods. Operational, implementation and pre-exam preparation are available and varies by tier.
- Easy-to-use and transparent reporting – CECL FIT provides not only board and management level insights, but also includes reports tailored for CFOs and CCOs on the nature of the loan, performance, cash flow, loss calculation, and peer comparison. Most importantly, the solution includes transparent and comprehensive documentation tailored to examiners and auditors’ needs.
- Centralization on a flexible, online platform – CECL FIT enables institutions to move their data and information to a flexible platform that is independent from the core system. This platform will support time series analysis needed for both loss rate calculations and the calculation of prepayment rates required to determine life of loan. Additionally, this platform supports other complex analyses needed for both qualitative and forward look factors.
For more information about our enhanced CECL solution, visit CECL FIT webpage or for more CECL insights, visit our CECL resources page.
PCBB believes in the power of local financial institutions to be the catalyst of small business growth and to enable communities to thrive. Our team is committed to providing not only the tools and knowledge our customers need to serve their clients, but also the partnership and trust they deserve.
Our robust suite of competitive services includes cash management and international services, lending services, hedging solutions, and profitability and risk management advisory services. These solutions help community financial institutions maximize revenue, increase efficiency, and manage risk.
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Contact:
Nancy Ozawa
PCBB
info@pcbb.com
(888) 399-1930 x177