PCBB Announces Comprehensive CECL Solution for Financial Institutions
Bankers' Bank Provides Custom Consulting and 6-3-1 Process Specifically Designed for Financial Institutions with Less than $10 Billion in Assets
WALNUT CREEK, Calif. — October 24, 2017 — PCBB, a leading bankers’ bank serving the entire U.S., today announced the availability of their new Current Expected Credit Loss (CECL) solution for financial institutions. 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. Based on the specific needs of institutions with less than $10 billion in assets, PCBB created a multi-method process to ease transition to CECL and ongoing reporting. It is the only seamless, outsourced CECL solution designed by a financial institution for use by 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 Consulting Services, PCBB. “The change to CECL is going to happen, but most financial institutions don’t 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 won’t work for smaller institutions and would be a waste of time, resources and would not accurately model expected loss.”
Multiple Methods Supported Simultaneously
PCBB works with accounting and credit teams to evaluate all loan groups simultaneously and align them to the most suitable reporting methods
PCBB provides a fully-outsourced solution to financial institutions under $10B in assets. This eliminates the need for time-consuming software installation and training. Additionally, PCBB’s CECL solution provides simultaneous results for multiple methods, allowing financial institutions to move seamlessly to alternative methods when market conditions warrant. PCBB built its solution based on the lessons and challenges it learned in preparing for CECL, coupled with its decades of risk management expertise.
Consulting partner that works closely with financial institutions — An integral part ofthe CECL solution is for PCBB’s consulting team of financial service professionals to work with institutions to help them through a four-step process to determine the optimal roadmap for CECL implementation. The process includes taking an inventory and analyzing historical loan loss data, assessing loan segments for loss methods, performing calculations for each portfolio, and summarizing results with advisory services. As a partner, PCBB CECL consultants will assist customers as they prepare for audits and exams.
Customized, simultaneous 6-3-1 process — PCBB’s CECL solution is the only offering to run six methods simultaneously - closed pool, closed pool vintage, vintage default curve, open pool, migration, PD/LGD and discounted cash flow models. This allows financial institutions, with PCBB’s guidance, to mix and match different methods to various portfolio segments. Additionally, this flexibility permits a seamless transition from one method to another as conditions warrant.
Easy-to-use and transparent tools — The PCBB CECL solution 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 examiner and auditors’ needs.
Centralization on a flexible platform — PCBB 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.
