CECL Implementation FAQs: Progress as 2023 Approaches

With less than a few months to comply with the current expected credit loss model (CECL), many still have outstanding questions and concerns about their efforts to prepare. Whether your bank is rushing to implement or are already running in parallel, much can be learned from the experiences of those that have already adopted.

In this presentation, we discussed the most common questions financial institutions are asking related to CECL model development and readiness. What is the financial impact? How will a recession impact results? What does model documentation look like? All these and more will be addressed through the presentation led by Abrigo and ABA CECL experts.

Discussion Highlights

• Example CECL calculations for common loan segments (forecast and prepayment adjusted)
• Example CECL calculations for 12/31/2022 and 12/31/2023 (potential recession impact)
• Example CECL documentation

Speakers

Neekis Hammond, Abrigo’s Managing Director of Advisory Services, uses his unique expertise and 15+ years of experience in accounting/banking to help banks and credit unions develop strategies for navigating regulations efficiently. A licensed CPA, he specializes in the ALLL/CECL, stress testing, and portfolio analysis. Prior to joining Abrigo, Neekis worked in public and industry accounting, including as a Consultant with Elliott Davis Decosimo providing M&A-related consulting to financial institutions.

Mike is Senior Vice President, Tax and Accounting at the American Bankers Association. Joining the ABA in 2009, Mike has led industry efforts across a range of financial reporting issues with accounting standard-setters worldwide, as well as with the U.S. banking agencies. Historically, these issues have included mark-to-market accounting, liquidity and interest rate risk, troubled debt restructurings, and CECL. Mike is a regular speaker at accounting and investor forums, has contributed to the book The New Impairment Model under IFRS 9 and CECL, and is also author of the many CECL implementation discussion papers that are available at ABA.com/CECL. Mike has over thirty years of experience in various financial service industries, starting his career at EY. He has been controller of a life insurance company, CFO of an international charity and was also at the mortgage giant Freddie Mac.