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Hybarger & Associates

Serving Small to Mid-Size Community Banks for over Thirty Years

  • Who We Are
    • Firm's Founder and History
    • Officers
  • Who We Serve
    • Who Are Our Clients
  • What We Do
    • Asset / Liability Management >
      • Budgeting
      • Performance Analysis
      • Forecasting
      • Quality Control
      • ALM Board Reporting >
        • The Directors' Financial Digest
        • The Executive Management Series
        • The Account Level Forecasting Series
      • Alternative Planning Scenarios
    • Interest Rate Risk >
      • Reporting for Interest Rate Risk
      • Assumptions & Back-Testing
    • Portfolio Management & Accounting >
      • The InvestWise Reporting Series >
        • Portfolio Management Series
        • Financial Management Series
        • Econometric Series
      • "Total Return" Investment Strategy
    • Liquidity Risk Management
    • Capital Adequacy & Analysis
    • Dynamic Strategic Planning
    • Comprehensive Funds Management Policy
    • CECL Overview >
      • Historical Analysis
      • "Currently" Identifiable Risks
      • "Specific" Potential Risks
      • Potential "Future" Risks
      • Traditional Reserves vs CECL
    • General Consultation >
      • Holding Company Systems
      • Balance Sheet Pricing Strategies
      • Regulatory Reporting
  • What Our Clients Say
  • How We Interface
    • What happens when we become a Client?
    • How are Fees Determined?

CECL:
Current Expected
Credit Losses

("Cliff Notes")

CECL Overview

Primary Objective of CECL:

To have a sufficiently precise level of reserves so as not to need replacement provisions at time of loss.
Picture
  • Comprehensive Historical Assessment & Analysis
  • Assessment of "Currently" Identifiable Risks
  • Assessment of "Specific" Potential Risks
  • Assessment of Reasonably Identifiable and Potentially Probable "Future" Risks
  • Traditional Reserves vs CECL Reserves

"Experience Based" Reporting

All Analyses & Assessments
are Based Upon "Historically Verifiable Experience"

Experience Based rather than Anecdotally Based

To be based upon:
  • Average Annual Charge-Off Factor
         for each individual Risk Pool
  • Assessing the Current
         Principal at Risk for each
         individual Loan / Risk Element
  • Remaining Effective Life
         of each Loan in Years
  • Risk Profile for each Individual
         Loan / Risk Element
  • Originations of Loans
  • Current & Past Loan Volumes
  • Charge-Offs
  • Recoveries of Charge-Offs
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Forward Looking

  • Assessing Future Risk of Loss based upon Historical Evidence
  • Computed anew each Reporting Period (Monthly) 
  • Computational Methodology is Consistent throughout the Analyses

Major Elements of the Reserve Computation & Reporting

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Continue Reading:

  • Comprehensive Historical Assessment & Analysis
  • Assessment of "Currently" Identifiable Risks
  • Assessment of "Specific" Potential Risks
  • Assessment of Reasonably Identifiable and Potentially Probable "Future" Risks
  • Traditional Reserves vs CECL Reserves

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  • Who We Are
    • Firm's Founder and History
    • Officers
  • Who We Serve
    • Who Are Our Clients
  • What We Do
    • Asset / Liability Management >
      • Budgeting
      • Performance Analysis
      • Forecasting
      • Quality Control
      • ALM Board Reporting >
        • The Directors' Financial Digest
        • The Executive Management Series
        • The Account Level Forecasting Series
      • Alternative Planning Scenarios
    • Interest Rate Risk >
      • Reporting for Interest Rate Risk
      • Assumptions & Back-Testing
    • Portfolio Management & Accounting >
      • The InvestWise Reporting Series >
        • Portfolio Management Series
        • Financial Management Series
        • Econometric Series
      • "Total Return" Investment Strategy
    • Liquidity Risk Management
    • Capital Adequacy & Analysis
    • Dynamic Strategic Planning
    • Comprehensive Funds Management Policy
    • CECL Overview >
      • Historical Analysis
      • "Currently" Identifiable Risks
      • "Specific" Potential Risks
      • Potential "Future" Risks
      • Traditional Reserves vs CECL
    • General Consultation >
      • Holding Company Systems
      • Balance Sheet Pricing Strategies
      • Regulatory Reporting
  • What Our Clients Say
  • How We Interface
    • What happens when we become a Client?
    • How are Fees Determined?