Allowance for Loan and Lease Losses Quantifier

Like all banks, you spend significant time and effort managing the risk in the loan portfolio. Calculation of your bank's Allowance for Loan and Lease Losses (ALLL) is a key part of the risk management process and bottom line profitability. PCBB's Allowance for Loan and Lease Losses Quantifier (ALLLQ) helps your bank incorporate accounting and regulatory best practices by providing you with a systematic and repeatable process to calculate a meaningful assessment of your loss allowance.

Our service minimizes the financial impact (time and cost) on your institution by:

  • Giving you the flexibility to quickly choose from a variety of configurations/scenarios to better match your reserve to current and changing credit performance and economic conditions
  • Allowing you to focus on results and conclusions rather than on the task of accumulating and analyzing historic data
  • Saving your institution time and money by providing a comprehensive reporting and consulting solution to free up your staff for other activities.
  • Eliminating the need for software management (configuration, maintenance and upgrades)

When you work with PCBB, your bank will benefit from our years of experience partnering with banks just like yours. We bring the expertise needed to assist you in meeting regulatory expectations and improving risk management processes.

Comprehensive Reports

  • Executive summary includes both comparisons of bank performance to prior periods as well as industry benchmarks
  • Trends in performance are presented in both tabular and graphic forms
  • Multiple reporting perspectives supported
  • Back-testing vs. actual results provided
  • Includes support for footnote disclosures

Documentation

  • Detailed narrative evaluating conceptual approach and modeling considerations
  • Third-party validation completed
  • Key assumptions fully documented and disclosed

Support

  • Professional staff is available to review results with you and/or your board, examiners and auditors
  • Ongoing support to help your staff properly prepare for regulatory and accounting reviews

Multiple Conceptual Approaches are Available

  • Methodologies supported:
    • Single-grade migration to loss
    • Single-grade migration to default and loss
    • Dual-grade migration to default and loss
    • Probability of default and loss-given default (PD/LGD)
  • Consistent with ASC and Joint Policy Statement on ALLL
  • Separate consideration of government-guaranteed, cash-secured and assets carried at fair value
  • Quantification of loss associated from unfunded commitments accounted for separately
  • Qualitative factors:
    • Qualitative adjustments are supported at both the portfolio and grade level
    • Level and trend in defaults and losses are summarized to provide a basis to establish qualitative factors
    • Qualitative factors can be applied either as aggregate or granular adjustments

How Do I Get Started?