A Deep Dive into CECL at MST National ALLL Conference

A look at opening day sessions of the MST 2017 National ALLL Conference

By the conclusion of the first day of the MST 2017 National ALLL Conference, you should have a solid concept, from both high level analyses and answers to your specific questions and concerns, of what you should being doing now, with your current ALLL estimations as well as determining your pathway to expected credit loss compliance. We have built the sessions and assembled the experts, designed the general presentations and workshops, to ensure an unparalleled depth of information and insights on the allowance and CECL.

A look at Conference Day #1, Tuesday, May 23:

What CECL Is and What It Is Not.

There’s a lot of noise out there – some of it, not so accurate – that has given rise to many questions and concerns. For example: Will CECL be scalable by size of institution? Experts Mike Lundberg and Graham Dyer are the “myth busters,” here to help you cut through the clutter. They have had their hands on CECL from its inception and continue to serve lenders and the industry as advisors, on steering committees, as presenters and advocates.

Mike Lundberg is the National Director of Financial Institutions for RSM US, primarily responsible for the audit methodology, tools, training, and audit quality for the firm’s banking, credit union and finance company practice.

Graham Dyer, a Grant Thornton Partner, is a member of FASB’s CECL Transition Resource Group and the IASB’s IFRS 9 Impairment Transition Group (ITG).

Current GAAP: ALLL You Need to Know.

It will be 2020 before most institutions stop estimating according to the incurred loss model.  According to recent published articles, auditors citing internal controls shortcomings have increased and the loan loss reserve has been singled-out in several of these cases. So lenders need to keep their eyes on the incurred loss ball as they progress down their paths to a compliant CECL methodology. Garry Rank and Will Neeriemer are here to help you stay focused.

Garry Rank, a highly regarded National ALLL Conference speaker , and currently working with MST Advisory Services, spent three decades at , a top 30 regional accounting firm, specializing in corporate financial auditing, accounting and financial reporting as well as consultation on governance, financial systems and internal controls.

Will Neeriemer, a partner in the DHG Financial Services practice, has more than 15 years providing attest and advisory services to financial institutions, and extensive experience with the accounting and auditing issues related to mergers and acquisitions, mortgage banking and complex valuations.

CECL Implementation Blueprint.

Your multi-year plan for developing and implementing a CECL solution will be guided by four disciplines: accounting, modeling, economics and engineering. This session will examine how they interact in a CECL Implementation Blueprint that includes:

• A plan for managing implementation through the initial reporting periods
• GAP analysis
• Methodology options & recommendations
• Implementation of the chosen method(s)

Lenders’ blueprints will differ, but there are general steps to take toward developing yours – the kind of steps Pam Molvar and HomeStreet Bank have taken. There is a lot to glean from Ms. Molvar’s experiences and lessons learned, and from her co-presenting MST Advisory consultants, Chris Emery, Dorsey Baskin and Shane Williams.

Pam Molvar is Senior Vice President, Credit Risk Analytics and Policy Manager at HomeStreet Bank based in Seattle Washington.  In her current role, she is responsible for overseeing the Allowance for Loan and Lease Losses (ALLL), loan and ALLL related external financial and regulatory reporting, internal credit reporting to the Board of Directors, loss forecasting, and loan and credit related policies. 

Chris Emery is a senior advisor for MST Advisory and MST Senior Engineer who works directly with lenders to guide them down their paths to CECL compliance.

Dorsey Baskin is recently retired from the National Professional Standards Group of Grant Thornton LLP, serving as a consultant to MST Advisory clients. His roles at Grant Thornton included national leadership of the firm’s innovation function, technical accounting and audit advisor for the banking industry audit and consulting practice, and national professional practice director.

Shane Williams, a senior advisor for MST Advisory, works with banks and credit unions to set priorities, identify data needs, implement allowance technology, run shadow analyses and identify appropriate methodologies in preparation for accounting for loan losses under CECL. He was formerly with Fiserv helping lenders implement financial services technologies, then as a consultant to bankers with Price Waterhouse Cooper.

Compliant Methodologies and Modeling.

Lenders will choose from multiple methodologies that have been deemed appropriate for CECL. Your job will be to decide which methodologies are best for your institution, your pools and portfolios. A trio of presenters will help you make those decisions by providing insights into the various methodologies. Then in afternoon workshops with Moss Adams Partners Mike Thronson and Gabe Nachand, you can dive a little deeper into those that you identified in the morning session as potentials for your institution.

Michael Gullette is vice president of accounting and financial management for the American Bankers Association (ABA). He has been the voice of the ABA, and therefore the industry, to FASB throughout the development of CECL.

Vince Milano is Director, Accounting & Assurance Services Postlethwaite & Netterville, APAC. He has more than 35 years of public accounting experience. Prior to joining P&N, he was a partner in a large regional public accounting firm.

Chris Emery is a senior advisor for MST Advisory and MST Senior Engineer who works directly with lenders to guide them down their paths to CECL compliance.

Workshops.

Tuesday afternoon’s workshops will help you convert concepts to your own realities. Smaller sessions on transitioning to CECL, including managing projects and costs, addressing pain points, developing strategies for selecting models, and the impact of acquisitions on CECL estimating, will allow you to grill our expert presenters with your own questions and concerns.

Tuesday’s sessions will put you on firm footing with a better understanding of where you are today and where you’re headed, from current GAAP to managing the projects and your pathway to CECL compliance.

For more details on the MST 2017 National ALLL Conference, including sessions and speaker bios, go to: http://www.nationalalllconference.com. Or go ahead and register now for the conference. Seating is limited. Registration ends when full or March 31.