Choosing a Vendor for Automating the Incurred Loss Model
Like many financial institutions, The Bank of San Antonio had relied on Excel to calculate its allowance for loan and lease losses (ALLL). But the bank was growing quickly, and Andrew Reid, Executive Vice President and Chief Credit Officer at The Bank of San Antonio, recognized that it may not be the most efficient tool as the bank got bigger. “What happens when we’re a $1 billion bank? Or $1.5 billion? How are we going to manage that,” Reid thought. After exploring several vendors for ALLL and incurred losses, The Bank of San Antonio selected the Sageworks ALLL Solution from Abrigo. The bank was particularly impressed with Abrigo’s commitment to customer service, which closely aligned with their own values. “Abrigo’s mindset is very similar to ours – very customer-driven and customer-focused,” Reid said.
In addition to leveraging the Sageworks ALLL Solution, The Bank of San Antonio subsequently implemented the Sageworks Stress Testing Solution by Abrigo as well. By automating the incurred loss model and stress testing, the bank captured and stored the majority of its loan data nightly. This became a huge asset when The Bank of San Antonio began considering its methodology option for the current expected credit loss (CECL) standard. In March 2018, the bank entered into a new agreement with Abrigo to help with the transition to CECL.