Pawtucket Credit Union | Cuts ALLL Calculation Time in Half + Gains CECL Confidence

The Challenge: Spreadsheets Not Enough for CECL

In 2015, Pawtucket Credit Union had begun discussing automating its allowance calculation. At the time, Pawtucket calculated its allowance for loan and lease losses (ALLL) with Excel spreadsheets, which was timeconsuming and cumbersome. The process worked, but on top of the extensive time it took internally, it also gave auditors grief, too, said Valerie Pimenta, SVP and CFO at Pawtucket Credit Union. Pimenta received an email from Pawtucket’s external auditor about an Abrigo CECL event in Boston, accelerating their interest in investing in an ALLL solution.

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“I feel much better already, having something that I have no issues with and that I’m confident in – I’m glad I’m in early. Plus, I know the auditors like the application.

Valerie Pimenta, SVP, CFO PAWTUCKET CREDIT UNION

The Solution: Why Abrigo

After the September 2015 event, Pimenta arranged a demo to learn more about Sageworks ALLL and compared it with another vendor. Pimenta was very satisfied with the intuitive application and design of Sageworks ALLL, and Pawtucket chose Sageworks (now Abrigo) to be its ALLL vendor.

In 2015, there weren’t many CECL players, Pimenta noted. “[Abrigo] was just further along than everyone else at the time,” she said. “[Abrigo] was so proactive with CECL – they had whitepapers, they were holding webinars; they were really deep into CECL so early.”

Implementation

Pawtucket Credit Union signed the contract with Abrigo in November 2015 and began implementation the following month. Pimenta ran parallel calculations in March 2016 and went completely live with Sageworks in April. The swift implementation process boiled down to two key concepts: Having an implementation champion at the institution and a solid support team at Abrigo.

Pimenta was heavily involved in allowance calculations prior to implementing Sageworks and had previously been a controller for many years, so her knowledge of setting up calculations, understanding the codes and knowing how loans worked made the mapping process significantly easier. She recommends having someone on staff fully invested in learning the product and, if the person spearheading the project doesn’t have knowledge in lending, to have someone from the lending area prepared to help. “You’ve got to give it the attention,” Pimenta advised. “The more you put in, the better results you’re going to get out.”

Abrigo’s support team was also instrumental in Pawtucket’s success. “I think the whole process was set up and implemented very well by the Abrigo team,” Pimenta said. “A couple of times I’ve had to submit something online and, practically before I finish it, I get a phone call. It makes the investment so much better when the support is that good. You don’t have many vendors where you’re on their radar like that.”

I think the whole process was set up and implemented very well by the Abrigo team. A couple of times I’ve had to submit something online and, practically before I finish it, I get a phone call. It makes the investment so much better when the support is that good. You don’t have many vendors where you’re on their radar like that.”
Valerie Pimenta, SVP, CFO PAWTUCKET CREDIT UNION

The Result: CECL-Ready

While SEC filing financial institutions must comply with the FASB’s current expected credit loss (CECL) standard in Q1 2020, credit unions’ effective date isn’t until Q1 2022. Because of this, many credit unions have been putting off CECL preparations.

Pawtucket Credit Union, on the other hand, is gearing up early for CECL. Pawtucket now holds over $2 billion in assets and knew that it would need something robust enough to make everyone – board members, C-suite management, auditors – comfortable with the calculations. Pawtucket has been proactive in CECL preparations already. Pimenta is confident that the model will work well for Pawtucket.

“I feel much better already, having something that I have no issues with and that I’m confident in – I’m glad I’m in early,” said Pimenta. “Plus, I know the auditors like the application – that’s how we ended up hearing about it in the first place.”

 

A Partnership Built for Success

Partnering with Abrigo for ALLL has been a positive experience for Pimenta and Pawtucket Credit Union. Implementation can be a major pain point for institutions partnering with a third-party vendor, but by having an ALLL champion and a solid external support team from Abrigo, the implementation process was quick and easy for Pawtucket. From an efficiency standpoint, Sageworks ALLL has significantly simplified the calculation process and has cut Pimenta’s ALLL calculation time in half. Equally important, the solution has given confidence to Pawtucket’s employees, board members, and auditors as the credit union approaches CECL implementation.

Transition to the CECL Standard with Confidence
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