Deputy Seminar, Denver, CO

CECL Readiness & Implementation Process

Planning & Readiness

Implementation

Modify policies, procedures, controls & disclosures

Pool segmentation & credit risk identification

Create committee & timeline

Data inventory & gap analysis

Model(s) selection & development

Model(s) finalization & parallel run

Banks should be active on these items now

Implementation Where Are Banks Today?  SEC banks have significantly increased implementation efforts  BKD performed a CECL survey in late 2017 in which 152 institutions responded varying in size :  Less than 50% of all respondents had analyzed pooling segmentation (38%) and data inventory and gaps (45%)  60% had created a committee and 93% had obtained education  Only 20% had started work on model selection & development  Top obstacles to implementation in order:  Data  Time/Resources  Regulator/Auditor Expectations  32% expect to engage a vendor and 44% where undecided  On average historic loan level data can be reliably obtained for 2 to 5 years