ALLL / CECL

Our CECL module allows you to compare your current ALLL process with a variety of CECL- compliant loss methods, easily incorporate Q&E and forecast factors, and instantly produce complete disclosures and other key reports.

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Overview
Visible Equity provides comprehensive, intuitive ALLL / CECL software that allows you to easily segment your portfolio, calculate a base loss rate using a variety of CECL-compliant loss rate methods, incorporate qualitative and environmental factors and reasonable and supportable forecasts, analyze individual loans for impairment and expected loss, and instantly produce a comprehensive suite of reports and disclosures.
Step 1
Segment Your Portfolio
With Visible Equity, it is easy to create custom segments and classes (sub-segments) for use in your allowance analysis and reporting. Whether you're looking forward to new CECL requirements or performing more traditional allowance calculations, properly segmenting your portfolio forms the basis for solid analysis. We also make it easy to add a credit quality indicator, such as credit score, to your segmentation profile.
Step 2
Calculate a Base Loss Rate
One of the biggest changes CECL will bring to your allowance calculations is the use of “life of loan” loss methods as opposed to traditional one-year charge-off ratios. Visible Equity provides several CECL-compliant life of loan loss methods. We also provide traditional charge-off ratios for easy comparison between current allowance methodologies and CECL-compliant methodologies.
CECL - Compliant Loss Methods
We provide the following CECL-compliant life of loan loss methods:
Step 3
Make Q&E Adjustments
Once you have a base loss rate the next step is to make direct adjustments using either standard or custom Qualitative and Environmental (Q&E) factors, such as changes in lending policies, loan mix, charge-off and delinquency trends, and management expertise.
Step 4
Forecast Adjustments
The next step is to apply an adjustment for “reasonable and supportable forecasts”. A quantitative forecast can be thought of in two parts. The first part is the forecast itself. How are home prices going to trend? What are unemployment rates forecasted to be? Visible Equity applies a few different statistical methods to forecast these economic conditions. The next part is, once you have your forecast, how do these forecasts translate into an increase or decrease in my base loss rate? Visible Equity models the resulting adjustments, given the relationship between your charge-off data and historical and forecasted economic conditions.
Step 5
Individually Review
Our software allows you to easily individually review loans. Any asset that does not share similar risk characteristics with a suitable class should be reviewed on an individual basis using either discounted cash flow, fair value less cost to sell, or other appropriate loss estimation methods.
Step 6
Collectively Review
The basis of the CECL requirement is to review loans that share similar risk characteristics on a collective basis. The final step is therefore to bring the segmentation, base loss rate, Q&E and forecast adjustments, and the individually reviewed components all together to calculate the required allowance by collectively reviewing your portfolio(s). By collective review we simply mean to multiply the amortized cost basis of each pool, after subtracting out any loans reviewed on an individual basis, by the adjusted loss rate.
Features

  • Multiple Allowance Profiles

    Create multiple allowance profiles to easily compare results of different loss methods, including your current ALLL methodology.

  • Custom Segmenting

    Create custom segments, classes (sub-segments), and credit quality indicators.

  • Individually Review

    Individually review loans using discounted cash flow, fair value less cost to sell, or other methods, and incorporate the results into your allowance calculations and reporting.

  • Collectively Review

    An allowance calculation using “life of loan” loss methods, instead of a more traditional 1-year charge-off ratio.

  • Multiple CECL-Compliant Loss Methods

    Mix and match loss methods by class (sub-segment) using our state-of-the-art, CECL-compliant loss methods, including Static Pool, Vintage, Probability of Default, Discounted Cash Flow, and more.

  • Direct Adjustments (Q&E)

    Create direct adjustment profiles that use standard or custom qualitative and environmental factors to adjust your base loss rate.

  • Forecast Adjustments*

    Select the desired economic variables, then use our professional forecasts (or your own) and our CECL forecast models to calculate the adjustment to base loss rate.

  • Reporting

    Easily access standard reports from our report library, or build custom reports including required disclosures. Combine reports to create CECL-specific report packets.

  • *Contact Visible Equity for current availability
Data Warehousing
Store and manage all your data in one location. Data warehousing is the first pillar of our platform. We aggregate data from your core processor, third party processors, loan origination software, even your spreadsheets into our secure, accessible data warehouse. You get an unlimited amount of storage, access to your data 24/7, and unlimited users, queries, exports.
Analytics
We make state-of-the-art analytics easy, affordable, and accessible for banks, credit unions, and financial institutions of all shapes and sizes. Powerful analytics is the second pillar of our platform. We infuse your data with our advanced analytics to create the perfect recipe for analytic success! Whether you are analyzing risk, estimating losses, or looking for predictive marketing, we are committed to our goal of using analytics to help our clients make better, data-driven decisions.
Reporting & Visualization Software
Create actionable dashboards and custom reports. Once we have your data and we infuse our data and analytics, we’re ready to create some amazing reports with the third pillar of our platform - reporting software. Our software allows you to easily create and save lists, filters, and actionable dashboards and reports to help better understand and communicate key results. We work hard to make our reports be insightful and look professional. The software is available 24/7 with no per user, per report, or per anything fees.
"In advance of our recent NCUA examination, Visible Equity’s client success team helped me create a report set for our examiners. I appreciate the efficiency and thoughtfulness they demonstrated in responding to our inquiry and resolving our problem."
Tom Boos
CEO at Billings FCU
"We have been with Visible Equity since 2013. Since then we have decided to have them help us develop our CECL model. They have a very extensive library of standard reports and a very robust report-writing functionality if you choose to create your own reports."
Dean Uemura
EVP Support Services at Hawaii Community FCU
ALLL / CECL
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