ProfitStars Adds CECL DataStore and Validation to Financial Performance Suite

MONETT, Mo., April 25, 2017

While the regulatory deadlines for CECL compliance are still years away, the time to gather data has already begun. Regulations require all financial institutions to significantly change their methods used to determine losses in the allowance for loan and lease losses (ALLL), a process that's been in place for more than 40 years. Previously, losses were reserved for when the loss on a loan became "probable," but CECL will require recognizing loss at origination and continuing throughout the life of the loan. This information is determined by analyzing the historic performance of similar loans, as well as several additional qualitative factors, adding time and extra steps to the process.

ProfitStars' CECL DataStore and Validation solution compiles and categorizes historic loan data, validates that the data required to calculate the new requirements has been received, and provides the ability to export the data from disparate systems into a standardized format. When used in conjunction with ProfitStars' CECL Analysis and Reporting^SM, financial institutions will be prepared with the data and reporting necessary to achieve CECL compliance.

Russ Bernthal, president of ProfitStars, commented, "We developed the CECL DataStore and Validation solution as a comprehensive and proactive step toward reaching CECL compliance. Streamlining the process saves time, ensures that the correct data is being used, and empowers financial institutions to move confidently ahead."

The CECL DataStore and Validation module is supported by statistical analysis performed by Deep Future Analytics, an industry leader in scenario-based modeling and a pioneer in credit risk modeling technologies. The solution is part of ProfitStars' Financial Performance Suite^SM, a configurable collection of innovative capabilities and services that allow financial institutions to develop a deeper understanding of their client portfolio, deliver optimal loan and deposit pricing, and drive client profitability.

Bernthal added, "A strategic approach to CECL compliance can take months or even years to implement. For this reason, banks and credit unions must begin the data collection and archiving process now in order to be ready for the upcoming deadline. Modeling results with time to spare enables banks and credit unions to respond early to any necessary modifications, properly forecast budget changes, and run parallel methodologies concurrently for comparison purposes, prior to full implementation."

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