Loan Loss Reserves: A Financial Institution's Perspective

• Overview

The safety and soundness of your financial institution depends on your allowance for loan losses (ALL). Your ALL carries with it several obligations, including compliance with GAAP, regulatory guidance, and your institution's own internal policies and procedures.

This OnDemand Webinar will help you navigate the current requirements for ALL methodology. You will gain an understanding of historical loss components, specific reserves, and other qualitative and quantitative factors impacting the calculation. We will also discuss how impaired loans and troubled debt restructurings should be factored into the calculation, along with the resulting requirements for financial statement disclosures.

Add to this FASB's 2012 proposal to adopt an expected loss approach rather than the current incurred loss approach, and now is a particularly important time to gain control of your ALL methodology.

You will leave this program understanding how to gain control of the challenges and opportunities that lie ahead in 2013 and beyond.

Learning Objectives:

• You will be able to review ALL methodology and documentation.
• You will be able to discuss financial institution policies.
• You will be able to identify financial statement disclosures.
• You will be able to explain FASB's December 2012 proposal.

Authors

Agenda

ALL Methodology and Documentation

• ASC 310 (FAS 114) Specific Impairment Reserves

• ASC 450 (FAS 5) Considerations

• Qualitative and Quantitative Factors

• Financial Institution Policies

• Board Reporting

• Regulatory Guidance

Financial Statement Disclosures

• Troubled Debt Restructurings

• Impaired Loans

• Risk Characteristics

FASB's December 2012 Proposal

• Expected Loss Model

• Similarities and Differences Compared to Current Incurred Loss Approach