Calculating and Maintaining the Allowance for Loan and Lease Losses (MLC540V)

Review the Elements and Thought Process in Establishing and Maintaining an Adequate ALLL Level

The Allowance for Loan and Lease Losses (“ALLL”) represents one of the most significant estimates in an institution’s financial statements and regulatory reports. It is a valuation reserve established and maintained by charges against the bank’s operating income and is an estimate of loans that may be uncollectible. The Allowance is watched not only by the major agencies responsible for supervision of the banking system, but also by the American Institute of Certified Public Accountants, the Internal Revenue Service and the Securities & Exchange Commission. All have similar but yet, conflicting perspectives on how much of an allocation should be contained in the ALLL. This session by Jeffery Johnson is designed to review the elements and thought process in establishing and maintaining an adequate ALLL level under the new guidance.

He will use case studies, slides, problem-solving skills, online exams, charts and step-by-step analysis to certain occurrences from the charts and graphs.

The specific topics to be covered in this Webinar include:

• How to utilize to calculate ALLL
• Establishment and Purpose of the ALLL
• Loan Grading and the impact on the ALLL
• General Framework required to establish the ALLL
• Use of technology to aid in the calculation of Historical Loss Rates
• Reinforce Concepts with Allowance Calculation Cases
• FFIEC Policy Statement on the ALLL Methodologies & Documentation
• Accounting 101

Who should attend:

Beginners and professionals in the banking, credit and financial services industry, followed by mid-management and upper-management.