CECL Solutions

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Brean Strategic: Customized FASB CECL Solutions

Brean Strategic is a New York based analytical consulting and technology firm that works with many of the largest financial institutions in the country; including money center banks, federal home loan banks and state regulators.  Among Brean’s tools is a “top down” CECL solution which is available to your institution at an affordable price and enables your institution to specify an outlook for macroeconomic conditions which reflects the view of your institution’s management.  Brean Strategic benefits from being an in house analytical arm of a $1.25 billion balance sheet fixed income broker-dealer investment bank with offices nationwide.

  • Affordable TurnKey PreConfigured CECL Solutions

  • CECL Analytics Integration on Existing Reporting Infrastructure

  • CECL’s Complexity Streamlined & Simplified

  • Free CECL Reporting/Analytics Trial
  • Low Cost Automated CECL Periodic Reporting

  • Detailed CECL Dashboards for Different Stakeholders

  • CECL Reporting from Experienced NY Banking Professionals

At Brean Strategic, we have developed three solutions to enable your financial institution to satisfy  CECL requirements. Brean’s CECL solutions are affordable and preconfigured to work seamlessly on your existing technology and data infrastructure.  Our solutions simplify CECL and provide detailed business intelligence dashboards for detailed CECL reporting for different stakeholders:

1. CECL Top Down Expected Loss Model Institutions can choose a forecasted macroeconomic scenario which best represents the view of their management. Our model has calculated the expected loss for each scenario based on a statistical regression analysis of similar banks in the region. The tool also enables an institution to review their historical performance by region alongside economic indicators.

2. CECL Bottom Up Model For institutions which want more granularity in their forecast, Brean constructed a loan level model based on the statistical analysis of the historical performance of a universe of securitized and bank whole loans.
3. CECL Data Warehouse Many of our clients find it difficult to aggregate piecemeal data which might be culled from a combination of different data sources such as asset-liability management extracts, origination and underwriting data, and servicer data. Brean’s team of data scientists can help financial institutions aggregate their data into a data warehouse, enrich the data with local home prices and unemployment and render this data on a portal for use in risk reporting. In one representative data analytics engagement, Brean built a loan origination and performance database from 400 million data points which is now relied upon by leading asset managers and investors for a multi-billion dollar sector.

CECL, What is CECL, CECL Fasb, CECL Model Example Peer Analysis and Surveillance Tools

Compare your growth to those in your state, region or the nation. Dynamic lists can be customized for institution size and location. Other metrics are available also.



CECL, What is CECL, CECL Fasb, CECL Model Example Historical “through the cycle” data for 7 loan sectors

Available CECL models include: CRE, C&I, residential mortgage, HELOC, construction, auto, credit cards. Brean provides forecasted expected loss estimates in varying macroeconomic conditions.

CECL, What is CECL, CECL Fasb, CECL Model Example Online “Top Down” Sector & Region Level Models

Brean’s top down CECL models were designed by our in house PhD who has worked extensively with thousands of institutions sector level data to allow users to forecast expected losses by sector in various macroeconomic scenarios.

CECL, What is CECL, CECL Fasb, CECL Model Example Online Loan Level Models

Brean’s loan level model has been informed by millions of loans studied through multiple decades. Our technology allows users to easily input their own data tape in their format into our model and produce results in minutes.

If you are interested in a Free Trial with the Brean's Loan Level Model, please email us with "Free Trial" as subject. A few additional security measures are need before processing your information.



Under existing Generally Accepted Accounting Principals (“GAAP”), allowance for loan and lease losses (“ALLL”) are recognized when it is “probable” a loss has been incurred. The financial crisis was exacerbated by the inability of market participants to understand banks’ exposures and expected credit losses. Money markets seized up, banks struggled to access credit and bank equity and debt sold off. A key premise of the stress tests then Treasury Secretary Geithner rolled out in February 2009 was to facilitate a “forward looking assessment” about the risk on bank balance sheets. The existing requirement a loan loss must be incurred before recognized in ALLL delayed the recognition of loan losses, the July 2009 report of FASB’s Financial Crisis Advisory Group concluded, citing the results of the first stress tests. Whereas the old incurred loss regime required an ALLL when an asset is deemed “impaired” because it is “probable that a loss has been incurred,”[i] the changes promulgated under CECL compel ALLL based on the “net amount expected to be collected” based upon “management’s current estimate of expected credit losses on an asset.”[ii]

The new CECL regime is not proscriptive. CECL can be calculated “on a collective or individual basis,” for example.[iii] At the highest level, a firm’s CECL must be grounded in: 1) current conditions and relevant quantitative and qualitative factors which relate to the environment in which the lender operates and which are specific to the borrower[iv] such as unemployment rates, property values, commodity prices or delinquency;[v] 2) internal or external data or a combination of both;[vi] and, 3) reasonable and supportable forecasts.[vii]

[i] FASB 310-10-35-4 (superseded by Accounting Standards Update No. 2016-3
[ii] FASB 326-20-30-1.
[iii] FSAB 326-20-30-7.
[iv] FASB 326-20-30-7 (in estimating expected credit losses on financial assets, “[a]n entity shall consider relevant qualitative and quantitative factors that relate to the environment in which
the entity operates and are specific to the borrower(s)”)
[v] FASB 326-20-30-9.
[vi] Id. (explaining “an entity is not required to search all possible information that is not reasonably available without undue cost and effort.)
[vii] FASB 326-20-30-9 (noting “[a]n entity shall not adjust historical loss information for existing economic conditions or expectations of future economic conditions for periods that are beyond the reasonable and supportable period.”)


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