RALEIGH, N.C.–Sageworks, a financial information company that provides loan portfolio solutions, reported it has enhanced its solution for automating the calculation of an institution’s allowance for loan and lease losses (ALLL). With the update, credit union clients of Sageworks are now able to access peer data showing how the credit union compares to institutions of similar size and location, the company said.
“A common challenge institutions have with the ALLL is preventing subjectivity in the calculation, which can often take the form of adjustments made by the credit union to account for changes or projected performance,” Sageworks said. “The new ALLL benchmarks added to Sageworks ALLL will help credit unions overcome subjectivity by providing supporting documentation as to how the institution compares to other, similar institutions.
The company added information embedded in Sageworks ALLL is sourced from Sageworks Bank Information and is updated to incorporate the most recent filings.
Benchmarks are now available for Allowance to Total Loans, Allowance to Net Losses, Recoveries to Total Loans and Net Losses Earnings Coverage Ratio.
“This new embedded data source is just one way Sageworks ALLL helps credit unions document the reserve calculation. In addition to comprehensive ad hoc reporting that captures portfolio information,” it said. “Sageworks also incorporates real-time Federal Reserve Economic Data for documenting qualitative adjustments (Q Factors) to ASC 450-20 loss rates as well as a proprietary Sageworks Industry Score, which offers an objective industry analysis of loans within the credit union’s pools.”