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RMA, MST Partner on ALLL Training for Community Bankers


Nov 22 - The Risk Management Association and MST are partnering to deliver scenario-based training to community bankers on the allowance for loan and lease losses. The course, developed and presented by MST, will be offered initially Feb. 25-26, 2014, in Philadelphia at the RMA National Conference. Registration for the program is open to all community bankers who participate in or are concerned with ALLL estimations and is available via the Web at, or by phone, 800-677-7621.

In the comprehensive two-day training program, Estimating the Allowance for Loan and Lease Losses addresses the key estimating, regulatory and accounting challenges faced by community banks in determining their reserves - a bank’s most critical quarterly calculation.

“We are excited to be partnering with MST on this training in such a critical area of risk management,” noted Mark Zmiewski, director enterprise risk and product management at RMA. “MST is an education-based provider and the leading developer of ALLL solutions for community banks.”

“Sessions touch on everything from pooling loans to preparing for a new accounting standard,” explained Dalton T. Sirmans, MST CEO. “Attending bankers will benefit from information and best-practice approaches from experts in the various disciplines related to estimating the ALLL: regulatory, accounting, technology, and so on.”

The course is designed to allow attendees to apply lessons learned in working through various ALLL scenarios. Sessions include:

1. Pool Granularity (ASC 450-20) – A critical first step to estimating the ALLL is a meaningful organization of loans into pools, granular enough to categorize losses yet not so granular as to be anecdotal.

2. Migration Analysis – As migration analysis gains status as a alternate methodology for estimating the ALLL, it is important to understand the difference between historical loss and migration analysis, and how loss migration is used to track historical risk characteristics of loans experiencing eventual loss events.

3. Troubled Debt Restructuring (ASC 310-30) – It is often up to the individual financial institution to determine its own guidance for issuing, accounting for and determining when a debt qualifies for a TDR, which has resulted in a patchwork of rules and regulations that can vary greatly from organization to organization.

4. Unallocated Reserves – There are a variety of methods for determining reserve amounts that cannot otherwise be accounted for quantitatively or qualitatively in the bank’s system for determining its ALLL. Just what needs to be done to satisfy regulatory and accounting reviews?

5. Acquired Loans – Effective management of loan portfolios added through acquisition includes determining how to address acquired loans that must be accounted for under ASC 310-20 (formerly FAS 91) or ASC 310-30 (formerly SOP 03-3) rules.

6. Specific Impairment (ASC 310-10 loans) – What are the best practices in terms of policies and methodologies for impairment testing? Includes documenting loan-specific information such as cash flow calculations for loans where terms have been modified, multiple pieces of collateral for a single loan and multiple loans connected to a single item of collateral.

7. Qualitative and Environmental Factors – Learn best practices for objectively rating the impact of internal and external – qualitative and environmental – factors the bank has determined applicable to account for additional loan and lease losses not reflected in the historical losses.

8. ASU 2010-20 Footnote Disclosures – Learn about the FASB standards for “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” and the role and importance of SEC, call and disclosure reports in accommodating ASU 2010-20.

9. Preparing for Expected Loss Modeling – FASB is finalizing the details on its new standard for calculating the ALLL based on future or expected losses. How will that alter the bank’s approach to and system for estimating its ALLL?

10. Reporting & Analytics - Uncover new reports and graphs that improve estimating results and address documentation requirements.
About MST
MainStreet Technologies of Atlanta provides financial institutions throughout the United States with software solutions for analyzing and mitigating loan portfolio risk. Areas of focus include the allowance for loan and lease losses, loss migration, problem loan reporting, post-closing documentation perfection and related issues. MST solutions are configured for each institution, integrate with core systems, deliver greater adherence to policy, and exponentially improve efficiencies. Contact MST at 877-910-9789 or visit the MST website at