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.

Because of its significance, each institution has a responsibility for developing, maintaining and documenting a comprehensive, systematic and consistently applied process for determining the amount of the ALLL and the Provision for Loans & Lease Losses. To fulfill this responsibility, each institution should ensure controls are in place to consistently determine the ALLL in accordance with:

  • Generally Accepted Accounting Principles
  • Institution’s stated policies and procedures
  • Management’s best judgment
  • Relevant supervisory guidance

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 program is designed to review the elements and thought process in establishing and maintaining an adequate ALLL level under the new guidance.

The specific topics to be covered in this seminar include:

  • How to utilize Sageworks software to calculate the ALLL
  • Establishment and Purpose of the ALLL
  • Loan Grading and the impact on the ALLL
  • General Framework required to establish the ALLL
  • Review of Regulators expectations for the ALLL as set forth in:
    • FASB ASC 450-20 Contingencies – Loss Contingencies (formerly FASB 5 – Accounting for Contingencies)
    • FASB ASC 310-10-35-2 through 30, Receivables-Overall-Subsequent Measurement-Impairment (formerly FASB 113 – Accounting by Creditors for Impairment of a Loan)
    • Interagency Policy on the ALLL issued in 2006 which revises the Policy issued in December 1993
    • FFIEC Policy Statement on the ALLL Methodologies & Documentation
    • Use of technology to aid in the calculation of Historical Loss Rates
  • Reinforce Concepts with Allowance Calculation Cases

After completing this course, the participant will have an enhanced understanding of the importance of creating and maintaining an adequate Allowance that is legally defensible and insures the bank is operating in a safe and sound environment.

  • CEO’s, Presidents & Board Members
  • Credit Administrators
  • Senior Credit Officers
  • Loan Review Officers
  • Compliance Officers
  • Senior Loan Officers
  • Commercial/Consumer Loan Officers
  • Loan Operation Officers
  • Loan Administrators


"Jeffery did a fantastic job all week keeping us engaged in the material and involved. He was a fantastic coordinator & lead professor"

Cliff Knowlton, Prime South

"WONDERFUL!! Great Instructor, great information. Will definitely attend more of Jeffery's classes".

Ansley Oliver, Georgia Commerce Bank

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