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Publication | BRG

CECL Reserving and Credit Benchmarking Quarterly Study | Q3 2021

Paul Noring, John DelPonti, and Joe Sergienko

Third-quarter 2021

COVID-19’s adverse impact on loan performance and 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act financial reporting and disclosure relief arrived simultaneous to the implementation of the controversial Current Expected Credit Losses (CECL) accounting standard for loan-loss reserving. Analysis and comparisons would have been difficult under any circumstances. However, the interplay of all three factors has made analyzing bank loan performance and reserving levels even more difficult over the last two years.

In a continuing effort to provide financial statement preparers and users more insightful information to benchmark activity better across a representative cross-section of banks (given asset size, geographic location, and business mix), BRG’s Financial Institution Advisory practice created the quarterly CECL Reserving and Credit Benchmarking Study. The study compares allowance levels, charge-offs, nonperforming loans (based on CARES Act classification/reporting relief), and other key credit metrics across multiple predominately domestic US banking institutions.

This sixth study in our series continues to analyze eleven representative banks that appeared in our first five studies. These banks have total assets as of September 30, 2021, ranging from $30 billion to $554 billion (and a $173 billion median).

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Paul Noring

Managing Director

Washington, DC

John DelPonti

Managing Director

Washington, DC

Joe Sergienko

Managing Director

Boston