The impact of more detailed CECL calculations.
Edge completed a CECL calculation on a particular $25mm portion of a bank’s CRE portfolio using our analytics platform to compare their CECL calculation to the Edge calculation. We incorporated detailed, loan-level analytics, default characteristics, and recovery data to generate a strong and defensible CECL calculation that was substantially less than the bank’s own calculation.
The results were astounding. Not only did more granular analytics return a much lower CECL calculation, but our tool also identified several loans within the portfolio that were extreme outliers. Below is a summary of the results.
This is just one example of how more granular analytics are easier to access and yield better results.
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