Allowance for Loan and Lease Losses

At PKM, we know that regulators place a good deal of emphasis on the allowance for loan and lease losses (ALLL), especially since the economic downturn. We also know the penalties of a bank’s ALLL being underfunded can be steep. To confirm that your bank’s ALLL is in good shape, we not only review your methodology and ensure that you have documented qualitative factors, but also analyze your current loan portfolio with the intent of identifying any unforeseen risks.

Our ALLL review process includes:

  • Review and test procedures relating to the calculation of the ALLL
  • Agree amounts presented in the calculation to support
  • Review and test identification process for impaired loans
  • Review and test impaired loans for propriety
  • Review and test pool factors documented in the Bank’s ALLL Calculation
  • Review and test collateral valuation process for collateral dependent loans