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CECL Q&A - Segmentation

Abrigo

The FASBs Current Expected Credit Loss (CECL) model presents unique challenges for banking professionals. Figure 1: Improper segmentation can shift overall loss rates and would not be truly representative of actual losses under proper segmentation.

CECL 60
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Ag Lenders: Cultivate Growth with Effective Pricing, Structure

Abrigo

At the same time, you don’t want to unintentionally create actual losses before you have to. Pricing in risk Ag lenders must also look for opportunities in loan pricing to price in higher risk if it is present – either in the interest rate, origination fees, through offering a niche product or service, or in some other way.