Agricultural Economics Department

 

First Advisor

Jeffrey R. Stokes

Date of this Version

8-2022

Document Type

Thesis

Citation

A thesis presented to the faculty of the Graduate College at the University of Nebraska in partial fulfillment of requirements for the degree of Master of Science

Major: Agricultural Economics

Under the supervision of Professor Jeffrey R. Stokes

Lincoln, Nebraska, August 2022

Comments

Copyright 2022, Jared L. Stauffer

Abstract

Released by the Federal Reserve Bank in June of 2021, the Scaled CECL Allowance for Loss Estimator (SCALE) is meant to assist community banks implementing the new Current Expected Credit Loss (CECL) accounting standard. The efficacy of this method is important to community banks and financial institutions considering the use of SCALE to estimate expected future losses. Using quarterly Call Report data, two separate analyses of the SCALE method are conducted. First for qualifying community banks and second for Farm Credit Services of America, an agricultural credit association within the Farm Credit System. For the first quarter of 2022, both analyses find that credit loss allowances following CECL methodology were greater than those currently reported under the Incurred Loss Method, the former method to CECL. This analysis furthers research surrounding the CECL standard while showing potential outcomes for institutions using SCALE.

Advisor: Jeffrey R. Stokes

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