--- title: "Featured Guest: Spotlight Financial" description: This guest blog is a special feature authored by Michael Stinson, CEO of Spotlight Financial and Reid Ten Kley, CPA, President of Spotlight Financial. image: https://blog.plansmith.com/hubfs/Ipad_High_Res.jpg --- [CALL TOLL-FREE 1-800-323-3281](https://www.plansmith.reachproductions.net/project/call-toll-free-1-800-323-3281/) [![Plansmith](https://blog.plansmith.com/hs-fs/hubfs/Plansmith-Logo.png?width=764&height=135&name=Plansmith-Logo.png "Plansmith")](https://www4.plansmith.com) - Solutions - [Budgeting](https://www4.plansmith.com/budgeting/) - [ALM](https://www4.plansmith.com/alm) - [ALM Advisory Services](https://www4.plansmith.com/alm/advisory-services/) - [CECL](https://www4.plansmith.com/cecl/) - [Strategy](https://www4.plansmith.com/strategy/) - [Market Intelligence](https://www4.plansmith.com/market-intelligence/) - Products - [StrategyGPS](https://www4.plansmith.com/strategygps/) - [Compass](https://www4.plansmith.com/compass/) - [BankersGPS](https://www4.plansmith.com/bankersgps/) - Resources - [Blog](https://blog.plansmith.com/) - [Videos](https://plansmith.wistia.com/projects/7qemazkqii) - [Compass Tutorials](https://info.plansmith.com/compass-tutorials) - [Lunch N’ Learn](https://info.plansmith.com/lunch-n-learns) - [Webinars](https://www4.plansmith.com/webinars/) - [About](https://www4.plansmith.com/about/) - [Schedule A Discovery Call](https://www4.plansmith.com/contact-us/) - [CALL TOLL-FREE 1-800-323-3281](tel:8003233281) # Plansmith Blog # Featured Guest: Spotlight Financial Posted by [Michael Stinson & Reid Ten Kley, CPA](https://blog.plansmith.com/author/michael-stinson-reid-ten-kley-cpa) on 5/21/19 1:07 PM - [Tweet](https://twitter.com/share) **FASB Approves WARM Methodology for CECL** Community banks and credit unions looking for practical advice on how to implement the new CECL standard received a helping hand from the agency that authored the oft dreaded accounting rule. In a [January 2019 Staff Q&A](https://www.fasb.org/cs/Satellite?c=Document_C&cid=1176171932989&pagename=FASB%2FDocument_C%2FDocumentPage), the Financial Accounting Standards Board (FASB) stated that the weighted average remaining maturity (WARM) method is an acceptable method for less complex financial institutions to estimate expected credit losses. The FASB Q&A Comment also provided a couple different examples on the application of the WARM methodology to comply with CECL, and these examples do a good job of explaining the mathematics behind the calculation. If you haven’t done so already, you can read the FASB Q&A Comment [here](https://www.fasb.org/cs/Satellite?c=Document_C&cid=1176171932989&pagename=FASB%2FDocument_C%2FDocumentPage). Previously, the FDIC and other banking regulators gave their approval to this more straight-forward approach to CECL when they hosted a [CECL webinar](https://www.bank-trends.com/CECL/FAQ/) in July 2018. But now that the FASB has also given the WARM method their OK, any would-be skeptics of this methodology can rest assured that a less complex solution to CECL exists for community banks and credit unions. While there are many overly-complicated (and overly-expensive) tools available for CECL in the marketplace, the [**Plansmith solution**](https://www4.plansmith.com/cecl/) was designed specifically for banks and credit unions looking for a simplified approach. Our model leverages Call Report data for loan balances and loss history, and then allows for user-defined inputs to customize the calculation based on the characteristics of your loan portfolios. We also provide a charge off forecasting model, peer data, and other resources to give you exactly what you need to calculate and document the allowance under CECL. You can also run parallel calculations to compare your current ALLL with the projected CECL reserve. In fact, many clients are calling [**this**](https://www4.plansmith.com/cecl/)the “easy button” for CECL! While your CECL implementation date is likely still a ways off, regulators are encouraging banks to get started now and fight the temptation to kick the CECL “can” down the road any longer. In fact, some regulators will expect bankers in 2019 to have an idea of what the impact of CECL will be to their institution’s balance sheet. At Plansmith, we are encouraging our clients to be proactive when it comes to deciding which methodology makes the most sense and not take the “wait and see” or “hope it goes away” approach to CECL. If your organization has been putting CECL off because it seemed too overwhelming, [**schedule a discovery call**](https://www4.plansmith.com/contact-us/) to learn how Plansmith can help you take CECL off the 2019 to-do list. This guest blog is a special feature authored by Michael Stinson, *CEO of Spotlight Financial* and Reid Ten Kley, CPA, *President of Spotlight Financial*.   Topics: [CECL](https://blog.plansmith.com/topic/cecl) ### Subscribe Now! ### Posts by Tag - [community bank planning (52)](https://blog.plansmith.com/topic/community-bank-planning) - [community bank strategy (52)](https://blog.plansmith.com/topic/community-bank-strategy) - [community bank (49)](https://blog.plansmith.com/topic/community-bank) - [community bank budget software (45)](https://blog.plansmith.com/topic/community-bank-budget-software) - [credit union planning (44)](https://blog.plansmith.com/topic/credit-union-planning) - [community bank budgeting (42)](https://blog.plansmith.com/topic/community-bank-budgeting) - [budgeting (39)](https://blog.plansmith.com/topic/budgeting) - [interest rate risk (35)](https://blog.plansmith.com/topic/interest-rate-risk) - [community bank interest rate risk (33)](https://blog.plansmith.com/topic/community-bank-interest-rate-risk) - 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