Does anyone know where I can get documentation on Allowance for Loan Losses account valuation put out by the examiners? Our external examiner is telling us when need a more justification for the balance in ALLL.

Is this what you are looking for:

FIL 63-2001

In addition to the Interagency Statement referenced above, refer also to your regulator's examination handbook and procedures. I don't believe the OCC or the FDIC have incorporated the Interagency Statement into their manuals, but the Fed has. In addition to the guidance, I would also look at your regulator's exam procedures for an indication of what they will be looking at.

thanks for your help

In our exam this year, the examiners were really looking out how we justify the ALLL. We do it using two different methods. One based on historical loss rates and the other is based on the present value of the cash flow in the loan. By using the two different methods and the valuation between the two was very close, the examiners couldn't challege the ALLL.