Illustrative example
ALLOWANCE · BY SCENARIO
AdverseBaseUpside
Budget scenarios
Growth, mix, rate, and economic assumptions modeled side by side.
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ARC-CECLYour allowance, built from your loansARC-ALMRate risk from the same loansARCAnalyticsYour reconciled data, ready to queryARC-CECLReviewYour model, reviewed every yearARCPeerAnalyticsPeer context that reflects your strategyNext Gen
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BUDGET SIMULATION
Plan for more than one future.
ARCSys Budget Simulation links your ALM and CECL assumptions directly into forward-looking budget scenarios, determining the expected provision and allowance balances based on forecasted budgeted conditions, so planning and risk speak the same language.
Your budget scenarios use the same pools, prepayment, and loss assumptions as your allowance, so the provision in the budget and the provision in the model are the same number.
Our specialists work inside your loan-level data, not a summary of it.
SCENARIOS · BUDGET · BASE · ADVERSEPROVISION · FORECAST
ALLOWANCE · PROJECTEDASSUMPTIONS · SHARED WITH CECL
Trusted by 250+ banks and credit unions since 2010
A budget built in a spreadsheet disconnected from your risk models will disagree with your allowance the first quarter it meets reality.
Every scenario, from the same pools as your allowance
Base, adverse, and upside all run through the pools, prepayment, and loss assumptions already documented for CECL and ALM, so no scenario rests on a methodology your model doesn't use.
Illustrative example
ALLOWANCE BUILD · BY QUARTER
BaseAdverse
Provision forecasting
Expected provision expense under each scenario, by period.
Illustrative example
ALLOWANCE · BASE · THIS QUARTER
Opening allowance$14.74M
Build · base scenario+$412K
Closing allowance$15.16M
Coverage1.15% → 1.18%
Allowance projection
Projected allowance balances that reconcile to the CECL methodology.
Illustrative example
SHARED WITH YOUR ALLOWANCE
Pools · same as the allowance✓
Prepayment · measured per loan✓
Loss rates · by pool✓
Rate path · from ALM✓
Shared assumptions
The same prepayment, loss, and rate assumptions used for CECL and ALM.
Illustrative example
BUILD · BY DRIVER · +$412K
Indirect auto+$268K
Office CRE+$121K
Economic forecast+$23K
BASE · THIS QUARTER · 38,410 LOANS
Segment-level detail
Provision and allowance projected by the same pools used in the allowance.
Illustrative example
BUDGET PACKET READY
01 Scenario summary
02 Provision by quarter
03 Allowance by scenario
04 Shared assumptions
05 Variance to actuals
Board-ready output
Budget packets that show the risk assumptions behind the numbers.
PLANNING AND RISK. ONE LANGUAGE.
From budget assumptions to projected allowance.
The simulation starts from the assumptions already documented for CECL and ALM, so the budget inherits the methodology instead of inventing one.
01
SET THE SCENARIOS
Growth, mix, rate, and economic paths for the budget horizon.
02
INHERIT THE ASSUMPTIONS
Loss, prepayment, and rate assumptions pulled from the CECL and ALM models.
03
SIMULATE
Provision and allowance projected by period and segment.
04
PRESENT
A budget packet with the risk assumptions attached.
01
COMPARE TO ACTUALS
Projected provision against the allowance as it closes each quarter.
02
EXPLAIN THE VARIANCE
Differences traced to the assumption or segment behind them.
03
RE-FORECAST
Scenarios updated as the environment moves.
04
REPORT
Management and the board see planning and risk on one basis.
[WHY IT MATTERS]
Budgets grounded in real risk data.
Stop budgeting in a spreadsheet disconnected from your risk models. Simulate outcomes with the same data driving your allowance and ALM.
▸ Request a scope callWHO IT IS FOR
Built for every seat
at the table
[OPERATING USER]
Finance and FP&A teams
Provision and allowance projections that reconcile to the methodology instead of a separate spreadsheet.
[CFO]
Planning and risk on one basis
Budget conversations that use the same assumptions as the allowance and ALCO.
[BOARD]
A budget with the risk assumptions attached
The provision in the plan and the provision in the model are the same number.
Go deeper on Budget Simulation
▸ All learning resourcesTalk through budget simulation with an ARCSys specialist
Bring next year's growth plan and last year's provision surprise.