Credit Stress Testing for Optimal Risk Management

Overcome Credit Risk Challenges with Stress Testing FIT™

How has the current market impacted your capital?

PCBB’s Stress Testing FIT solution and expert advisors can quickly stress test your loan portfolio under various economic conditions. The comprehensive results can help your team understand key vulnerabilities and determine the potential impact on your earnings and capital.

Key Benefits:

  • Top-down and Bottom-up approaches
  • Quickly stress test your loan portfolio
  • Evaluate multiple scenarios and stress factors
  • Easily meet regulatory compliance
  • Receive pre-exam assistance

Two Approaches to Credit Stress Testing Your Loan Portfolio

Deluxe

Approach
Top-down — Portfolio Level approach
Up to 4 scenarios based upon different forecasts
User configurable forecast (GDP & Unemployment)
 
Loan Data
Industry segmentation
National and regional industry results
 
 
Reporting and Analysis
Multiple regression-based analysis
Transparent inputs and calculations
Robust reporting
Comprehensive graphics

Pro

Approach
Top-down & Bottom-up approach
Multiple scenarios (pre-stress, baseline and adverse)
Stress factors: DCR/DTI, LTV, NOI, Debt Service, Cap rates
 
Loan Data
Industry segmentation + custom groups
National and regional industry results
Your institution’s note level data
 
Reporting and Analysis
View concentrations: branch, officer, MSA, NAICS, etc.
Transparent inputs and calculations
Robust reporting
Comprehensive graphics
Advisory assistance included
PCBB customer testimonial

The process of stress testing portfolios can aid in strategic decision making, credit policy development, strengthen the quality of concentration risk management, support reserve methodology, and determine regulatory capital at risk.

OCC Supervisory Guidance, Community Bank Stress Testing

What Our Credit Stress Testing Tool Can Do For You

Stress Testing FIT calculates your losses under different economic environments with multiple configuration options and in the context of current reserves and forward earnings. Our experienced FIT Advisors will provide you with insights and guidance along the way.

  • Flexibly review your losses by asset class, from either a top-down or bottom-up perspective
  • Back-testing and projections included at no additional cost
  • Pro-forma impact on earnings and capital adequacy