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Bank Stress Test | Credit, Liquidity and Interest Risk

Stress Testing FIT™

Banks have an important obligation to manage the risk in their loan portfolios for various economic conditions. Our Financial Insights & Technology Solutions offers banks Stress Testing FIT to analyze how your institution will cope with various financial market conditions, and the resulting impact on both earnings and capital.

Key Benefits:

  • Saves your bank time and money with a cost-effective outsourced solution
  • Provides you with a complete solution, stressing all loan sectors — not just CRE
  • Delivers important strategic actions for your bank’s risk management

PCBB's Credit Stress Analyzer

Stress Testing FIT is a robust, outsourced solution that quantifies the financial impact on earnings and capital that may arise under multiple stressed scenarios. This solution helps minimize the financial impact on your institution by:

  • Quantifying the impact of potential losses on your capital and ratios
  • Evaluating the risk associated with loan concentrations (type, sector, purpose, geography)
  • Allowing you to focus on results and conclusions rather than on the task of accumulating and analyzing historic data

Reports

  • Executive overview report facilitates your review with board, management and regulators
  • Pro-forma impact on earnings and capital adequacy
  • Quickly identify emerging trends
  • Reasonableness & usability of data and input evaluated
  • Back-testing vs. projections included
  • Grade migration included (single and/or dual grade)
  • Metric migration included (DCR/DTI, LTV, etc.)

Documentation

  • Detailed model narrative provided
  • Third-party validation completed
  • Key assumptions fully documented and disclosed

Support

  • Industry experts are available to facilitate review of your bank's results
  • Ongoing support is provided, including pre-exam “prep”

Conceptual Approaches

  • Multiple configurations are supported (migration and/or Probability of Default (PD)/Loss Given Default (LGD) derived from:
    • Market experience
    • Industry experience
    • Bank experience
  • Multiple shock environments and shock types evaluated:
    • Sensitivity shocks
    • Scenario-based shocks
    • Comparisons to historical results and benchmarks

How Do I Get Started?