Loan Portfolio Stress Testing

What is the Purpose of Loan Portfolio Stress Testing?

Bank Advisors has developed a model for Interest Rate Stress Testing that understands and reflects the reality of Community Banking and the realities of its portfolio. Loan Portfolio Stress Testing allows your financial institution to identify current and emerging risks and vulnerabilities within the loan portfolio by assessing multiple economic factors. The process ultimately educates your institution's management, board, and regulators on the potential effects of loan losses on capital.

Bank Advisors loan portfolio stress testing team

Identify Emerging Risks

Assess multiple economic factors to surface current and emerging vulnerabilities within your loan portfolio before they become material problems.

Educate Stakeholders

Equip management, the board of directors, and regulators with a clear picture of the potential effects of loan losses on your institution's capital.

Cost-Effective Solution

Loan Portfolio Stress Testing can be combined with our Loan Portfolio Review Services for a clear economic benefit when compared to the cost of accounting and audit firms.

Our Approach

In addition to the representative scope of your loan portfolio, Bank Advisors takes a collaborative approach to loan portfolio stress testing by working with management to identify credit concentrations within your portfolio that may present greater risk to your institution. Our granular approach heavily weights loan-by-loan stressing with real-life scenarios, accounting for declines in collateral value and debt service coverage to determine the impact on capital ratios, ALLL, and profitability.

Collaborative identification of credit concentrations with management
Granular loan-by-loan stressing with real-life economic scenarios
Accounts for declines in collateral value and debt service coverage
Determines impact on capital ratios, ALLL, and profitability
Provides confidence to Regulators and Boards of Directors
Accurately and fairly assesses portfolio weakness and capital adequacy

Our Value Proposition

Loan Portfolio Stress Testing can be combined with our Loan Portfolio Review Services for a clear economic benefit when compared to the cost of accounting and audit firms. Contact us today to find out more about how we can serve you.

Next Steps…

Bank Advisors would appreciate the opportunity to answer any question. We'd be happy to start with a quick call or email.