Community Bank Credit Stress Testing

A forward-looking approach to credit risk management and capital planning for community banks.

DCG has developed a best-in-class community bank credit stress-testing solution. We have confirmed the soundness of our approach during our in-depth work helping larger banks. In effect DCG has brought big-bank analytics to the community banking arena in a very pragmatic and cost-effective manner.

Our team of quantitative and strategic risk management experts has developed a stand-alone credit stress-test service that will allow your key stakeholders to confidently assess the potential impact of adverse and severely adverse economic conditions (as defined by the Federal Reserve’s annual stress-test factors) on your institution’s loan losses and capital.

This forward-looking risk assessment provides immediate feedback regarding capital adequacy under stressful credit environments and provides insight regarding whether additional capital planning might be prudent. In addition to being understandable and practical, our documentation is thorough and designed to exceed growing regulatory expectations for community bank stress testing.

DCG’s cost-effective credit stress-testing solution will provide your institution with the following:

  • A clear and concise executive summary that highlights results and key implications for capital ratios.
  • Individual loan portfolio analysis that includes detailed bank-specific, regional and national peer group expected loss projections for baseline, adverse and severely adverse economic scenarios.
  • Attribution analysis that indicates the relative impact various economic factors have on each portfolio’s loss estimates.
  • “Examiner-friendly” documentation that will provide all of your key stakeholders with a clear explanation of the analyses, statistical methods employed and key assumptions.

In addition, we facilitate an executive- and Board-level presentation to ensure all of the analyses, results and strategic implications are fully understood.