Challenge: A $4.8 billion Bank, the largest mutual-savings Bank in New York state required stress-testing services for this Bank, on both a transactional and portfolio level.
RWG Actions: RWG began its engagement with a $4.8 billion Bank, the largest mutual-savings Bank in New York state, in 2009. Initially, RWG provided portfolio stress-testing services for this Bank, on both a transactional and portfolio level, providing the Bank with relevant, independent data on the impact to earnings and capital in a “stress” scenario. The stress test identifies weaknesses in the viability of a property that debt service coverage alone does not, and provides a more accurate forecast of potential problem credit areas.
Results: Armed with this information, Bank Management is able to make better loan approval and pricing decisions, can initiate policy changes ahead of the curve, and can limit the future growth in concentrations that may adversely affect the performance of the overall loan portfolio. Since the initial engagement, our relationship with this Bank has expanded to include annual independent credit review services.