Union Center National Bank (UCNB) ($1.2 billion in assets) has implemented Banker's Toolbox's Crest, a commercial real estate loan stress testing software, as part of its ongoing efforts to build a commercial real estate (CRE) portfolio management program.
The software helps UCNB evaluate the stability of its entire CRE loan portfolio and mitigate the impact that a CRE market decline would have on the Bank.
Crest, which is compatible with any core processor, enables UCNB the ability to stress test their CRE loan portfolio to determine risk exposure, reveal strategies for creating a healthier loan portfolio and comply with federal regulations for CRE loan risk management.
Bank executives said Crest offered the best option to manage the Bank's CRE loan volume and provide the level of detail necessary to effectively reduce risk. Crest demonstrated the best capability to segment the CRE loan portfolio based on a variety of factors such as geography, property type and industry and creates customizable reports of the analysis.
"Our decision to purchase Crest was largely based on the flexibility it offers in its reporting, which is especially valuable with the fluid dynamics of commercial loan products," said John Leather, Jr., Portfolio Manager, Credit Administration, for UCNB. "Crest creates comprehensive reports that we can tailor according to certain elements of a portfolio, and the Bank's Board of Directors appreciates the reports that present the analytics in simple charts and graphs."
Crest provides automated stress testing to comply with the 2006 Interagency Guidance requiring portfolio-wide CRE stress testing and enables banks to identify potential loan hazards in advance. This solution is powered by patent-pending technology that provides more accurate stress test results with fewer data requirements than any other stress testing option available.
"The CRE loan market continues to be a very unpredictable market," said Daniel Cho, chief executive officer of Banker's Toolbox. "Crest gives banks like UCNB the tools needed to evaluate the strengths and weaknesses of their commercial real estate loan portfolios and make decisions based on the potential impact of future changes in the marketplace."