It pays to be on guard.

Regulators are taking a hard stance on credit risk – get ready. At Farin, we understand that it can be difficult to identify and manage hidden risk in your portfolio. Your Farin Credit Risk Specialist will help you find and manage unnecessary risks and our risk software will help you monitor high concentration areas, and perform ALLL calculations, stress testing and dual loan grading to reduce your exposure, meet regulatory expectations and anticipate attacks, then successfully parry risposte.

Protect with FastGradeTM Our comprehensive credit risk solution.

Credit Analysis & Loan Grading

Details

ALLL Methodology & Calculations

Details

Loan Portfolio
Stress Testing

Details

Developing Credit Risk Management skills – Not for the faint of heart.

Institutions face three types of financial risk – interest rate, credit, and liquidity. While these risks are inherently different, they are interrelated. Managing credit risk is the key to effective Asset/Liability and Enterprise Risk Management. Improperly measured and managed credit losses can negatively impact your financial performance and capital levels.

Our Credit Risk Specialists will help you implement a pro-active, comprehensive approach that ties loan risk scoring models, allowance methodology and loan portfolio stress testing techniques together to improve your credit risk oversight.

Smart move – Combination, Farin Advisory Services and FastGrade.

Do not underestimate the complexity of managing credit risk, you need a team of experts on your side just to keep up. There are many aspects to the process of credit risk management and the regulatory landscape for credit is constantly changing. It’s harder than ever to maintain the expertise or understanding required to adequately mitigate the risk in your loan portfolio and allocate the appropriate reserves with adequate documentation.

FastGrade is appropriate for any size institution.

FastGrade was built to improve efficiency and administrative performance for all institutions and their lending operations – small, large and in between. These efficiency yield cost savings while reducing the “single-source dependency” issues that many institutions face today.

FastGrade saves your loan officers time and effort.

FastGrade uses condensed financial statements and data upload capabilities that actually increase the efficiency and productivity of your loan officers. If your institution already uses a statement spreading software, FastGrade allows you to upload from exported files which reduces the need to input data multiple times. Consider your position regarding the following issues and then give us a call to discuss developing strategies to mitigate your current and future credit risks.

  • Do you regularly swap interest rate risk for credit risk? FastGrade can help you make informed, calculated decisions on risk swaps.
  • Are you using a consistent and objective loan risk scoring model across your organization?
  • Do you have any hidden concentrations in your loan portfolio? Do you know?
  • Do you know how fast or how many loans are changing in grade?
  • Does your financial institution perform a loan portfolio stress test at least annually and in accordance with the most recent regulatory guidance?
  • Will your MIS (Management Information systems) support the data required to incorporate the proposed CECL (Current Expected Credit Loss) model for calculating your ALLL reserve?
  • Do you have the data necessary to inform loan pricing decisions from past experience and concentrations?
  • Do you leverage your current business plan in forecasting impacts of potential losses and reserve balances in stressed environments and the impact on your capital?

To learn more about the specific features and benefits of our Credit Analysis, Loan Grading, ALLL Methodology and Calculations, and Stress Testing services, click on the tabs at the top of the page or contact Paul Mumford at 877-933-5172 or pmumford@farin.com

30+ Standard Reports & Custom reports available.

FastGrade has over 30 standard reports available, as well as custom reports available upon request. Our system will allow you to analyze and report on all aspects of your portfolio. You will always have access to the information you need, allowing your team to make accurate and timely decisions.

  • Watch List Reporting
  • Board Reporting
  • Exception Reporting
  • Reserve Reports
  • Compliance Reports
  • Concentration Reports
  • Core Bank Integration

setup Details.

Quick and Easy Data Uploading.

FastGrade uploads loan portfolio data directly out of your core banking system. Core system uploads can be performed as often as you like. You can also import data from a text delimited or Excel format. If your statement spreading software exports data, it can be uploaded to FastGrade.

Complete Access and Fast Set Up.

FastGrade is delivered as a subscription service. Your bank can get access to the system in just a few days. Setup includes mapping existing core data, training, and migrating financial statement data for existing borrowers. Total setup time depends on the individual bank; however, setup is usually complete within 2 to 4 weeks of contractual agreement.

Security.

Security is a top priority at Farin, among our primary security features are:

  • Dedicated servers with Managed Hosting.
  • Type SOC 16 Certified Compliant Hosting
  • Daily backups of data.

In addition, Farin FastGrade data security measures work to protect against risk of data corruption and network intrusion. Such components include:

  • Continually updated computer anti-virus protection to guard against viruses or worms entering the FastGrade solution
  • Firewalls to prohibit access breaches by individuals or networks
  • Secure transmissions to ensure information remains confidential. Encryption technology such as Secure Socket Layer (SSL) protects data transmission between FastGrade and our customers

Upgrades.

FastGrade releases new functionality every 60 to 90 days. All new functionalities are built as modules, giving you the choice to upgrade or not. Prior to a new module release, your Credit Risk Specialist will review all the new features with you and your team. Need help using FastGrade? Contact the FastGrade help desk at 877-933-5172 or submit a written request directly from the FastGrade application.

FastGrade – analyze risks, grade and price loans for success.

FastGrade and your Farin Credit Risk Specialist will help you reduce your institution’s individual credit and portfolio risk with consistent loan grading, increase your overall efficiency with credit analysis and integrate it into Farin LoanEDGE, our loan pricing solution, to increase profitability and reduce losses.

Determine the health of every loan and borrower.

FastGrade reports provide a regulatory compliant dual loan grade, which makes determining the health of every loan in your portfolio more accurate. The loan grades provided meet regulatory credit classification, therefore grades and financial information will also automate ALLL calculations. This will allow your institution to standardize loan review and ALLL reserve processes and reporting.

“FastGrade’s innovative dual loan grading system is flexible. Loan officers can adjust final loan grades as needed to make deals that fit your institution’s risk profile. It provides an objective grade based on financial performance and a subjective grade based on credit-quality adjustments unique to each customer. FastGrade is the key to loan grading that passes regulatory scrutiny, yet allows loan officers make deals and retain profitable customers.”

Rob Newberry
Farin SVP, Client Management Specialist, Credit Risk Expert

your choice of grading scales.

FastGrade allows you to choose the loan grading scale that matches your current system. FastGrade supports a 6-point through 10-point scale. If necessary, we will help you create a custom risk score model.

Robust credit analysis gives you valuable insight to make better decisions.

FastGrade allows you to:

  • Compare borrower ratios with over 30 RMA (Risk Management Association) ratios or custom ratios your institution uses today
  • Compare industry-specific financial statements for thorough analysis of each borrower and overall loan portfolio analysis
  • Spot trends and more accurately forecast using statement spreading and loan migration

Credit Migration Analysis.

Using FastGrade’s Loan Analytics, we will provide your management team a quarterly review of overall portfolio credit positions and a look at the trends and changes in credit quality. The review documents your loans by class or category as improved, impaired, or unchanged. Using your data, we will help you project potential losses and impact on ALLL.

Migration analysis tracks changes in borrower scores from their initial grade to their current grade, helping you identify potential losses. This aggregated data shows changes in impairment and improvement over time.

FastGrade Loan Analytics show portfolio wide, as well as loan-specific, information, which provides your loan officers with critical data for underwriting and risk mitigation. This data can be imported into LoanEDGE, our risk-based pricing solution, to assist in making more profitable and secure loan pricing decisions.

Quick List features and benefits.

  • Dual Loan Grading / Risk Scoring
  • Financial Statement Spreading
  • RMA Ratio Analysis
  • Loan Impairment
  • Historical Trend Tracking
  • Loan Presentation Package
  • Global Cash Flow
  • Loan Portfolio Management
  • CRM
  • Peer Analytics Using UBPR Data
Credit_Risk_flow_03

In addition, the comprehensive FastGrade customer data management and workflow capabilities provide a unique ability to gather, track and document all information regarding your customer loans, which will help keep you informed and your loan portfolio up-to-date.

The farin integrated approach …Credit Risk, Loan & Deposit Pricing.

At Farin, we realize that loan and deposit pricing is not the same at every institution – credit risks and funding needs vary. Loan offerings, terms and product types are dictated by strategy, which impacts credit risk. This is why we advocate for integrated software solutions.

There is no reliable “one-size fits-all” solution to address credit risk, as well as deposit and loan pricing. Farin’s integrated approach, uses FastGrade, iPrice and LoanEDGE (our deposit and loan pricing solutions) which allows these functions to be addressed simulatenously by solutions designed specifically for each function, while factoring in necessary data from each complimentary solution.

consistent loan pricing made easy.

Easy web-based access to FastGrade, iPrice and LoanEDGE makes it simple and convenient for your loan officers to maintain consistent pricing and track offers; and for management to coordinate performance review reporting.

Your Farin advisor will provide guidance to help align your models inputs and assumptions with your institution’s overall strategy, risk profile, and profitability, which will help build confidence in the models’ results.

Group training sessions and reviews.

Farin provides group training sessions and reviews on FastGrade, LoanEDGE and iPrice focused on data, strategy, profitability and building pricing and credit risk strategies to align with overall institution goals for growth and earnings. On-going review of your strategy, implementation, key metric performance and overall market trends with your Farin advisors will help ensure your performance stays on track and assumptions are tracked against actual performance to fine tune and continuously improve your pricing process.

FastGrade makes it simple to Meet ALLL expectations…

Meeting ALLL expectations, understanding how CECL may impact your institution, and maintaining current ALLL data is stress-free when you work with Farin and use FastGrade. You provide updated credit grades at your desired intervals. We apply the newly calculated loss rates to current your portfolios, then provide you immediate feedback on your potential risks. Really, it’s that simple.

Your Farin Credit Risk Specialist will also help your devise a plan to maximize how your institution benefits from the information provided by ALLL calculations.

The FastGrade ALLL model allows you to group loans by pools, then subdivides each pool into risk scores or grades. Each loan can be tracked over time to show how the grade level has changed due to borrower changes, collateral concerns, or market conditions. Using this data, FastGrade derives a loss rate by grade and then uses that rate to project future losses on current balance sheet exposures.

“Farin and FastGrade are ready for CECL. We completely understand the ins and outs of CECL and have incorporated the proposed CECL requirements into FastGrade model. We will translate your results and help you understand the impact that the proposed CECL model may have on your current reserve balance and we can determine if your current systems are able to capture ALL the data required to calculate your reserve using the CECL model.”

Paul Mumford
Farin Senior Client Solution Specialist

As CECL changes become a reality, institution’s will be required to include the “loss of the projected earnings anticipated” from a loan in their projections. This change makes the common “top down” approach more costly, as assumptions would be applied to entire portfolios that have credit risk and remaining terms that impact the overall expected return.

FastGrade is ahead of the curve, it allows institutions to forecast the present value of future losses, gathering the additional data needed and trending that data over time to provide documentation that regulators will require in the near future to justify these forecasts.

FastGrade ALLL Features & Benefits.

  • Automated ALLL Calculations
  • Quarterly Preparation of Allowance Reserves based on your current methodology and CECL method
  • Provide Examiners with supporting documentation for Qualitative Factors
  • Prepare Comparative Peer Analysis on Reserves and Loan Quality
  • Forecast your ALLL Reserve Balance Requirements for the next rolling 8 quarters

fastgrade finds dangers lurking in your loan portfolio.

Stress testing is a hot topic. The Dodd Frank act requires large financial institutions to complete stress tests and the OCC now requires stress testing for community banks under 10 billion. Stress testing has become an integral part of overall risk management activities and is becoming a dominant element of regulatory exams. Stress testing and scenario analysis are integral to understanding how your loan portfolio may perform during extreme conditions and how hidden credit risks lurking in products thought to be good risk hedges may impact your bottom line.

FastGrade gives your institution the flexibility to run unlimited “What-If” scenarios allowing you to better project how the quality of your portfolio would perform under chosen conditions. This analysis and testing is essential for making informed decisions and is required by regulators.

stress testing methodology.

New guidance suggests that institutions calculate and document loss rates for a two-year stressed scenario. These losses are then carried forward onto the income statement and the balance sheet where capital ratios are tested. The guidance requires a minimum of three scenarios; base line, adverse, and severely adverse scenarios.

There are multiple process methods for stress testing. The most common method is “bottom up,” which looks at stressing individual loan level data and then rolling these results back up to the portfolio level. Another method, “top down,” sets stress variables globally and drills these changes down into the loan detail to test impacts at the aggregate portfolio level. A third method is “reverse stress,” which quantifies how big a loss it would take to throw capital ratios below the regulatory minimums.

FastGrade offers Individual file & Portfolio-wide stress testing.

A good stress testing process leverages the risk scoring models in use to see the actual impact of each of the stress scenarios created. Fast Grade allows for portfolio level sensitivity analysis coupled with individual credit file sensitivity analysis gives your lending team the power to ensure that your institution can weather local or national economic down turns. Your Farin Credit Risk Specialist will help you effectively manage the credit risk in your entire loan portfolio, by developing stress testing processes that tie directly into your enterprise risk management framework.

  • Individual Customer Analysis

    • Business Category Analysis
    • Business Type Analysis
  • Economic Analysis

    • At risk or declining industries
    • Decreases in revenues/commodity price fluctuation
    • Increases in general and administrative expenses
    • Interest rate changes
    • Geographic risk to underlying collateral

Your Farin Credit Risk Specialist will help you make informed decisions about your credit policy and implement changes that will decrease risk, increase profitability and ensure consistency.

With FastGrade’s integrated database, loan grading and ALLL modules, your institution can reduce the effort to perform stress testing and ALLL while improving your overall risk management capabilities.

stress Testing Features & Benefits.

  • Regulatory Guidance Compliant Stress Testing Methods
  • Unlimited, Multi-factor “What-If” Scenario Analysis
  • Stress Testing Design, Implementation, Review and Back Testing
  • Top Down Approach for Scenario Analysis
  • Reverse Portfolio Stress Testing
  • Unlimited “What-If” Analysis on Capital and Income
  • Overall Loan Portfolio Quality Analysis

stress Test Process flow.

+ Main

Developing Credit Risk Management skills – Not for the faint of heart.

Institutions face three types of financial risk – interest rate, credit, and liquidity. While these risks are inherently different, they are interrelated. Managing credit risk is the key to effective Asset/Liability and Enterprise Risk Management. Improperly measured and managed credit losses can negatively impact your financial performance and capital levels.

Our Credit Risk Specialists will help you implement a pro-active, comprehensive approach that ties loan risk scoring models, allowance methodology and loan portfolio stress testing techniques together to improve your credit risk oversight.

Smart move – Combination, Farin Advisory Services and FastGrade.

Do not underestimate the complexity of managing credit risk, you need a team of experts on your side just to keep up. There are many aspects to the process of credit risk management and the regulatory landscape for credit is constantly changing. It’s harder than ever to maintain the expertise or understanding required to adequately mitigate the risk in your loan portfolio and allocate the appropriate reserves with adequate documentation.

FastGrade is appropriate for any size institution.

FastGrade was built to improve efficiency and administrative performance for all institutions and their lending operations – small, large and in between. These efficiency yield cost savings while reducing the “single-source dependency” issues that many institutions face today.

FastGrade saves your loan officers time and effort.

FastGrade uses condensed financial statements and data upload capabilities that actually increase the efficiency and productivity of your loan officers. If your institution already uses a statement spreading software, FastGrade allows you to upload from exported files which reduces the need to input data multiple times. Consider your position regarding the following issues and then give us a call to discuss developing strategies to mitigate your current and future credit risks.

  • Do you regularly swap interest rate risk for credit risk? FastGrade can help you make informed, calculated decisions on risk swaps.
  • Are you using a consistent and objective loan risk scoring model across your organization?
  • Do you have any hidden concentrations in your loan portfolio? Do you know?
  • Do you know how fast or how many loans are changing in grade?
  • Does your financial institution perform a loan portfolio stress test at least annually and in accordance with the most recent regulatory guidance?
  • Will your MIS (Management Information systems) support the data required to incorporate the proposed CECL (Current Expected Credit Loss) model for calculating your ALLL reserve?
  • Do you have the data necessary to inform loan pricing decisions from past experience and concentrations?
  • Do you leverage your current business plan in forecasting impacts of potential losses and reserve balances in stressed environments and the impact on your capital?

To learn more about the specific features and benefits of our Credit Analysis, Loan Grading, ALLL Methodology and Calculations, and Stress Testing services, click on the tabs at the top of the page or contact Paul Mumford at 877-933-5172 or pmumford@farin.com

30+ Standard Reports & Custom reports available.

FastGrade has over 30 standard reports available, as well as custom reports available upon request. Our system will allow you to analyze and report on all aspects of your portfolio. You will always have access to the information you need, allowing your team to make accurate and timely decisions.

  • Watch List Reporting
  • Board Reporting
  • Exception Reporting
  • Reserve Reports
  • Compliance Reports
  • Concentration Reports
  • Core Bank Integration

setup Details.

Quick and Easy Data Uploading.

FastGrade uploads loan portfolio data directly out of your core banking system. Core system uploads can be performed as often as you like. You can also import data from a text delimited or Excel format. If your statement spreading software exports data, it can be uploaded to FastGrade.

Complete Access and Fast Set Up.

FastGrade is delivered as a subscription service. Your bank can get access to the system in just a few days. Setup includes mapping existing core data, training, and migrating financial statement data for existing borrowers. Total setup time depends on the individual bank; however, setup is usually complete within 2 to 4 weeks of contractual agreement.

Security.

Security is a top priority at Farin, among our primary security features are:

  • Dedicated servers with Managed Hosting.
  • Type SOC 16 Certified Compliant Hosting
  • Daily backups of data.

In addition, Farin FastGrade data security measures work to protect against risk of data corruption and network intrusion. Such components include:

  • Continually updated computer anti-virus protection to guard against viruses or worms entering the FastGrade solution
  • Firewalls to prohibit access breaches by individuals or networks
  • Secure transmissions to ensure information remains confidential. Encryption technology such as Secure Socket Layer (SSL) protects data transmission between FastGrade and our customers

Upgrades.

FastGrade releases new functionality every 60 to 90 days. All new functionalities are built as modules, giving you the choice to upgrade or not. Prior to a new module release, your Credit Risk Specialist will review all the new features with you and your team. Need help using FastGrade? Contact the FastGrade help desk at 877-933-5172 or submit a written request directly from the FastGrade application.

+ Credit Analysis

FastGrade – analyze risks, grade and price loans for success.

FastGrade and your Farin Credit Risk Specialist will help you reduce your institution’s individual credit and portfolio risk with consistent loan grading, increase your overall efficiency with credit analysis and integrate it into Farin LoanEDGE, our loan pricing solution, to increase profitability and reduce losses.

Determine the health of every loan and borrower.

FastGrade reports provide a regulatory compliant dual loan grade, which makes determining the health of every loan in your portfolio more accurate. The loan grades provided meet regulatory credit classification, therefore grades and financial information will also automate ALLL calculations. This will allow your institution to standardize loan review and ALLL reserve processes and reporting.

“FastGrade’s innovative dual loan grading system is flexible. Loan officers can adjust final loan grades as needed to make deals that fit your institution’s risk profile. It provides an objective grade based on financial performance and a subjective grade based on credit-quality adjustments unique to each customer. FastGrade is the key to loan grading that passes regulatory scrutiny, yet allows loan officers make deals and retain profitable customers.”

Rob Newberry
Farin SVP, Client Management Specialist, Credit Risk Expert

your choice of grading scales.

FastGrade allows you to choose the loan grading scale that matches your current system. FastGrade supports a 6-point through 10-point scale. If necessary, we will help you create a custom risk score model.

Robust credit analysis gives you valuable insight to make better decisions.

FastGrade allows you to:

  • Compare borrower ratios with over 30 RMA (Risk Management Association) ratios or custom ratios your institution uses today
  • Compare industry-specific financial statements for thorough analysis of each borrower and overall loan portfolio analysis
  • Spot trends and more accurately forecast using statement spreading and loan migration

Credit Migration Analysis.

Using FastGrade’s Loan Analytics, we will provide your management team a quarterly review of overall portfolio credit positions and a look at the trends and changes in credit quality. The review documents your loans by class or category as improved, impaired, or unchanged. Using your data, we will help you project potential losses and impact on ALLL.

Migration analysis tracks changes in borrower scores from their initial grade to their current grade, helping you identify potential losses. This aggregated data shows changes in impairment and improvement over time.

FastGrade Loan Analytics show portfolio wide, as well as loan-specific, information, which provides your loan officers with critical data for underwriting and risk mitigation. This data can be imported into LoanEDGE, our risk-based pricing solution, to assist in making more profitable and secure loan pricing decisions.

Quick List features and benefits.

  • Dual Loan Grading / Risk Scoring
  • Financial Statement Spreading
  • RMA Ratio Analysis
  • Loan Impairment
  • Historical Trend Tracking
  • Loan Presentation Package
  • Global Cash Flow
  • Loan Portfolio Management
  • CRM
  • Peer Analytics Using UBPR Data
Credit_Risk_flow_03

In addition, the comprehensive FastGrade customer data management and workflow capabilities provide a unique ability to gather, track and document all information regarding your customer loans, which will help keep you informed and your loan portfolio up-to-date.

The farin integrated approach …Credit Risk, Loan & Deposit Pricing.

At Farin, we realize that loan and deposit pricing is not the same at every institution – credit risks and funding needs vary. Loan offerings, terms and product types are dictated by strategy, which impacts credit risk. This is why we advocate for integrated software solutions.

There is no reliable “one-size fits-all” solution to address credit risk, as well as deposit and loan pricing. Farin’s integrated approach, uses FastGrade, iPrice and LoanEDGE (our deposit and loan pricing solutions) which allows these functions to be addressed simulatenously by solutions designed specifically for each function, while factoring in necessary data from each complimentary solution.

consistent loan pricing made easy.

Easy web-based access to FastGrade, iPrice and LoanEDGE makes it simple and convenient for your loan officers to maintain consistent pricing and track offers; and for management to coordinate performance review reporting.

Your Farin advisor will provide guidance to help align your models inputs and assumptions with your institution’s overall strategy, risk profile, and profitability, which will help build confidence in the models’ results.

Group training sessions and reviews.

Farin provides group training sessions and reviews on FastGrade, LoanEDGE and iPrice focused on data, strategy, profitability and building pricing and credit risk strategies to align with overall institution goals for growth and earnings. On-going review of your strategy, implementation, key metric performance and overall market trends with your Farin advisors will help ensure your performance stays on track and assumptions are tracked against actual performance to fine tune and continuously improve your pricing process.

+ ALLL

FastGrade makes it simple to Meet ALLL expectations…

Meeting ALLL expectations, understanding how CECL may impact your institution, and maintaining current ALLL data is stress-free when you work with Farin and use FastGrade. You provide updated credit grades at your desired intervals. We apply the newly calculated loss rates to current your portfolios, then provide you immediate feedback on your potential risks. Really, it’s that simple.

Your Farin Credit Risk Specialist will also help your devise a plan to maximize how your institution benefits from the information provided by ALLL calculations.

The FastGrade ALLL model allows you to group loans by pools, then subdivides each pool into risk scores or grades. Each loan can be tracked over time to show how the grade level has changed due to borrower changes, collateral concerns, or market conditions. Using this data, FastGrade derives a loss rate by grade and then uses that rate to project future losses on current balance sheet exposures.

“Farin and FastGrade are ready for CECL. We completely understand the ins and outs of CECL and have incorporated the proposed CECL requirements into FastGrade model. We will translate your results and help you understand the impact that the proposed CECL model may have on your current reserve balance and we can determine if your current systems are able to capture ALL the data required to calculate your reserve using the CECL model.”

Paul Mumford
Farin Senior Client Solution Specialist

As CECL changes become a reality, institution’s will be required to include the “loss of the projected earnings anticipated” from a loan in their projections. This change makes the common “top down” approach more costly, as assumptions would be applied to entire portfolios that have credit risk and remaining terms that impact the overall expected return.

FastGrade is ahead of the curve, it allows institutions to forecast the present value of future losses, gathering the additional data needed and trending that data over time to provide documentation that regulators will require in the near future to justify these forecasts.

FastGrade ALLL Features & Benefits.

  • Automated ALLL Calculations
  • Quarterly Preparation of Allowance Reserves based on your current methodology and CECL method
  • Provide Examiners with supporting documentation for Qualitative Factors
  • Prepare Comparative Peer Analysis on Reserves and Loan Quality
  • Forecast your ALLL Reserve Balance Requirements for the next rolling 8 quarters
+ Loan Portfolio

fastgrade finds dangers lurking in your loan portfolio.

Stress testing is a hot topic. The Dodd Frank act requires large financial institutions to complete stress tests and the OCC now requires stress testing for community banks under 10 billion. Stress testing has become an integral part of overall risk management activities and is becoming a dominant element of regulatory exams. Stress testing and scenario analysis are integral to understanding how your loan portfolio may perform during extreme conditions and how hidden credit risks lurking in products thought to be good risk hedges may impact your bottom line.

FastGrade gives your institution the flexibility to run unlimited “What-If” scenarios allowing you to better project how the quality of your portfolio would perform under chosen conditions. This analysis and testing is essential for making informed decisions and is required by regulators.

stress testing methodology.

New guidance suggests that institutions calculate and document loss rates for a two-year stressed scenario. These losses are then carried forward onto the income statement and the balance sheet where capital ratios are tested. The guidance requires a minimum of three scenarios; base line, adverse, and severely adverse scenarios.

There are multiple process methods for stress testing. The most common method is “bottom up,” which looks at stressing individual loan level data and then rolling these results back up to the portfolio level. Another method, “top down,” sets stress variables globally and drills these changes down into the loan detail to test impacts at the aggregate portfolio level. A third method is “reverse stress,” which quantifies how big a loss it would take to throw capital ratios below the regulatory minimums.

FastGrade offers Individual file & Portfolio-wide stress testing.

A good stress testing process leverages the risk scoring models in use to see the actual impact of each of the stress scenarios created. Fast Grade allows for portfolio level sensitivity analysis coupled with individual credit file sensitivity analysis gives your lending team the power to ensure that your institution can weather local or national economic down turns. Your Farin Credit Risk Specialist will help you effectively manage the credit risk in your entire loan portfolio, by developing stress testing processes that tie directly into your enterprise risk management framework.

  • Individual Customer Analysis

    • Business Category Analysis
    • Business Type Analysis
  • Economic Analysis

    • At risk or declining industries
    • Decreases in revenues/commodity price fluctuation
    • Increases in general and administrative expenses
    • Interest rate changes
    • Geographic risk to underlying collateral

Your Farin Credit Risk Specialist will help you make informed decisions about your credit policy and implement changes that will decrease risk, increase profitability and ensure consistency.

With FastGrade’s integrated database, loan grading and ALLL modules, your institution can reduce the effort to perform stress testing and ALLL while improving your overall risk management capabilities.

stress Testing Features & Benefits.

  • Regulatory Guidance Compliant Stress Testing Methods
  • Unlimited, Multi-factor “What-If” Scenario Analysis
  • Stress Testing Design, Implementation, Review and Back Testing
  • Top Down Approach for Scenario Analysis
  • Reverse Portfolio Stress Testing
  • Unlimited “What-If” Analysis on Capital and Income
  • Overall Loan Portfolio Quality Analysis

stress Test Process flow.

Farin Credit Risk Management

Our Credit Risk Management video is not finished, but once it is, it will live here and need a couple lines of copy to promote and explain it — for both income-at-risk and value-at-risk metrics.

Understanding risk Management

Read Rob Newberry’s article

Breakthrough strategies – How to Measure and Reserve for Credit Risk

CPE Webinar – October 17 Register now, get CPE credit

“When working with clients and potential clients I enjoy helping them become more efficient and finding solutions that meet their needs.  My greatest satisfaction comes from hearing clients tell me thank you for helping us.”

Paul Mumford

Farin Senior Client Solution Specialist
FastGrade
877-933-5172
pmumford@farin.com

Fastgrade migration analysis

Rob Newberry
Farin SVP, Client Management Specialist
rnewberry@farin.com
608-661-4251

“We’ll design a flexible risk management strategy to meet your needs. We help you implement a custom-designed early warning system for your emerging credit concerns, which will allow your ALCO to take action early to avoid costly mistakes and minimize losses.”

More about Rob

Fastgrade migration analysis

Rob Newberry
Farin SVP, Client Management Specialist
rnewberry@farin.com
608-661-4251

“We’ll design a flexible risk management strategy to meet your needs. We help you implement a custom-designed early warning system for your emerging credit concerns, which will allow your ALCO to take action early to avoid costly mistakes and minimize losses.”

More about Rob

Rob Newberry
Farin SVP, Client Management Specialist
rnewberry@farin.com
608-661-4251

“Keeping up with requirements is difficult. We’ll help you run OCC/Dodd-Frank compliant stress tests including baseline, adverse, and severely adverse scenarios to not only satisfy examiners but to identify hidden risks that actually may effect the profitability of your institution”

More about Rob

Review Our Comprehensive Suite of Services and solutions.

For over 30 years, we’ve specialized in providing advice, education and software solutions focused on five interdependent, core business facets common to institutions. We help financial professionals make informed decisions, anticipate and avoid issues, maintain compliance and thrive in any economic environment.