Stress Testing

Ardmore Banking Advisors offers comprehensive tools to help you implement the following types of stress testing: 
stress testingRegulators and the banking industry as a whole consider stress testing to be a key exercise for all financial institutions. It provides bank management with important guidance about potential risk exposure within their lending portfolio.

Whether your bank is looking to grow organically or through outside investment or acquisition, being able to clearly demonstrate your potential risk is an important ability in today’s challenging banking environment.

Ardmore's approach to stress testing is simple, straight forward and credit-based. We meet or exceed all regulatory expectations for community banks and our solutions have been presented to the FFIEC, OCC, Fed and FDIC.  
 
The Regulatory Imperative

As stated in the 
OCC’s Guidance on Stress testing in Community Banks, the agency considers some form of stress testing a requirement of all banks to demonstrate capital health and credit quality.  In addition, in the Summer issue of its Supervisory Guidance publication, the FDIC recommends portfolio stress testing as a best practice – particularly relating to concentration management.
  • “The OCC expects every bank, regardless of size or risk profile, to have an effective internal process to assess its capital adequacy… [and] does consider some form of stress testing .… to be a key part of sound risk management for community banks.” 
  • FDIC: “Simple, straightforward stress tests can provide useful insight into concentrated credit portfolios held by community banks.”
The message from regulators is clear:  All banks – even community banks - need to have demonstrated the capability to perform credit or portfolio-level stress tests.

Since 2007, we have been refining our approach, process and user-friendly tools to assist bankers in meeting or exceeding all regulatory expectations for stress testing. Our depth of knowledge of credit best practices, stress testing models and bank concentration data and coding ensures that our solutions will meet your needs and regulators' requirements. We were the first to market with stress testing assistance for banks of all sizes, and our clients tell us that our approach is simple, credit-based, affordable, and most importantly, the results are not criticized by regulators.