Ardmore Banking Advisors Analyzes FDIC's Directive on Community Bank Stress Testing

The banking professionals of Ardmore Banking Advisors have analyzed the FDIC’s recent article on stress testing in community banks, and deemed it a valuable asset to community banks involved in the stress testing process. Furthermore, they also find that the article reaffirms Ardmore Banking Advisors’ “Low Stress Stress Testing” approach for community banks.

The article, published in the Summer 2012 issue of the FDIC newsletter, Supervisory Insights, is the first publication from any of the primary bank regulators directed specifically to community banks below $10 billion in assets, and is intended to clarify regulatory expectations around stress testing.

According to the article, stress testing is an industry best practice, and expected in some way by regulators for all community banks that want to survive and grow. Commercial real estate (CRE) is the most important portfolio for community banks to stress test, and for growing banks who wish to display better risk control, the process can be expanded to other portfolios.

“The article makes clear that while stress testing is not a regulatory requirement for banks with assets below $10 billion, it is a simple to manage, but valuable, credit risk control within the reach of banks of all sizes,” said Peter L. Cherpack, Senior Vice President & Senior Director of Credit Risk Technology at Ardmore Banking Advisors. “This is a regular area of concern for community banks, and this article will be very helpful to those banks to meet new requirements.”

For over 20 years, Ardmore Banking Advisors has been providing clients with processes, methodologies and solutions built by bankers for the financial services industry. Offering a wide variety of services including loan review, credit and risk management, and credit technology software, ABA helps bankers solve problems, understand and manage their business more efficiently and improve overall performance.