Pacific Commerce Bank has implemented Banker’s Toolbox’s Commercial Real Estate Loan Stress Test (Crest) software to proactively stress test and monitor its Commercial Real Estate (CRE) portfolio. The bank has cited Crest’s testing criteria, including vacancy, capitalization rate, and interest rate as the key factor behind its selection. Banker’s Toolbox claimed that Crest’s stress tests are designed to provide information and projections for community and regional banks’ CRE portfolios, regardless of the existing concentrations.
Daniel Cho, chief executive officer at Banker’s Toolbox, said: “Today’s financial market is as unpredictable as ever, and it is important for banks to prepare for all potential negative shocks through accurate portfolio risk assessment. Crest enables banks of all sizes to proactively address problem areas within their loan bases. The solution offers community and regional financial institutions a cost-effective tool to manage accounts and better prepare for regulatory scrutiny of CRE holdings.”
Cliff Nielsen, vice president and chief technology officer at Pacific Commerce Bank, said: “As commercial holdings face higher rates of foreclosure and depressed property values become more prevalent, it is important to accurately evaluate our holdings so we can make more informed lending decisions and manage risk exposure. Crest gives us the ability to run multiple stress tests that analyze both collateral types and specific geographic areas, ultimately defining potentially problematic loan niches.”
Los Angeles-based Pacific Commerce Bank provides a customised approach to the banking needs of small businesses and professionals.
California-based Banker’s Toolbox offers risk management solutions through commercial real estate portfolio analysis and stress testing, as well as money laundering and fraud detection.
