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Stress Test

CEIS Review has been an important part of Enterprise Bank’s commercial lending review function since 2010 when the Bank made the decision to move its third party review services from the firm that we’d used since the Bank’s inception in 1989 to CEIS Review after a thorough search of area firms providing such services. From the very beginning, Enterprise has been impressed with the experience and professionalism of all of the people at CEIS that we’ve come in contact with. Reviews here are conducted on a timely basis twice a year by review staff that offers large or regional bank commercial lending or loan review experience. The level of staff expertise has proven to be helpful on many occasions as Enterprise Bank continues to grow its portfolio and moves into other types of loans. As an example, Enterprise recently booked its first highly leveraged loan transaction. CEIS provided appropriate feedback and copies of recent regulatory guidance on such transactions to be sure that this new type of loan is being properly underwritten and monitored. We consider CEIS Review to be a valued partner in the Bank’s growth and in monitoring that portfolio credit quality is maintained.

Bank Contact,
Credit Director & Senior Vice President

“Top Down” Capital Adequacy Assessment

The “Top Down” whole approach to portfolio stress testing is sometimes the appropriate starting point in determining if further analysis is needed.  To illustrate this, a quote from an OCC’s Supervisory Guidance Release entitled “Community Bank Stress Testing” released 10/18/12:

“For most community banks, a simple stressed loss-rate analysis based on call report categories may provide an acceptable foundation to determine if additional analysis is necessary.”

As with CEIS’ other services, our detailed and transparent analysis is the foundation of the engagement. With portfolio stress testing, we will segment the portfolio into pools with similar loss characteristics, develop “stressed” loss rates for each segment, calculate stress period loss amounts (minimum 2 year timeframe), estimate the earnings impact, and apply the earnings impact to Tier 1 Capital with both pre- and post-stress capital ratios. 

Contact Us today to learn more about out “Top Down” stress testing program.