With several financial institutions failing during the most recent crisis and credit quality concerns once again rising, the regulators have been reemphasizing the importance of a sound capital management process and proactive contingency capital planning. Be prepared for a more comprehensive discussion about your current and future capital position in the event asset quality deterioration accelerates.
An annual review of the Capital Plan and/or Policy will be a perfect opportunity to assess and update the stress testing tools supported by bank-specific historical losses, forecasts, pro-formas, and assumptions, and incorporate any new strategic directions into the models.
We have been proactive in developing and integrating contingency capital plans for our clients. This includes stress testing growth assumptions, credit assumptions, and sources and uses of capital, such as dividends. Constructive feedback from various regulatory agencies has allowed us to fine-tune the capital management process to ensure consistency with most recent guidance and adaptability to current market conditions.
Capital Services Include:
- Operational Kick-Off meeting (Prioritizing the Engagement)
- Capital Policy Review and/or Development
- Contingency Capital Plan Development
- Initial Capital Stress Test Development (Assumptions
- Customized Capital Stress Testing (Growth and/or Credit)
- Loan Sector Concentration and Loss Severity Analysis
- Periodic Conference Calls for Position Assessment and Strategies
- Opportunity for Call-In with Examiners During a Regulatory Exam
If you are interested in learning more about our Capital Management services please send us an email or call us at 502-412-2524.