08/26/25

Credit Stress Test Loans BEFORE You Book Them

When banks price loans, they stress the borrower’s ability to repay the loan under adverse credit conditions. For example, credit officers will underwrite to various interest rates, vacancy rates, revenue projections, EBITDA or NOI assumptions. However, most banks will not subject that same credit stress analysis to calculate that loan’s ROE. This is unfortunate because…

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09/09/21

Here is a Better Way To Stress Test Borrower Financials

Every community bank has a set of financial statement reports and ratio analyses to assess underwriting and credit risk.  The advent of credit spreading software such as CreditQuest has made this job very easy.   However, few banks take the extra step of modifying their reports and analysis based on the current economic cycle and market…

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