Banker’s Toolbox, a provider of commercial real estate portfolio stress testing, money laundering and fraud detection, said that Paragon National Bank has implemented its commercial real estate loan stress test (Crest) software to proactively stress test and monitor its commercial real estate (CRE) portfolio.
Paragon National Bank said that it selected Crest because its rapid growth necessitated a more structured and automated process of analyzing its CRE portfolio. The system enables the bank to segment its commercial real estate holdings and apply stress factors to see how hypothetical changes could impact the health of the portfolio. Additionally, Crest’s speedy implementation enabled the bank to meet an internal deadline for having a new program in place without straining the budget.
Andy Taylor, senior credit officer at Paragon National Bank, said: “It is vital in this market to be able to quickly implement programs that will help us make our bank stronger. The time it took for us to go from a demo to full speed – including a fantastic training – exceeded our highest expectations.”
Paragon National Bank also cited the ease of using Crest’s reporting features as a key in the decision. The program’s analysis makes it simple for the bank to outline and report on the health of its loan concentration areas. Crest is also designed to provide more accurate stress test results with less data requirements, overcoming the ongoing data-gathering challenge faced by all banks.
Daniel Cho, chief executive officer at Banker’s Toolbox, said: “Community banks are very aware of the impact commercial real estate and the current market pressures can have on a bank’s health. Crest enables banks like Paragon National Bank to quickly evaluate and manage the potential risk in their CRE loan portfolio, which should help with regulatory exams and mitigate loan concentration risk in the future.”
