Ways to Leverage Portfolio Stress Testing Results

While megabanks have stringent and detailed portfolio stress testing requirements, many community banks and credit unions have received little prescriptive guidance on how to effectively stress test the loan portfolio. While stress testing is widely accepted and purported by examiners to be a critical component of a “sound risk management framework”, expectations and use cases for stress tests aren’t obvious.

Emphasizing the importance of stress testing in sound decision-making, the FDIC states that “during times when losses are minimal and property values are rising, stress-testing assessments of riskier assets and concentrated positions can help management anticipate potential risks arising from lower-than-expected obligor cash flows, deteriorating local or regional economic circumstances, or declining real estate values.”
Join this webinar to learn: 
  • The importance of leveraging portfolio stress testing results
  • Feedback from examinations that clients are permitted to share
  • How bottom-up and top-down stress testing results can influence capital adequacy, risk management, and lending decisions

Meet Your Presenter

Michelle Lucci, CRCM, CAMS, CSS

As a Senior Advisor for MST Advisory Services, Michelle Lucci, CRCM, CAMS, CSS, brings her clients more than 30 years’ experience in banking, regulation and third-party services. Michelle focuses on two areas within the company - the ALLL and CECL as well as loan portfolio stress testing. Prior to joining Abrigo, Michelle served numerous roles in financial services, including as a dual-commissioned FDIC bank examiner for both Risk Management and Consumer Compliance in the New York and Atlanta regions. She was also both a financial and regulatory analyst at Citigroup and a BSA, OFAC, and community reinvestment officer at CenterState Bank of Florida. As a senior advisor for Abrigo’s Advisory Services, Michelle guides our clients through the transition and implementation processes of CECL programs, loan portfolio stress testing solutions, and BAM+. Michelle earned her bachelor’s degree in business administration from Georgian Court University.

Full Bio

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