SOURCE: FIMAC Solutions

May 14, 2008 08:30 ET

FIMAC Offers "Window to the Future" to Bank CFOs and Loan Officers

FIMAC's Commercial Real Estate Stress Test Helps Bankers See the Red Flags Before CRE Loans Become Losses

DENVER, CO--(Marketwire - May 14, 2008) - While the nation's largest banks continue to reel from the sub-prime mortgage collapse, banks coast to coast have another witches' brew in the making. Since 2000, the joint regulating agencies have been looking at the levels of underlying risk associated with banks' commercial real estate loan portfolios. In a report released April 14, credit rating agency A.M. Best reiterated that "commercial real estate risk is the leading contributing factor to overall credit risk for mid-size and small banks."

"Right now too many community bankers are having too hard a time coming to grips with the problems that have emerged in their commercial real estate portfolios," Comptroller of the Currency John C. Dugan said in a speech last month.

Veteran former banker Gregory W. Doner, Chairman and CEO of FIMAC Solutions LLC, believes commercial real estate loan failures could be the next big pothole in the road for the U.S. economy. Doner's company has developed a technology-based 'magic wand' that the company believes could help banks, savings & loans and other lenders avoid disaster on the commercial real estate side.

In June, FIMAC will release its widely anticipated Commercial Real Estate Stress Test model, a proprietary state-of-the-art software product that lets loan officers analyze how a commercial real estate project will perform under changing market conditions. The FIMAC stress test helps bankers become more proactive in recognizing if or when a loan could have trouble repaying.

"For the first time lenders have a scientific way to identify problem loans in advance of the problem," said Doner. "Stressing a bank's loan portfolio, loan-by-loan and in aggregate, by simulating changes in real world economic factors, allows lenders to identify the breaking points -- in advance."

Loan officers can push the envelope for a loan by subjecting a CRE project to changes in interest rates, capitalization rates, vacancy rates and rental rates. The program, called CRE Stress Analytics, will stress Net Operating Income (NOI), Capitalization Rate, Estimated Collateral Value, Debt Service Coverage (DSC) Ratio and Loan to Value (LTV) Ratio under any combination of economic and market scenarios.

"FIMAC's CRE Stress Analytics empowers any banker to run a simulation on a single CRE loan or on hundreds of loans simultaneously to see how his or her loan portfolio will perform in different scenarios that simulate changing market conditions during the life of the loans," said Doner. "If you are a chief loan officer or a bank CFO, this is like having a window to the future."

Based in Denver, Colorado FIMAC Solutions, LLC, specializes in providing the financial services industry with banking software focusing on risk management and profitability solutions. The Company's flagship product, Risk Analytics® ALM Model, is well recognized throughout the industry with approximately 350 placements. Further information is available at www.fimacsolutions.com.

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