Beyond Loan Modifications and PPP: What Lenders Should be Doing with Vulnerable Borrowers

During our recent COVID-19 stress testing webinar, I discussed how one of the primary goals of stress testing is to rank your loans based on their capital at risk as measured by the stress test.  Community banks can then use these lists to focus their precious credit resources (people and time) to do a deep dive on those loans and start to prepare workout strategies. The earlier you start this planning process, the more options you will have to help the borrower and limit loan losses.

Many community banks have been laser-focused on working with borrowers to provide modifications on existing loans and PPP loans. So now what?

Plante Moran, a highly reputable accounting firm with deep expertise in financial services, has provided an excellent roadmap in Brave New World: Credit Quality During COVID-19. I strongly recommend that bankers read this article to learn more about what actions they should be taking with individual borrowers, which in addition to stress testing, include getting updated financial statements, tax returns, and collateral data.

More recent posts

Invictus CEO to Moderate Regulatory Panel at

banking, Capital Plan for Community Banks, Community Banks Capital Plan, capital planning, liquidity, stress testing, Trade War Recession, Capital Requirements for community banks, community bank regulations, Global Oil Shock, Stagflation, Banking CRE, Banking Construction, Concentration Limits, CRE Banking Strategies

Invictus CEO to Moderate Regulatory Panel at "Concentrate 2026"

Author: Patti Casaleggio, Invictus Analytics

As regulatory scrutiny and expectations around commercial real estate (CRE) continue to evolve, staying ahead of supervisory trends has never been more critical for community and...
Preparing for the Possibility of a Global Oil Shock and Stagflation Scenario

banking, Capital Plan for Community Banks, Community Banks Capital Plan, capital planning, liquidity, stress testing, Trade War Recession, Capital Requirements for community banks, community bank regulations, Global Oil Shock, Stagflation

Preparing for the Possibility of a Global Oil Shock and Stagflation Scenario

Author: Adam Mustafa CEO, Invictus Analytics

What happens when inflation reaccelerates from already elevated levels while economic growth slows?

This is the defining challenge behind Invictus Analytics’ latest Oil Price Shock...
Evaluating the CBLR at 8%: Should Your Bank Adopt it?

banking, Capital Plan for Community Banks, Community Banks Capital Plan, capital planning, liquidity, stress testing, Trade War Recession, Capital Requirements for community banks, community bank regulations, cblr

Evaluating the CBLR at 8%: Should Your Bank Adopt it?

Author: Adam Mustafa, CEO, Invictus Analytics

Federal banking agencies recently finalized a rule lowering the Community Bank Leverage Ratio (CBLR) threshold from 9% to 8%, effective July 1, 2026. At first glance, the change...