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Bank of North Carolina's Credit Analysis Tool Will Pave the Way for Risk Dashboard

Central platform for analyzing and approving loans will lead to risk management dashboard for stress testing, identifying loan concentrations.

As Bank of North Carolina, a $2.2 billion-assets bank based in Thomasville, N.C., has grown through acquisition and the types of loans it makes have become more complex, it has outgrown the credit risk management software it formerly used to evaluate loans. "We needed a true financial statement spreading and analysis system," including full common balance sheet, income statement, ratios and cash flows, says Janet R. Helms, senior vice president, credit administration, who spoke to us in a phone interview. This will help the bank eliminate its multiple loan systems, assess the risk of large loans such as commercial real estate deals, gain greater efficiencies and establish uniform commercial lending practices across all of its 24 branches in North and South Carolina. Helms also wanted the system to generate and store associated credit memos. In addition, the bank plans to eventually use the software as a credit risk management dashboard (once all loan information is uploaded into the system).

The bank is still in the designing, training and beta-testing phase of the WebEquity software it purchased for this project and plans to roll it out in the first quarter of 2011. But the credit admin group will start using it next week for spreading and for credit presentation (such as the credit memo and approval information). Bank of North Carolina is also integrating the new software with its core system, Jack Henry's Silverlake. Helms hopes the new software's ability to automatically pull in loan and deposit data will ensure data quality and make it easier for credit approvers to find what they need.

"Before, some officers might give a summary of ten different relationships in a worksheet, others might do it narratively, and you always wonder, is that data from today or could it be older information?" she says. "In this system, the loan and deposit information will be updated nightly, so it will take less time for the loan officer to collect the information, and from an approval standpoint we know the information's current."

The new system will not affect loan decisions per se. But it will make life easier for regional managers who have to approve loans, all reports will be consistent. Lenders will keep all their data on borrowers in this one place.

In the future, Helms hopes to use WebEquity as a risk management dashboard, where managers can perform stress tests and spot concentrations in the loan portfolio. (First, all loan data needs to be entered into the system, which could take two to three years, she notes.) The bank is also building a new risk rating model in WebEquity.

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