A privately held community bank, $1.5 billion, with a strong presence in mid-sized communities, looking to expand into new geographic areas and enhance their Financial and Risk Management processes with leading technology and reporting systems.
The bank needed to implement a new Financial and Risk technology infrastructure that could support the strategic direction and provide timely and accurate visibility to risk, operations and financial performance. There was no adequate connectivity in place that could bridge their core system, 3rd party data and manual spreadsheets in order to provide both financial and risk to strategic performance reporting and analytics.
Three implementations were chosen from our Finance. Risk. Unified. (FRU) framework: financial management, enterprise risk management and enhanced credit risk management.
Sola Analytics began with the implementation of a comprehensive budgeting and financial reporting system that incorporates branch, board, and external reporting, complete with allocations and consolidating entries. This also included loan and deposit reporting, as well as forecasting and strategic planning.
OnPoint then implemented a robust Enterprise Risk Management (ERM) Foundation Program that is strategically aligned to support achievement of the bank’s objectives. The program included defining the Risk Appetite, Top Risks and Key Risk Indicators with metrics covering all areas within the bank. These programs are deployed within the same technology as the Financial management system.
The bank then implemented an enhance credit risk management scorecard program which delivers credit risk assessments that rate both the borrower and collateral, and quantifies expected loss, allowing the bank to adjust pricing proactively, while gaining visibility to credit exposures well in advance of an actual loss event. This program was then leveraged to create alignment and visibility for loan portfolio management, the provision for loan losses, and loan production strategies.
With the implementation of the FRU platform, the bank now has current and accurate data to measure their performance against their five-year plan, with a continuous view of financial outcomes alongside their risk profile. And with increased visibility to the real-time impact of their risk-adjusted decisions, the management team now has the freedom to be much more proactive and strategic toward their growth initiatives.
A privately held regional community bank which doubled its size after a merger growing to $7 billion had expanded its footprint from a smaller rural concentration, to more high-growth midsized community market areas.
An OnPoint existing client requested additional support given their increased size and expansion of their business strategies, more complexity and regulatory expectations for management of risk. Specifically, the bank was seeking greater visibility from both a financial and a risk perspective with particular focus on enhancing the financial, enterprise, compliance, internal audit and credit risk management programs.
The acquisition raised the bar for financial, risk, regulatory reporting and monitoring expectations. Management’s strategy required the support of more advanced systems and programs that would provide integrated views of financial and risk data. Given the complexity and breadth of the combined entities, the bank financial and risk strategies required an integrated and strategic enhancement. Visibility of key financial, risk, budgeting and performance metrics, as well as loan and deposit performance metrics were needed. Further, a consolidated view of the financial and risk data was critical to ensure the bank would make the most effective strategic and forward-looking operational decisions possible.
The bank selected a unified platform for all financial and key risk information streams – financial, credit, operational and capital.
Sola Analytics implementation of comprehensive budgeting and financial reporting enabled through an integrated technology platform, and OnPoint’s implementation of enhanced ERM, Internal Audit, Compliance and Credit risk management programs provide the client with highly automated platform leveraging the bank’s risk and financial data into a unified view to ensure strategic visibility and success.
- A consolidated risk tool set that includes credit risk stress testing and an enterprise wide stress testing based on prospective economic scenarios
- The ability to simulate prospective economic scenarios and see the potential impact on capital and financial performance while gaining visibility to the organization’s risk profile
- Visibility to the potential impact on charge-offs and the provision for loan losses while identifying higher risk profile segments of the loan portfolio
With the implementation of a unified platform that overlays financial data with risk visibility, the bank now has the right information in real-time to make risk-based decisions to their credit portfolio, financial forecasts, and overall strategic objectives. The management team at all levels can also see the real-time impact of their decisions from a financial and risk perspective to take full advantage of opportunities across their newly acquired and diverse market segments.
Publicly traded regional bank serving rapidly growing metropolitan area in the south and southwest regions of the U.S. The bank’s expansion strategy included the integration of previously failed community banks.
Having been formed through the acquisition of previously failed banks that had multiple credit strategies and cultures, there was a need for a holistic comprehensive credit risk management program which would enable the expected growth strategies while continuous providing full visibility to the entire credit portfolio. Management wanted to ensure consistency and accuracy of credit ratings while implementing aggressive regionally specific credit growth strategies. Visibility was crucial to make adjustments to these growth strategies based on potential environmental economic fluctuations. The bank’s strategy was to grow to $10 billion in 5 years.
OnPoint focused on an enhanced Credit Risk Management program implementation which included:
- Development and implementation of comprehensive Dual Credit Risk Rating program based in Expected Loss measurement
- Implementation of an enhanced Allowance for Credit Losses methodology based in Expected Loss
- Credit Risk Stress Testing program based in Expected Loss
With the implementation of OnPoint’s three legs of its comprehensive Enhanced Credit Risk Management (ECRM) program, the Bank has successfully reached their goal of over $10B, with a framework that provides visibility and consistent ratings across the entire credit portfolio. A stabilized credit portfolio enabled acquisition of other banks in growth regions even under high scrutiny and approval from the regulators due to their aggressive growth.
A privately held community bank, $2.5 billion had recently converted from a credit union to a national bank charter. Their strategic plan included key initiatives for advanced commercial lending and serving rapidly growing metropolitan area with strong community ties.
With the transition from a credit union to a commercial bank, there was a compelling need for the organization to change their focus from controls-based risk management processes to strategic risk management program to support the plans for growth. The bank’s strategic plan included significant expansion in products as well as growing their commercial lending into new high-growth industries. The bank needed a comprehensive risk management program that could bring the three lines of defense together under a scalable enterprise framework which would enable the organization to grow with clear visibility to the risks involved.
OnPoint engagement began with our proprietary risk management program maturity assessment (INREVAS) process which provided the Bank’s leadership team with an objective view of the maturity and current state of risk management processes across the enterprise. This assessment allowed for the development of a comprehensive roadmap of risk management process improvement opportunities that would increase stakeholder value.
OnPoint then focused on an enhanced Enterprise Risk Management program implementation which included:
- Development and implementation of comprehensive 3 Lines of Defense ERM program
- Selection and Implementation of an eGRC system to support the ERM program
- Internal Audit & Compliance integration within ERM program
The Bank has since gone public and through strategic acquisition of other banks, is now at the $7 billion mark with one of the best efficiency and returns ratios within their peer group.
With the implementation of OnPoint’s ERM program, the Bank has a framework that provides visibility and consistent risk ratings across all risk categories. The eGRC system provides the comprehensive reporting of risk enabling the Bank to align their risk appetite with their unique growth opportunities and strategic objectives.
A publicly traded regional super-community bank with $12 billion in assets has experienced significant growth through acquisition and expansion into the Southeast U.S.
Having focused on the production side for growth, the bank faced regulatory pressure to enhance their risk management strategy, governance and visibility to their expanded environments. The Bank’s existing risk structure and reporting confirmed that risk measurements were area-specific, and aggregated risk decisions were fragmented, complex and inconsistent. The risk management group was not including the first line of defense process owners to provide their risk environment view. The bank needed an enterprise risk management program to ensure that all risks are included, and that the assessment process was executed reliably and continuously. The Bank had previously invested in risk technology but was unable to leverage it to provide a clear view of their risk environment to matter where the activities occurred.
OnPoint conducted an initial assessment of the environment and then developed an Enterprise Risk Management Program Strategic Plan, and the resulting delivery included:
- A focused Enterprise Risk Management Program aligned to the 3 Lines of Defense
- A comprehensive enterprise-wide first line of defense risk and control self-assessment which produced the organization’s first ever enterprise view risk reporting
- A review and integration to the eGRC system to include all 3 Lines of Defense
- Support for regulatory orientation of the risk program implementation
With the implementation of OnPoint’s Enterprise Risk Management Program, the Bank-wide view of the risk environment enabled the bank to satisfy the regulatory concerns necessary to enable the bank to continue its expansion strategies. The ERM governance and reporting framework ensured that front-line Process Owners’ assessment (1st line of defense) was established and that the Risk group could provide the executive and board with true risk visibility across their expanding markets.
Privately owned 40-year-old regional community bank with $2 billion in assets. This Bank has dominated its local market presence, providing local banking to their communities.
After facing a significant amount of credit losses and impacts to capital, the Bank shifted senior management leadership and successfully focused on cleaning up its significant credit problem assets. Wanting to chart a new culture to grow through acquisitions and organic growth, the Bank was seeking assistance on how to improve their Credit Risk Management while maintaining their local community banking culture and avoid repeating the errors that caused the losses.
OnPoint initially focused on Credit Risk Management, delivering a Dual Credit Risk Rating program, Enhanced Allowance of Credit Losses, and Credit Risk Stress-testing. OnPoint then provided enhancement of Risk Management overall, which included:
- Development and implementation of comprehensive ERM
- Internal Audit program
- Compliance program
- Operational Risk Management Framework
- Mortgage Banking Risk Management program
With the implementation of OnPoint’s 3 lines of Defense, the Bank now has a framework that allows front-line Process Owners, Independent Risk Management and Independent Risk Assessment to provide visibility on all necessary financial risk categories. The insight and control provided by these programs has transformed their risk culture and now provides risk insight on a continuous basis, empowering risk-adjusted targeted growth and profitability.
A publicly traded bank holding company with $8 billion in assets operating three entities: a regional bank, a national mortgage company and a local investments firm.
The holding company’s entities all operated independently. Facing unique strategic plans and risk environments, each needed Enhanced Risk Management programs that could integrate and translate effectively to the enterprise. Each had specific growth opportunities, timelines, and financial objective, regulatory oversight needs and business cultures. In addition, because of significant regulatory constraints, they were unable to move forward with their plans for growth. There was a clear need for an enterprise-wide visibility to risk, and alignment of risk appetite.
OnPoint developed a program enhancement plan providing a road map and guide for the implementation of Enterprise Risk Management across all entities aligned to the three lines of defense framework. The engagement included the following:
- Review and implementation of the eGRC System
- Focused delivery of integrated Technology Governance and Risk Management
- A comprehensive Credit Risk Management program with a Dual Credit Risk Rating program and a Credit Stress-testing program
- Integration of Enterprise Compliance Risk Management including eGRC integration
- Comprehensive internal audit program including eGRC integration
As a result of these Risk Management enhancements, the organization had received the necessary go-ahead from regulators to grow — both organically, and through acquisition – to $13 billion in assets while enhancing risk-adjusted returns within each entity. They are now able to see, review and discuss risk profiles and return tradeoffs between business activities, entities and strategies.
Privately owned emerging regional bank with significant rural market presence as well as emerging presence in a high growth urban marker.
After experiencing the impacts of the 2008 Financial Crisis, the Bank, then at $2B in assets, needed a better way to assess and monitor their credit risks in this new environment of high competition and global economic stresses. The Bank is focused on maintaining their localized community focused business model which drives their highly profitable results. Thus, the Bank recognized that their growth objectives and planned market segment expansion strategies require greater visibility to their risk exposure.
OnPoint engagement began with our unique INREVAS process which provided the Bank’s leadership team with a risk adjusted assessment of their current state of risk management processes across the enterprise along with a roadmap of risk management process improvement opportunities that would increase stakeholder value. A series of projects followed, that focus on both credit risk management enhancements as well as ERM implementation:
- Dual Credit Risk Rating
- Allowance for Credit Losses
- Enterprise Risk Management Program Complete (governance, process level risk & control ratings from the front line)
- Internal Audit Program integrated to ERM
- Compliance Program integrated to ERM
Our Client, now closing in on $7B in assets, is well poised to better anticipate changes in a fluctuating marketplace. They have already managed similar hurdles that have caused stresses under their previous risk programs. They have reported that they are now able to focus extra resources and energy toward growth and expansion.