Stratman Solutions - Built by bankers for bankers

Katie Spain, General Manager,Stratman Solutions

Stratman Solutions offers a suite of software solutions for financial institutions across the country. We’re a team of bankers at Northwest Bank & Trust who build technology for banks.

Our journey into software began nearly two decades ago when we created our first product – Bank Sweep Manager. We built it to administer and manage our compliant, on-balance sheet sweeps, but our entrepreneurial spirit quickly made us realize it could benefit other community banks just like ours.

That is when we started to provide unmatched software and service, and only deliver solutions we rely on ourselves. Now Bank Sweep Manager is just one of our products along with several other software solutions, which have been trusted to ensure accuracy, increase efficiency and provide peace of mind that every detail is taken care of.

Plus, we continue to develop new products as well as continually improve existing offerings to maximize our customers’ profitability and compliance. With decades of industry experience, we’ve found success by crafting solutions from first-hand experience, operating with integrity, and bringing a people-first service approach that is often left behind in the software industry.

Some of our current software solutions include:

• Bank Sweep Manager delivers peace of mind with an overnight, on balance sheet, sweep program that is easy to explain, delivers proven performance and is fully compliant.

• Stratman Sweep Manager is made for credit unions to administer and manage fully-compliant, in-house sweeps in just minutes each day.

• Collateralized Deposit Manager quickly deploys and manages the collateralization of municipal deposits and supports the on-balance sheet growth of high-value public deposits.

• Asset Quality Manager (AQM) enables you to process forward-looking forecasts (ALLL & CECL), set early warning systems and generate troubled asset action plans without the distractions and expenses associated with do-it-yourself Excel models and high-priced, under-utilized alternative solutions.

CECL Preparation

One very timely element that speaks to the need for AQM is CECL (Current Expected Credit Loss), which asks you to assess the potential losses on financial assets such as loans and more. As a major accounting change, the new CECL standard doesn’t have to be something you stress about.

AQM has the ability to run multiple models simultaneously to provide insight to management on whether each model is properly estimating based on the perceived risks within each portfolio pool. The models include:

 Vintage Model identifies and creates vintages for each loan in your portfolio and ties losses back to year of origination.

 Snapshot Model looks at a particular point in time and follows the charge off history over the life of the pool.

 Weighted Average Remaining Maturity (Warm+) Model estimates loan balances and applies loss rates to the forecast with adjustments specific to your institution’s portfolios.

 Loss Rate Model computes losses based on the charge offs experienced each year relative to the amount of originations in that period.

One of the key parts to selecting the right model and therefore producing the intended outcomes is understanding the loans you’ve pooled together. For example, what type of loan are you looking at? Is it for a home or HELOC or perhaps for a vehicle, RV, motorcycle or boat? Have you properly pooled together the loans and considered the qualitative factors?

You could use one model for one loan pool and then select another model for a different pool of loans. Even if you choose one model to estimate your losses on various loan pools, you should understand how that model works and what is being calculated. The bottom line is that the selected model should be reflective of the pool you are calculating.

Rather than burdening your team with data collection and excessive customization, you can consider what available and relevant data you have and then build a tailored list of inputs that are specific to your institution. An integrated solution such as AQM allows you and your management team to quickly understand how this impacts the current estimate for the allowance for loan losses while saving input and calculation integrity time. This means your team can utilize time savings from solutions such as AQM to ensure the accuracy of the qualitative and other factors. It also means you can spend more time ensuring your inputs are correct, so you’re generating the correct outputs.

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