Loan Valuation

Today's credit risk environment makes it critical for banks to accurately manage credit quality and forecast and minimize loan losses. The Evolv Suite's integrated Valuation and Cash Flow solutions enable you to bridge the gap between your credit and finance groups, to estimate cash flows and model risk in the portfolio. The Evolv Suite's capabilities support estimation processes including ALLL, FAS 5, and FAS 114.

Cash Flow Estimation

Through the built-in cash flow portal, there is complete flexibility to estimate cash flows, based on a variety of different business processes that your credit team may be using to estimate cash flows, including:

Model-based estimation — the Evolv Suite can model loan-level probability of default and loss given default (PD-LGD), based on loan–level attributes such as risk rating, MSA, or LTV, or even macroeconomic assumptions. The Evolv Suite then derives cash flow estimates based on the PD-LGD data or other modeling approach. This model-based approach is commonly used to generate loss curves and cash flow estimates for consumer loans.
Specific Review — Banks typically use a more "hands-on" approach to estimate cash flows and impairments for Commercial loans, through a periodic cash flow estimation process (i.e., quarterly estimation process). The Evolv Suite enables your credit officers to estimate cash flows for individual loans on a periodic basis, and include supporting documentation such as appraisals, to justify credit estimates. This data is stored in the Evolv Suite's centralized repository, for consolidation into portfolio level estimates of cash flows, impairment / losses, and reserve requirements.
Import Cash Flow data — if you already have a process to generate loan-level cash flows, these cash flows can be imported into the Evolv Suite, to support Reserve and Impairment analysis, and for integration into the Evolv Suite Loan Accounting solutions.

Once your cash flow data is imported into Evolv, there is complete flexibility in how the system enables management and analysis of the data. Evolv supports:

Pool-level cash flows to model credit data at an aggregated level, but with the ability to allocate the cash flow data to the loan level for use in Loan accounting for loan level impairment analysis
Integrated Analysis and Reporting across Loan Accounting and Cash flow data through Evolv’s InSight module, to provide an integrated view of portfolio performance across both credit and finance
Scenario analysis, by enabling multiple cash flow estimation runs, to model different potential scenarios based on expected economic conditions
Acquisition Valuation support, to model cash flows for your bid process due diligence, Day 1 Valuation, and to provide transparency through post-close by supporting Day 2 Cash Flow Estimation processes

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