SALT LAKE CITY-With delinquencies and charge-offs becoming an increasingly important issue in recent years due to the weight of bad loans on balance sheets, Deseret First Credit Union has improved its loan analysis.

The CU worked with Visible Equity, LLC, an analytics and technology company also based here. Michael Warner, Deseret First's AVP of real estate lending, said Visible Equity's Silverback Portfolio Analytics service provides the CU with the ability to see how variable economic conditions such as property value or borrower credit score can affect its members' ability to repay their loans.

"We needed to discuss as a management group, and, be able to show to our examiner upon request, that we had an understanding of the changing characteristics within our loan portfolios," he explained. "Also, that we could identify which loans were most likely to go bad and that we had implemented strategies for protecting the credit union from additional loan loss."

Warner said Silverback Portfolio Analytics met all of these needs in a system that is "very credit union friendly." Other highlights, he added, include the fact the company does not charge per user or per report. The pricing is "fairly based" on a combination of asset size and membership.

"Visible Equity does not add additional expense if we load new data weekly, monthly or quarterly," he said. "The analytics run on the entirety of our loan portfolios each night and combines our most current data with all the changing trends that are statistically relevant for our analysis. We then get all of this in a Web-based solution that allows any of us to access it from our computers or produce it in PDF, Excel or Print Screen formats.

"I can't imagine any credit union, tasked with what we been tasked with by the regulators, not wanting to know about this," Warner added.

Visible Equity, which says it does not disclose individual clients' performance data, told Credit Union Journal that the typical client's annual savings are $5,300 in hard cost savings and $6,480 in man-hour savings, resulting in an average ROI of 64%. It also noted its Silverback Loan Portfolio Analytics values all collateralized assets, meaning clients do not need to purchase AVMs from other sources of data for valuations.

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