This model projects a de novo bank’s financials quarterly across the projection horizon. Every figure on every tab is engine-computed from the assumptions you set — nothing is hand-entered downstream. The sections below describe exactly how each number is derived, and, just as important, what the model deliberately does not do.

Rule update — CBLR requirement

Effective 2026-07-01 the statutory CBLR requirement is 8% (91 FR 22973). The 9% figure used in defaults is a client chartering commitment, not the rule.

1Balances, interest & the allowance

All figures are in thousands of dollars. Loan balances roll forward each quarter as beginning balance plus new originations, less runoff and charge-offs; deposit balances grow at the specified quarterly rate.

Interest income and expense accrue on average balances at one-quarter of the annual rate; floating-rate products reprice each quarter at their chosen reference index (SOFR, EFFR, or Prime) plus the product spread; a product with no index named defaults to SOFR. The three curves are generated from the FOMC SEP fed funds medians (YE26, YE27, YE28, longer run), interpolated piecewise-linearly into a twelve-quarter path, plus each index’s basis offset: EFFR at the fed funds level, SOFR at approximately +5 basis points, and Prime at +300 basis points by WSJ convention. The medians, the offsets, and any individual quarter are all editable and flagged when changed; there is no run-time fetch, so results are fully reproducible. Credit cards price off Prime by convention.

The allowance for loan losses is held at each amortized-cost product’s target reserve rate applied to the ending balance, and the provision equals the change in the allowance plus net charge-offs on amortized-cost loans.

2Originate-to-sell & servicing

Originate-to-sell activity is modeled per product: the specified share of each quarter’s originations is designated held for sale, warehoused on the balance sheet for the specified number of quarters (earning coupon interest for roughly half a quarter in the origination and sale quarters and full quarters in between, with no runoff or charge-offs assumed during the warehouse period), and sold at par plus the gain-on-sale margin.

Under amortized cost the gain is recognized in the quarter of sale; under the fair value option the warehouse is marked to expected sale price in the quarter of origination, which pulls the gain forward — the classic reason originate-to-sell lenders elect FVO. Held-for-sale balances appear as a separate loan line and carry no allowance.

When servicing is retained on sold loans, serviced principal accumulates in an off-balance-sheet servicing portfolio that runs off at the servicing decay rate; a mortgage servicing right is capitalized at the specified rate when loans settle (recognized as part of the gain on sale, creating a non-cash asset), amortized in proportion to portfolio runoff, and reported as a separate asset line. Servicing fees accrue on average serviced principal and are reported net of MSR amortization. The MSR is a simplified static-value model — no prepayment-driven revaluation outside the stress haircut.

3Capital & leverage

In the leverage ratio, mortgage servicing assets above 25% of Tier 1 (approximated as equity less intangibles) are deducted from both capital and assets per the threshold-deduction rule; below-threshold MSAs remain in capital.

The model assumes the bank adopts the Community Bank Leverage Ratio framework (leverage minimum defaults to the chartering commitment, editable) and flags CBLR eligibility limits (off-balance-sheet exposures above 25% of assets; $10B asset ceiling); risk-weighted assets and risk-based ratios are not computed.

Capital deductions not modeled: after-tax gains on sale arising from securitization exposures are deducted from CET1 under 12 CFR 3.22(a) — this model treats all loan sales as whole-loan sales, so if sales are structured as securitizations with retained exposure, capital is overstated by cumulative after-tax gains. Deferred tax assets are not booked by default, which mirrors the full regulatory deduction of NOL-carryforward DTAs (GAAP equity would be higher; regulatory capital would not be); when the deferred-tax path is elected, the NOL DTA is deducted from CET1 in full per 12 CFR 3.22(a), so regulatory capital is unaffected either way. Securities are not marked to market, consistent with the AOCI opt-out election. Investments in the capital of unconsolidated financial institutions, if modeled as custom products, are not threshold-deducted.

4Fair value option

Products elected to fair value are carried at a discounted cash flow estimate: the existing book is projected forward (runoff or deposit decay, charge-offs, and contractual or forecast floating interest on beginning-of-quarter balances) over a 60-quarter horizon with terminal repayment, and discounted at forecast SOFR plus the product’s discount spread.

Fair-value loans carry no allowance; credit losses and rate-driven revaluations flow through the net fair value gains (losses) line. Any day-one difference between fair value and balance is recognized in opening retained earnings; new balances added in later quarters are marked on addition.

Note that discounting a product at its own coupon spread yields fair value below par by roughly the present value of expected charge-offs — set the discount spread to the market yield spread net of expected credit losses if the intent is par at origination.

5Stress testing

The stress testing module re-runs the full model under three scenarios: credit deterioration multiplies every product’s charge-off and ALLL reserve rates; the rate shock shifts the SOFR path and cash, securities, and borrowing rates in parallel while fixed-rate coupons stay put (so fair-value elected fixed-rate positions bear mark-to-market impact and floating-rate positions reprice); the combined scenario applies both. Stressed runs share all other assumptions with the base case.

6Balance-sheet solve, tax & equity

The balance sheet is balanced each quarter by holding cash at the specified floor as a percentage of contractual deposit balances, investing surplus funding in securities, and covering any shortfall with borrowings; because securities and borrowing levels depend on retained earnings, each quarter is solved iteratively to convergence.

This funding-shortfall borrowing is separate from any scheduled term borrowings you enter (e.g. FHLB advances). Those are modeled as bullet advances: the full draw is held flat from its draw quarter through maturity (the stated term in quarters), then repaid in full at maturity, with interest each quarter on the outstanding balance. They are not amortized, and they accrue no interest after maturity.

Taxes are computed at the statutory rate on pre-tax income after applying accumulated net operating loss carryforwards. By default no deferred tax asset is recognized; an optional deferred-tax detail path books DTAs under ASC 740 (with valuation allowance) when elected. Equity equals initial capital plus cumulative retained earnings; no dividends or additional capital raises are modeled.

This is an illustrative planning model — a filed business plan requires interest-rate shock scenarios, capital stress, and month-one liquidity detail beyond this scope.

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