Our loan review associates provide credit risk management services to numerous banks ranging in size from de novo status to large regional banks across the U.S. and international banks. Our loan review program is client based and tailored to your bank’s needs, while adhering to regulatory loan review guidelines. Depending on the institution’s size, complexity, and management practices our services are tailored to your situation. Our diverse mix of clients allows us to share with you the current regulatory climate and emerging issues regulators are focusing on. We have extensive experience in reviewing many different loan types: syndicated loans: large commercial real estate loans; construction financing; international trade finance; asset based lending; leasing activities; credit card lending; sub-prime loan products; shared national credits; and hotel financing. We also have extensive experience reviewing loans to numerous industries. Our Approach Our methodology and related procedures used in our loan review are risk-based, which means additional attention is focused on those areas that we consider higher risk. Our procedures are derived from our firm’s experience in this field, both as examiners and as consultants. Our Loan Review Service Our loan review services independently assess the quality of the bank's loan portfolio, test the bank’s internal loan grading systems, and provide credit administration recommendations. In the course of assessing credit quality, we consider the underwriting of each credit, as well as the borrower’s financial capacity and payment performance. We assess each credit for proper approval procedures by the loan officer and the appropriate committee, as well as adherence to the bank’s loan policy. We also review each credit for adherence to loan agreement covenants. Our procedures include a review of required collateral documentation (including the perfection of the lien status) for loans in our sample.

Banks are required to maintain an adequate Allowance for Loan and Lease Losses (ALLL). The regulators have published specific guidelines (that incorporate accounting rules) for establishing the methodology for determining the level of the ALLL. An appropriate ALLL methodology is crucial to have adequately funded reserves and comply with federal regulations. Our ALLL Methodology Reviews will analyze the bank's policies and methodology to determine if they are in compliance with regulatory guidelines. In addition, we will test the accuracy of the data and formulas in the ALLL analysis. Our review includes a review of the bank's process of determining the FAS 5 reserve (historical loss rates and qualitative factors) and the FAS 114 reserve.

In 2006, regulators issued a Policy Statement in response to increased CRE lending practices at banks (Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices). It is acceptable for banks to have a concentration, however if they do, the bank must have adequate risk management practices to control the risk. Our CRE Concentration Risk Management Practices Review will review the bank’s systems for complying with the regulatory guidelines. We will review: - Oversight provided by the board of directors and senior management - Portfolio management - Management information systems - Market analysis - Credit underwriting standards - Portfolio stress testing and sensitivity analysis - Credit risk review function

Our Due Diligence reviews are tailored to your needs. The banking environment is always changing and this presents a myriad of opportunities for bank investors. Whether purchasing a bank, merging institutions, or purchasing a pool of loans, our expertise as examiners and consultants will uncover potential risks and loan losses. Our findings will let you make an informed decision about your investment.

Other Real Estate Owned (OREO) comprises of all real estate, other than bank premises, owned or controlled by the bank including real estate acquired through foreclosure. Bank regulators have established guidelines (that incorporate accounting rules) for managing the OREO management process. Our OREO Management Review will assess the bank's process of obtaining and maintaining OREO. We will review the adequacy of the bank's policies, practices, procedures, internal controls regarding other real estate owned; determine if the bank officers and employees are operating in conformance with the established guidelines; evaluate the validity and quality of all other real estate owned; determine compliance with laws and regulations.

For some smaller banks, the credit administration function is split among senior management and the individual loan officers. However, many banks have a dedicated Credit Administration Department that assists in the oversight of the entire credit administration function. Our Credit Administration Reviews will assess the adequacy of department's performance at the specific duties. In addition, based on our experience with other institutions, we will identify if there are other duties outside of the Credit Administration Department that may be better suited under the Credit Administration Department.