LOAN REVIEW

To a financial institution, the loan portfolio is typically the largest group of assets on the balance sheet, while posing the greatest amount of risk.

For years, many banks, particularly community banks, relied on their knowledge of borrowers as being more than sufficient to rule out the need for an objective loan review. However, recently, that feeling of confidence and security has diminished. Now, many bankers are recognizing the need for strong loan review programs. Some implement internal programs or hire outside firms, and others combine the two approaches, in order to enhance the entire review program.

That is why Credit Risk Management, L.L.C. works with you to provide a full, independent assessment of your loan portfolio, or provide services that will complement your internal review program. Through the use of electronic downloads of the bank's loan portfolio, we can efficiently and accurately identify areas of risk in order to select a quality sample of loans for review. We also incorporate these methods in our due diligence procedures.

Below are the services that are included in a loan review:

• Overall evaluation of portfolio quality
• Evaluation of compliance with institution's written policies
• Verification of security interest perfection
• Review of compliance regarding regulatory and lending related laws
• Analysis of financial statements
• Establishment of a loan grading system
• Evaluation of documentation standards
• Review of loan administration
• Evaluation of lending personnel
• Training of internal loan personnel and lenders

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