Ascertaining the types and levels of credit risk in a loan portfolio requires vigilance and a dedication to staying ahead of the curve with predictive analytics and expert assessment. A crucial component of any credit risk mitigation strategy is the independent loan review and the execution of effective credit portfolio risk management techniques and industry best practices.
A thorough third-party loan review will provide management with an objective assessment of credit quality, while addressing credit weaknesses in the portfolio that could jeopardize a financial institution’s regulatory CAMELS rating or Aeris assessment for safety, soundness & compliance. Furthermore, preparation for a sale of loan assets is made easier when the actual condition and performance of loans for sale have been affirmed by a trusted third-party assessment.
We are commercial credit risk management experts providing third-party loan review and related services to financial institutions including community banks, CDFIs and credit unions. We bring extensive lending and regulatory experience to every loan review engagement.
Typically, the scope of a loan review engagement will cover:
• Assessing the quality & condition of the overall credit portfolio
• Identify underwriting, documentation & collateral weaknesses
• Assess the accuracy & timeliness of borrower risk grades
• Ensure credit policies, processes, procedures & standards are observed
• Assess the quality & value of underlying collateral and credit enhancements
• Identify potential increased risk due to borrower or portfolio quality deterioration
• Expose instances of lending violations, potential fraud and negative news connected to
borrowers, industries, jurisdictions and related parties
• Alert management to issues that require immediate corrective action
• Assist management in maintaining compliance with regulatory commitments
We are also capable of providing thoughtful guidance and recommendations for improving asset quality, assessing portfolio concentration risk and for implementing best credit risk management practices. Whether at the global, segment, relationship or borrower level, a well planned and executed loan review is essential for maintaining a healthy credit portfolio and high credit risk management standards.
Bridgehampton Strategy is a service mark of Bridgehampton Strategy Advisors, a unit of Murdock Barksdale & Co. All Rights Reserved 2022. A veteran owned and operated enterprise.