Loan Review

We offer a multitude of loan review services to small, mid-sized and large community financial institutions. These services can be tailored to each institution and concentrate not only on the accuracy of risk ratings, but also on the effectiveness of loan underwriting and approval, and loan administration processes as well.

Our written reports are more than just a compilation of work papers and boilerplate statistics. Our reports help give the Board and executive management insight into their loan quality of the portfolio and its administration.

Loan Review is a primary responsibility of executive management and Boards of Directors as they supervise and manage estimated credit risks associated with their institution’s strategic assets. Loan portfolios are a key indicator of the overall health of an institution and usually contain the most significant group of earning assets on the balance sheet. As such they also carry some of the greatest risk.

Loan Review assignments require a knowledge and understanding of both current industry and regulatory standards, as well as credit risks in borrower profiles, underwriting, loan structure, economic trends, and portfolio administration processes.

We conduct hundreds of Loan Reviews annually that demand objective assessments of the entire credit risk management process. Our professional consultants each possess years of financial institution credit examination or lending experience. Our team can provide portfolio analysis with recommendations for you to improve your credit quality and administration.

We can conduct Loan Reviews either onsite or offsite through secure remote network connections. We handle our work discreetly interrupting daily operations.

Since the 2008 recession, approximately 500 financial institutions have failed, with the majority failing because of loan problems. Today, financial institutions recognize the importance of conducting periodic independent loan reviews and consulting with qualified professionals, such as FORVIS, to help them identify and control credit risks.

Loan reviews may include the following:

• Overall Evaluation of Portfolio Quality
• Evaluation, Adequacy, and Compliance with Written Policies
• Review of Credit Administration, Underwriting, and Approval Processes
• Analysis of Borrower Financial Statements
• Evaluation of Collateral
• Verification of the Perfection of Security Interests
• Review of Compliance with Lending-Related Safety and Soundness Laws and Regulations
• Training of Internal Loan Review Personnel
• Establishment of a Loan Rating System
• Validation of the Methodology for Establishing an Adequate Allowance for Loan and Lease Loss (ALLL) Accounts
• Evaluation of Documentation Standards, Tracking Mechanisms, and Reporting Functions

FORVIS requires Loan Review engagement letters to be authorized by the Board of Directors, or by a Board Committee. FORVIS will present Loan Review Reports to the Board or to an independent entity.