Understanding Your Financial Institution’s Needs: Loan Reviews

Credit quality is critical to the health and continued success of your financial institution as historically loans represent the highest level of risk on your balance sheet.  Because loans represent a large percentage of assets for most financial institutions, their inherent risks make a solid loan review program essential.  Elliott Davis Decosimo has a dedicated team with experience reviewing credit files which allows us to provide value added advice and recommen­dations.

We tailor each engagement to fit the institution’s specific needs.  Our loan review procedures include the examination of the following:

  • Current financial information;
  • Financial/risk analysis for sources of repayment;
  • Loan underwriting adherence to financial institution policy;
  • Loan approval compliance with financial institution policy;
  • Consistency of terms/conditions between loan approval and closing documentation;
  • Adequacy of appraisal/environmental reports;
  • Perfection of security interest;
  • Adequacy of insurance; and
  • Other pertinent file information, as well as recommendations for loan grading, accrual/non-accrual status, specific reserves and charge-off.

How does our loan review approach differ?

Prior to beginning the engagement, we take the time to meet with management to discuss timing of review and scope of work.  Keeping you involved every step of the way, we will discuss our findings and concerns verbally with management throughout the audit fieldwork to allow sufficient opportunity to review and discuss any written draft comments before a final report is issued.

Our team will meet with you to conduct an exit meeting at the conclusion of the audit fieldwork to discuss a summary of your review, potential changes in risk ratings, general observations and any open items. Upon issuance of the final report, you will receive a full executive summary, comments, recommendations, scope overview, summary of loans reviewed, loan documentation exception summary and a full write-up on downgraded loans.

For more information about how our team can assist your organization in determining the most appropriate scope and approach to address this need, given the particulars of your credit operation – contact your Elliott Davis Decosimo advisor or email financialinstitutions@elliottdavis.com.