5 Key Considerations for Independent Loan Reviews

February 21st, 2024

This article was published by Daniel Yancone, Consulting Manager.

Banks and lending institutions are facing many of the same challenges. Managing interest rates and internal growth while maintaining profitability and simultaneously being compliant with all new laws and regulations. This highlights the importance of an independent third-party loan review to manage risk by providing an unbiased, high-quality analysis of the commercial portfolio and allowing internal staff to focus on key internal functions.

Take a look at the below for considerations to keep in mind when having an independent commercial loan review:

Assessment of Lending Polices

  • Obtaining a fresh perspective on lending policies from an industry expert to solidify best practices. One of the major benefits of utilizing an experienced loan review firm is the invaluable knowledge obtained from client experiences with lending institutions with similar profiles.

Underwriting Best Practices

  • Similar to lending policies, the extensive experience in client service provides a great resource to solidify underwriting best practices. This is a great opportunity to consult with an expert in the field on any questions regarding underwriting procedures.

Impact of Changing Rate Environment

  • Economic uncertainty has become the new normal over the past few years. Having a true business partner to help navigate these rapid changes will position your institution for success.

Validation of CECL Methodologies/Accounting Standards

  • The benefits do not begin and end with a competed loan review report. An experienced loan review firm is a consulting partner that with extensive knowledge of new accounting standards and regulations that may affect the institution.

Clear, Concise, and On-Time Reporting

  • Performing a commercial loan review is a huge undertaking. An experienced firm has the bandwidth to perform an extensive review in the timeframe required, without sacrificing quality. The final report will provide an in-depth dive into the key relationships reviewed and any recommendations to consider.

If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.


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