What We Do

A financial institution’s loan portfolio usually represents the most significant portion of the balance sheet. The loan portfolio accounts for the largest level of earning assets and also provides the greatest amount of risk to the financial institution. The independent loan review function assists your institution in its efforts to manage and monitor the various levels of credit and collateral risk within the portfolio. A good independent loan review plan can assist the bank in reaching its profitability goals by helping to reduce loan losses due to problem loans.

We provide an experienced team that helps the institution achieve its goals. We review loans both from a documentation (collateral documents review) and capacity to repay according to the terms of the loan (credit review). The collateral review and credit review are then combined to determine the customer’s overall financial/collateral position and is “risk graded” accordingly with identified exposures, if any.

We visit with Management to determine what is best for each institution and their specific needs, and then provide a loan review scope and review that occurs quarterly, semi-annually or annually.

We recognize that our clients, both community and regional banks, may not be able to maintain an internal loan review function due to the cost of staffing this critical area year round and the need for independence from the lending function.

Our team of review personnel has significant experience as bank executives, Board Members and/or regulatory examination backgrounds.

The independent loan review strives to meet the following objectives:

1. To promptly identify loans having potential credit weaknesses, and to appropriately classify loans with well-defined credit weaknesses that jeopardize repayment, so that timely actions can be taken and losses minimized.
2. To project relevant trends which affect the collectibility of the portfolio and isolate potential problem areas.
3. To provide essential information to determine the adequacy of the loan loss reserve.
4. To assess the adequacy of and adherence to internal credit policies and loan administration procedures, and to monitor compliance with relevant laws and regulations.
5. To evaluate the activities of lending personnel.
6. To communicate to and provide Management and the Board with an objective and timely assessment of the overall quality of the loan portfolio.
7. To provide benchmarking analysis to Management and the Board by comparing current loan review findings to past review findings.

The loan review function reviews each collateral file for the proper perfected collateral documentation for each type of collateral pledged. The credit files are analyzed for the proper documentation including current financial statements on the borrowers and guarantors. When the current financial information is available, reviewed and analyzed, a debt service coverage ratio is determined.

Our company also acts as problem bank consultants to assist financial institutions with specialized needs including Regulatory Memorandums of Understanding and Cease and Desist Orders.

Verde also provides assistance to banks that are interested in expanding their market presence and are considering this expansion via an acquisition of a quality institution. Verde also provides Management advisory services to financial institutions that are considering the strategic direction of selling their institution.