Credit Management Services
Our team of committed professionals will make your examination services convenient, well organized, and cost effective. Our philosophy is to work with the Board of Directors, Audit Committee, and Management to provide a service that continuously monitors the lending process to identify potential
weaknesses before they can become problems. We look forward to working with you and welcome the opportunity to be a part of your team.
CMS provides several bank-related consulting services and performs various special projects for our
clients. Our service offerings include:
weaknesses before they can become problems. We look forward to working with you and welcome the opportunity to be a part of your team.
CMS provides several bank-related consulting services and performs various special projects for our
clients. Our service offerings include:
- Credit review.
- Stress testing.
- Validation of ALLL methodology for accuracy and adequacy.
- Due Diligence reviews for mergers and acquisitions.
- CRE Concentration review.
- CECL implementation.
- Interim or special project staffing.
- Various special projects related to the management of a credit portfolio.
Credit Review
Goals:
Goals:
- Assess compliance with applicable laws and regulations.
- Assess compliance with board-approved policies and procedures.
- Test internal risk ratings to determine accuracy of loan grading.
- Evaluate credit underwriting practices, procedures, and policies.
- Review loan documentation and credit monitoring.
- Identify areas of risk that warrant management’s attention.
- As requested, provide an independent test of the accuracy and adequacy of the Bank's ALLL methodology.
Services
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Stress Testing
Stress testing has become a universal regulatory expectation. The benefits can be significant, especially relating to future capital planning. No matter your bank’s size, big or small, recent regulatory guidance calls for all banks to consider implementing a stress testing model.
Depending on the size and complexity of your balance sheet, you may choose to simply develop a loan portfolio stress testing model or you may need to consider the effects of stress testing the entire balance sheet.
If you have concentration issues in Commercial Real Estate, the regulatory guidance states that your model should be more robust.
Not sure where to start? We understand that tackling a new project can be overwhelming. Don’t recreate the wheel. We make it easy. The hardest step in building a new model is to pick up the phone and call us!
If you already have an acceptable stress testing model in place, we can also perform the required independent annual review of your model. We will validate the adequacy of your model and provide recommendations, if warranted, to improve it going forward. One of the most important steps of any stress testing model is to incorporate the results into your Capital Plan.
Like all new things, stress testing can be scary. It doesn’t have to be. We have built dozens of models. We will help eliminate your fears and provide a final product that is not only easy to use but will be acceptable to your Board of Directors and regulators!
Stress testing has become a universal regulatory expectation. The benefits can be significant, especially relating to future capital planning. No matter your bank’s size, big or small, recent regulatory guidance calls for all banks to consider implementing a stress testing model.
Depending on the size and complexity of your balance sheet, you may choose to simply develop a loan portfolio stress testing model or you may need to consider the effects of stress testing the entire balance sheet.
If you have concentration issues in Commercial Real Estate, the regulatory guidance states that your model should be more robust.
Not sure where to start? We understand that tackling a new project can be overwhelming. Don’t recreate the wheel. We make it easy. The hardest step in building a new model is to pick up the phone and call us!
If you already have an acceptable stress testing model in place, we can also perform the required independent annual review of your model. We will validate the adequacy of your model and provide recommendations, if warranted, to improve it going forward. One of the most important steps of any stress testing model is to incorporate the results into your Capital Plan.
Like all new things, stress testing can be scary. It doesn’t have to be. We have built dozens of models. We will help eliminate your fears and provide a final product that is not only easy to use but will be acceptable to your Board of Directors and regulators!
(714) 722-4066
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ALLL Validation
The Allowance for Loan and Lease Loss (ALLL) models and methodology are the most imprecise section of every bank’s balance sheet. As
such, the ALLL often gets significant regulatory scrutiny.
ALLL rules and expectations are ever-evolving. It is imperative that your bank stay abreast with the latest changes in the industry. We can
help. Whether you need help with model/methodology changes or an annual independent review, CMS is there for you.
Our experts have helped many banks with ALLL models over the years. This help ranges from tweaking an existing model to meet current
standards all the way to starting from scratch to build a new model from the ground up. If you are experiencing regulatory pressure
relating to your ALLL model, help is simply a phone call away.
All banks are required to have an independent review of their ALLL model at least annually. We can fulfill this requirement for your bank.
We review your model for conformance to regulatory guidelines, board-approved policies, and overall adequacy. We also offer back-
testing services to confirm that your methodology is historically reasonable.
As ALLL regulations expand, trust our experts to keep your bank on a path to excellence. Call us today to design a plan that will meet your
specific needs.
The Allowance for Loan and Lease Loss (ALLL) models and methodology are the most imprecise section of every bank’s balance sheet. As
such, the ALLL often gets significant regulatory scrutiny.
ALLL rules and expectations are ever-evolving. It is imperative that your bank stay abreast with the latest changes in the industry. We can
help. Whether you need help with model/methodology changes or an annual independent review, CMS is there for you.
Our experts have helped many banks with ALLL models over the years. This help ranges from tweaking an existing model to meet current
standards all the way to starting from scratch to build a new model from the ground up. If you are experiencing regulatory pressure
relating to your ALLL model, help is simply a phone call away.
All banks are required to have an independent review of their ALLL model at least annually. We can fulfill this requirement for your bank.
We review your model for conformance to regulatory guidelines, board-approved policies, and overall adequacy. We also offer back-
testing services to confirm that your methodology is historically reasonable.
As ALLL regulations expand, trust our experts to keep your bank on a path to excellence. Call us today to design a plan that will meet your
specific needs.
Due Diligence Review
Credit Management Services provides due diligence reviews and reports when a loan portfolio or entire bank is being acquired. These
reviews are performed after a customized scope is defined with the client.
The client’s primary objectives for the review will be defined prior to commencement. These can be modified to meet a client’s specific
goals. Typically, these objectives revolve around overall quality of underwriting, portfolio management, and adequate reserves.
These reviews can be performed on- or off-site, depending on the acquisition scenario.
Upon completion of our portfolio review, CMS will provide a draft report to the client which will detail our findings for each of the
objectives based upon the review of credits identified by the scope. At that point, CMS and the client should have an exit meeting, either by
phone or in person, to cover all findings and any questions or concerns that may exist from findings. A final report will then be issued.
The final report will cover all findings related to the objectives of the assignment as well as an executive analysis of each loan reviewed.
Credit Management Services provides due diligence reviews and reports when a loan portfolio or entire bank is being acquired. These
reviews are performed after a customized scope is defined with the client.
The client’s primary objectives for the review will be defined prior to commencement. These can be modified to meet a client’s specific
goals. Typically, these objectives revolve around overall quality of underwriting, portfolio management, and adequate reserves.
These reviews can be performed on- or off-site, depending on the acquisition scenario.
Upon completion of our portfolio review, CMS will provide a draft report to the client which will detail our findings for each of the
objectives based upon the review of credits identified by the scope. At that point, CMS and the client should have an exit meeting, either by
phone or in person, to cover all findings and any questions or concerns that may exist from findings. A final report will then be issued.
The final report will cover all findings related to the objectives of the assignment as well as an executive analysis of each loan reviewed.
Special Projects
We find that our bank clients often need help with ‘special projects’. This portion of our business covers a very large range of services. If
you have a credit function need, there is a strong probability that we can help you solve it.
Some examples of these types of special projects include:
CMS has placed personnel in temporary and permanent credit function roles for several clients. If you have a need for short-term or
permanent help in your credit department, we can likely provide you with options.
We find that our bank clients often need help with ‘special projects’. This portion of our business covers a very large range of services. If
you have a credit function need, there is a strong probability that we can help you solve it.
Some examples of these types of special projects include:
- Improving problem loan reporting.
- Providing personnel for short periods to perform underwriting, portfolio management, loan work-out, and virtually all other
components of a credit department. - Providing interim CCO candidates.
- Placing permanent CCO and Credit Administrators.
- Training for all credit department functions.
CMS has placed personnel in temporary and permanent credit function roles for several clients. If you have a need for short-term or
permanent help in your credit department, we can likely provide you with options.
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