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A loan review helps to ensure your financial institution is actively managing and monitoring credit risk within the loan portfolio.

Some large financial institutions have internal staff that performs these duties; however, small and midsized financial institutions often partner with qualified outside professionals to accomplish this task.  Even large financial institutions may obtain a second opinion on the work of their internal loan review staff.

Assembling an internal solution to accomplish loan review goals is often hindered by these challenges:

• Limited staffing resources
• Lack of experience
• Independence issues
• High costs associated with salaries and benefits
• Issues of credibility with examiners

Faced with these challenges,financial institutions often enlist outside professionals for assistance with their loan review process.

How we can help
Our professionals have direct experience as community bankers and regulatory examiners. We offer a full-service loan review solution for a wide range of lending products and services including commercial, real estate, construction and agricultural. As part of this approach, we obtain and analyze borrower and loan file information. We then assess management’s assigned loan grades using the bank’s internal rating system and report our findings to management and the board of directors.

We are also able to limit the scope of our review to documentation and compliance with established underwriting guidelines, and perform consumer and real estate loan file reviews. Our review of these files is focused on compliance internal policies,underwriting guidelines and file documentation standards.

Our approach to loan reviews is designed to:

• Assist management and the board of directors in the assessment of credit risk management for the loan portfolio
• Provide an objective opinion on the content of loan policies and procedures from a regulatory perspective
• Provide feedback on the accuracy and fairness of the presentation of credit risk in loan presentations
• Evaluate processes in place to manage criticized and classified problem loans
• Independently evaluate the application of internal loan grading definitions and identify documentation and loan policy exceptions
• Assess the effectiveness of the credit administration processes and systems
• Provide management with value-added recommendations, including trend analysis, comparisons with peer groups and commercial loan best practices
• Give an independent assessment on the adequacy of the allowance for loan loss reserves, if requested

Why RSM McGladrey
We offer a customized, flexible approach to loan reviews — combining in-depth industry knowledge and a longstanding commitment to growing organizations.

By using our professionals,your institution maintains the flexibility to increase or decrease the scopeand emphasis of each review — without consideration of the fixed costassociated with an internal loan review function. Additionally, we have theresponsibility for the selection, training and support of thesehighly-specialized individuals.