During these difficult times. many banks are still dealing with troubled loan portfolios and regulatory enforcement actions.
BSG’s team of commercial lending experts, several of whom are former bank regulators and external loan auditors, are working now with community banks to help develop and implement a recovery process for troubled loan portfolios. Our comprehensive process begins with an “OCC style” review of an “over sample” of loan files to ensure the depth of issues is determined and quantified. BSG consultants then develop a tailored process and plan to reduce the level of criticized assets in an accelerated timeframe. In conjunction with the recovery plan, BSG prepares a multi-year financial analysis to quantify the implications on bank profitability, liquidity and capital.
BSG provides support during the recovery process as required to monitor the bank’s progress. BSG consultants will also help develop and document procedures to establish an effective commercial lending function that will exceed the general standards covered in a regulatory examination.
As most community bank boards and executives know, when under an enforcement action it is critical for a bank to get out ahead of the higher level of scrutiny accompanying such action. Establishing credibility as a board and management team that is proactively attentive to capital requirements and embedded portfolio risk is the first step toward a successful recovery. Often, this means a growing bank will need to forego growth in the short term and turn its full attention to reducing the cost of funds and other expenses.
BSG consultants can help a community bank board and management team stay the course with a disciplined plan for recovery (aka survival) that is reassuring to regulators, employees, customers and shareholders.For more information, click here.