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Loan Review

RDK & Associates, Inc. customizes loan review to meet the scope and frequency needs of each particular bank. RDK will develop a written proposal for performing your bank’s loan review based on the bank’s loan portfolio complexity and the needs of management and the Board of Directors. RDK is flexible in the scope and frequency of each review. RDK reviews can be scheduled to fit the needs of your bank.

Each loan review is conducted with the intent of assessing the overall quality of the loan portfolio. Borrower’s loans are reviewed for credit quality, documentation exceptions, compliance with the bank’s loan policy and compliance with banking laws and regulations. Underwriting standards and procedures are also assessed during these reviews. In addition, impairment for the Allowance for Loan and Lease Losses (ALLL) are developed for problem loans.

RDK’s assessment of credit quality is based upon the information found in the loan files. A discussion with individual loan officers is conducted prior to the finalization of loan grades. These discussions are used to clarify information or discuss a disagreement as to the classification of a particular borrower. RDK also discusses recommendations we may develop for improving the oversight of individual borrowers and/or the bank’s overall loan portfolio.

Once the loan review is complete, a written report is generated detailing our findings. Each report includes a list of borrowers reviewed and their respective grade, a list of borrowers with documentation exceptions, loans in violation of banking policy or laws and regulations and impairment to the ALLL for all criticized loans. A brief summary comment will accompany the report explaining the overall findings and, if warranted, recommendations to improve the bank’s lending function or discussion of problems observed. The report includes a “Reasons for Classification” page that lists each criticized loan, our classification and a brief explanation of the basis for criticism.

RDK also provides individual loan summaries for each borrower reviewed. These summaries range from one to four pages based on the complexity of information requested by the bank. These summaries indicate the name of the borrower, date the loans were reviewed, which loans were reviewed, the grade assigned to the loans, the reason for the grade, the amount and an explanation as to how the impairment was determined, documentation exceptions, financial spreads, and a recap of strengths, weaknesses, credit analysis and underwriting deficiencies.