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Due Dilligence

RDK & Associates, Inc. performs due diligence reviews customized to the clients needs. RDK can also help market your bank for sale or find key strategic bank acquisitions. Although our emphasis is on the assessment of the loan portfolio, RDK can also perform a complete review of the target bank. These complete reviews include expenses, assets, assessment of earnings, liquidity, asset/liability positions, employee and management reviews, compliance and audit reviews, market penetration and competition.

In many cases we augment a bank’s staff in performing due diligence review of target banks. In these cases, the client will assign a specific part of the due diligence for our firm to perform, while bank employees or other outside consultants perform other parts of the review.

Due diligence is conducted with the intent of assessing the overall quality and operations of each area reviewed. In case of the loan portfolio, RDK reviews a sample of the portfolio and assesses each borrower for credit quality, documentation, compliance with the bank’s lending policies, and compliance with banking laws and regulations. Underwriting standards and procedures are also assessed during the reviews. Impairment for the Allowance for Loan and Lease Losses (ALLL) is developed for all problem loans. In addition, we assess the overall adequacy of the ALLL for the purposes of acquisition.

Once complete, RDK generates a written report detailing our findings. Each report includes the areas reviewed and problems found in the quality, management and/or operation of that area. Potential loss within the asset accounts is listed and explained. Deficiencies in accounting, audit and compliance will be included in each report and explained. The report will include a description of the methodology used to assess each area. A brief summary comment will accompany the report explaining overall findings and, if warranted, recommendations to improve any problem areas.