CEIS conducts an analysis of commercial real estate concentrations within the Bank’s commercial loan portfolio and proposes enhancements to the Bank’s current concentration management policy, procedures and reporting. The analysis will be consistent with relevant regulatory guidance, including (without limitation) the OCC’s “Concentrations of Credit” booklet of the Comptroller’s Handbook (December 13, 2011) and the Interagency Guidance on CRE Concentration Management (December 6, 2006).
Naturally, each analysis is customized to the client’s portfolio. Nevertheless, most often the analysis includes the following elements:
- Identification of areas of concentration;
- Establishment of limits to manage concentration levels;
- On-going reporting to monitor concentration levels and the risks of individual areas of concentration;
- Remediation requirements when limits are approached or exceeded;
- Governance requirements for the approval, review and monitoring of concentrations, including outlining roles and responsibilities of the Board and senior management;
- Policy which documents the above requirements; and
- Analysis supporting the above elements.
CRE Concentration Analysis can be performed on a standalone basis or combined with CEIS’ Loan Review and/or Stress Testing activities.
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