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| CEIS loan review programs are implemented by experienced senior lenders who often have senior or executive level management experience. The professionals who deliver the CEIS product were associated with money market, regional banks, community banks, and commercial finance companies. |
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| CEIS’ loan review programs are customized to the client's needs and are software assisted. The programs typically review over a twelve month period as much as 75% of the client's average outstanding loans and letters of credit. The reviews are conducted at specified intervals during the engagement period and address, at each visit, a sufficient sample to satisfy the twelve-month target. At each regularly scheduled review, we update the data and remarks regarding the previously criticized and classified loans. Further, we review newly criticized or classified loans, delinquencies, non-accruals, restructured transactions, new and renewed commitments since the prior review visit, and when relevant, other borrower related credit exposures. We test the adequacy of the allowance for loan and lease losses as well as critique the organization's lending policies and procedures and overall lending process. |
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| At each review visit, we schedule sufficient resources to complete the on-site review without delay. Prior to each regularly scheduled visit, CEIS faxes an "opening day request" memo to the bank. The list contains many of the standard information requests along with items specific to the client. We request that certain materials be sent in advance and others to be available upon our arrival at the bank so that we can immediately commence the review. We normally start the review with the criticized and classified loans, then to any remaining delinquent and non-accrual accounts, and lastly to other accounts to satisfy the requirements of the engagement. |
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| Aside from reviewing the credit files, internal loan reports, and testing the loan documentation for completeness and accuracy, the CEIS conclusions consider discussions with the account officers. The discussions address those situations where there may remain a material question bearing on the final grade determination. We attempt to minimize any disruption of the account officers' time and therefore the discussions are normally after all other avenues have been considered and are organized to be time efficient, whenever possible. |
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| At the conclusion of the on-site review, we orally present our findings to the appropriate management and discuss any remaining differences or open items as well as any observations regarding the lending and administrative process. After the on-site review, the reviewers send their drafts and work papers to the CEIS office where the reviewers’ grade conclusions are subject to further review. Subsequently, we submit to the bank a detailed draft report. The initial written report is submitted as a "draft" so that any recent material developments or information are considered prior to the final release. We look for the final report to be completed within four weeks of completing the on-site review. |
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| The written report includes an executive summary of the report’s findings and recommendations regarding overall credit and loan portfolio management, portfolio quality and a detailed write-up on each loan reviewed. The report includes summary schedules on the review's conclusions relative to the overall bank and to the portfolio performance against its peers. The schedules quantify the loan quality indicators, grade variances, estimated outlook for potential grade migration, structural weaknesses in transactions, adequacy test of the loan loss reserve, record of all relationship reviewed in prior 12 months, appraisals and cap rates, exceptions, and other schedules germane to the client’s portfolio. |
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| CEIS' loan review fees are typically fixed in price and are all-inclusive. The fees are quoted on the overall engagement's goals, and in consideration of the potential overall relationship. We look for the annual fees to be paid in equal installments according to the frequency of the regularly scheduled reviews and upon receipt of the draft. |
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