Prior to each review, we schedule a conference call with Bank Management to discuss the scope, any changes in the portfolio, and any areas of concern.

When preparing the Pull List, we sample a broad representation of the loan portfolio, with emphasis on a cross section of loan types, loan size, relationship officers, regions, risk grades, as well as areas of concern identified in the pre-audit conference call.

During a loan review, each credit will be reviewed for credit quality, loan approval authority and compliance with conditions of loan approval, proper loan documentation, file organization, underwriting to the organization’s loan policy and ongoing management of each loan relationship. This includes covenant monitoring and tracking, calculating debt coverage ratios, annual financial updates and proper cash flow, including global cash flow.

We review loans for compliance with lending regulations and guidance.

For adversely graded loans, we review for an adequate amount of loan loss reserve, proper identification of loan impairment, adequacy of current action plans and ongoing follow-up and management of these loans.

We discuss the review results with Management throughout the review.

At the conclusion of the review, Management will be fully informed of the results of the review and the contents of the report prior to our exit from the organization.