Credit Risk Management. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the Commissioner an acceptable written plan to strengthen credit risk management practices. The plan shall, at a minimum, address, consider, and include:
Credit Risk Management. (1) Within ninety (90) days, the Board shall develop implement, and thereafter ensure Bank adherence to a written credit risk management program to improve credit risk management processes and address credit deficiencies noted in the Report of Examination (“XXX”). The program shall include but not be limited to:
(a) a revision and/or development of the Bank’s procedures to ensure accuracy of risk ratings and proper and timely problem loan identification to include non-accrual loans;
(b) ensure the bank’s credit policy aligns risk rating, accrual and non-accrual status definitions with regulatory definitions and ensures that all appropriate personnel are trained on risk ratings and accrual/non-accrual status;
(c) a revision and/or development of the Bank’s procedures to ensure current financial data is obtained on borrowers and guarantors;
(d) ensure management performs and documents comprehensive analyses to support decisions on the accrual treatment of troubled borrowers, including troubled debt restructurings;
(e) a revision and/or development of the Bank’s procedures to ensure quality financial analysis and documentation for new and renewed credits;
(f) a revision and/or development of the Bank’s procedures to ensure ongoing guarantor analysis, to include a review of the borrower’s or guarantor’s global cash flow analysis and analysis of contingent liabilities;
(g) a system to track and analyze exceptions;
(h) a revision and/or development of the Bank’s procedures to ensure MIS is developed to track completion of annual reviews and financial statement exceptions; and
(i) At least quarterly, the Board shall prepare a written assessment of the Bank’s credit risk, which shall evaluate the Bank’s progress under the aforementioned program. The Board shall submit a copy of this assessment to the Assistant Deputy Comptroller.
(2) Prior to adoption by the Board, a copy of the credit risk management program shall be submitted to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection. Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall adopt and the Bank shall immediately implement and adhere to the credit risk management program.
Credit Risk Management. (1) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to a written program to improve credit risk management at the Bank. The program shall include, but not be limited to:
(a) procedures to ensure accuracy of risk ratings and proper and timely problem loan identification;
(b) procedures governing the supervision and control of nonaccrual loans that,
(i) are consistent with the accounting requirements contained in the Call Report Instructions;
(ii) address the circumstances under which accrued interest due on a loan may be added to the outstanding principal amount when the loan is renewed or restructured;
(iii) address circumstances under which restructured loans (TDRs) will be maintained on accruals status;
(iv) require the monthly presentation to the Board of all loans meeting any of the nonaccrual criteria; and,
(v) require the immediate reversal or charge off of that portion of the remaining accrued interest on such loans that, when combined with principal, is not protected by sound collateral values;
(c) procedures to ensure an independent appraisal review process is in place;
(d) procedures to ensure risk ratings are appropriately reflected on internal MIS;
(e) procedures to ensure current financial statements are obtained and reviewed, including a global analysis of the borrower, in a timely manner;
(f) procedures to ensure appraisals and re-appraisals are obtained in a timely manner; and,
(g) procedures to ensure that appraisal dates are appropriately reflected on internal MIS.
(2) The Board shall submit a copy of the program to the Assistant Deputy Comptroller.
(3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.
Credit Risk Management. Credit risk refers to the risk that a party will default on its contractual obligations resulting in a financial loss to Quiport. As a means of mitigating the risk of financial loss from defaults, Quiport requests guarantees, when appropriate, from commercial customers that operate and/or lease airport facilities. Management diligently monitors potential events that could affect customer risk.
Credit Risk Management. (1) Within ninety (90) days of this Agreement, the Board shall prepare, adopt and thereafter adhere to revisions to the Bank’s loan policy, as well as any necessary procedures, to address weaknesses in the Bank’s credit risk management and underwriting, that, at a minimum, include:
(a) policies and procedures designed to aggregate, track and eliminate exceptions to the Loan Policy, underwriting guidelines, and supervisory loan to value limits, for all loans to include, at a minimum:
(i) monthly Board monitoring of policy exception reports that track the aggregate number and dollar amount of loans with material exceptions by type of loan and loan officer, and measured as a percentage of Tier I Capital plus the Allowance for Loans and Lease Losses;
(ii) procedures to hold employees and officers accountable for non- compliance with the Bank’s loan policy and other underwriting requirements; and
(iii) monthly reports to the Board of all exceptions that have been cured since the previous month’s report; and
(b) procedures to ensure appropriate ongoing monitoring, including periodic receipt, analysis and documentation of sufficient financial and operating information to measure and monitor the borrower’s and guarantor’s financial condition and repayment ability.
(2) Effective as of the date of this Agreement, the Bank may not grant, extend, renew, modify or restructure any loan or other extension of credit, or purchase any loan participation, equal to or exceeding two hundred fifty thousand dollars ($250,000), without:
(a) documenting the specific reason or purpose for the extension of credit;
(b) identifying the expected source of repayment in writing;
(c) structuring the repayment terms to coincide with the expected source of repayment;
(d) obtaining current and satisfactory credit information, including performing and documenting analysis of credit information and a detailed cash flow analysis of all expected repayment sources;
(e) individual stress testing of all loans for changes in interest rates at origination;
(f) determining and documenting whether the loan complies with the Bank’s Loan Policy and if it does not comply, providing identification of the exception and justification to support waiving the policy exception;
(g) making and documenting the determinations made regarding the customer’s ability to repay the credit on the proposed repayment terms;
(h) providing an accurate risk assessment grade and proper accrual status for each credit;
(i) docume...
Credit Risk Management. (1) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank’s credit risk management consistent with the guidance set forth in the OCC Handbook “Rating Credit Risk”. The program shall include, but not be limited to:
(a) procedures to ensure accurate and timely risk grades, including loss recognition and identification of nonaccrual loans;
(b) procedures for early problem loan identification;
(c) procedures for establishing loan officer and credit administration accountability for failure to assign accurate and timely risk grades on loans, including recognition of nonaccrual status under their respective supervision;
(d) implementation of an effective credit risk training program for all lending staff, internal loan review staff, financial analysts, and members of the Directors Loan Committee;
(e) stress testing of higher risk loan concentration categories (non-owner occupied, commercial real estate (CRE), land, and construction loans), including at a minimum, loans to the ten largest borrowers in each higher risk loan concentration category; and
(f) a system to ensure that policy exceptions are properly tracked, aggregated, and reported to the Board at least quarterly.
(2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.
Credit Risk Management. Each Mortgage Loan investment must be in accordance with the Company's credit risk management policies and underwriting criteria, including its policies or criteria, to the extent applicable, regarding loan-to-value ratios or loan-to-cost ratios, borrower and tenant credit quality, credit enhancement, collateral requirements, etc.
Credit Risk Management. (1) Within ninety (90) days, the Board shall prepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, a written program (including appropriate revisions to policies and procedures) designed to manage the risk in the Bank’s commercial loan portfolio in accordance with safe and sound banking practices, that, at a minimum, includes:
(a) the establishment of an overall commercial lending strategy, to include concentration limits stratified by type, locality and other meaningful measures;
(b) monthly monitoring of concentration reports that stratify the portfolio by product type, locality and other meaningful measures;
(c) strategies and procedures to manage concentrations to conform with established limits set in Subparagraph (a) of this Article;
(d) significant borrower stress testing and/or sensitivity analysis to quantify the impact of changing economic conditions on asset quality, earnings, and capital;
(e) revised policies and procedures to ensure that the lending officers accurately and thoroughly analyze and assess all primary and secondary repayment sources for loans, including but not limited to:
(i) assessing the potential impact of any contingent liabilities;
(ii) obtaining documentation to verify liquid assets;
(iii) conducting a global cash flow analysis;
(iv) consideration of projects financed elsewhere; and
(v) integrating multiple partnership and corporate tax returns, business financial statements, K-1 forms, and individual tax filings;
(f) systems to ensure that individual loan officers are held accountable for completing an adequate analysis of potential commercial credits pursuant to this Article;
(g) the establishment of Loan Policy commercial underwriting standards by commercial loan type that include specific requirements relating to:
(i) maximum loan amount and maturity by type of loan;
(ii) approval authorizations;
(iii) minimum file documentation and analysis;
(iv) minimum requirements for initial investment and maintenance of hard equity;
(v) minimum standards for borrower net worth, property cash flow/debt service, collateral coverage, and guarantor support;
(vi) minimum standards for the acceptability, and limits of soft cost and/or interest reserve financing;
(vii) maximum amortization periods and minimum principal curtailment for CRE and construction projects that are not meeting original projections; and
(viii) procedures for loan closing and disbursement processes, in...
Credit Risk Management. (1) The Bank shall take immediate and continuing action to develop, implement, and ensure Bank adherence to a written program to reduce the level of credit risk in the loan portfolio, improve the Bank’s loan portfolio management and correct each deficiency cited in the XXX. At least quarterly, the Board shall prepare a written assessment of the Bank’s credit risk, which shall evaluate the Bank’s progress under the aforementioned program. The written program and quarterly assessments shall be submitted to the Assistant Deputy Comptroller. The program shall include, but not be limited to:
(a) procedures to strengthen credit administration, underwriting, and problem loan identification particularly in the commercial, commercial real estate, and agricultural loan portfolios;
(b) procedures to strengthen management of lending operations and to maintain an adequate, qualified staff in all functional areas, including lending officers; and,
(c) action plans to manage and control commercial loan growth.
(2) The Bank shall take immediate and continuing action to protect its interest in those assets criticized in the XXX, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(3) The Board shall hold all Bank officers who are involved in lending accountable for properly risk rating loans and bringing potential and actual problem loans to the attention of management and the Board in a timely manner.
(4) Effective immediately, the Bank will grant, extend, renew, alter or restructure any commercial or agricultural loan or other extension of credit in an amount greater than $100,000 only after:
(a) documenting the specific reason or purpose for the extension of credit;
(b) identifying the expected source of repayment in writing;
(c) structuring the repayment terms to coincide with the expected source and timing of repayment;
(d) obtaining and analyzing current and satisfactory credit information, including cash flow analysis, where loans are to be repaid from operations;
(e) failure to obtain the information in (4)(d) shall require a majority of the full Board (or a delegated committee thereof) to certify in writing the specific reasons why obtaining and analyzing the information in (4)(d) would be detrimental to the best interests of the Bank. A copy of the Board certification shall be maintained in the credit file of the affected borrower(s). The certific...
Credit Risk Management. (1) The Board shall immediately direct the Oversight Committee to complete within ninety (90) days an evaluation of credit risk management personnel, policies, processes, and control functions. At a minimum, this evaluation shall assess the adequacy of:
(a) the number of employees, and staffing requirements regarding the experience, skills and capabilities of employees; (b) management information systems and recommendations for improvements or enhancements to existing systems; (c) credit risk policies, processes and recommendations for revisions; and (d) control functions and internal audit coverage consistent with Articles XIII and XIV of this Agreement.
(2) Effective immediately, the Board shall ensure credit risk management maintains a disciplined test and control environment for new account acquisition, account management, and collection strategies. Within thirty (30) days, the Board shall adopt a policy that, at a minimum, establishes:
(a) general guidelines for required test duration of new strategies; (b) limitations on the individual and aggregate volume of tests that can impact credit quality, and that can be run on any particular portfolio at one time (e.g., credit criteria, pricing, etc.); (c) a requirement that test objectives, success measurement matrices, and management information systems be documented and fully operational prior to testing new strategies; and (d) Credit Policy Committee or Board approval is obtained prior to the launch of successful test strategies on larger segments of the portfolio.
(3) Immediately upon adoption and prior to implementation, the Board shall submit a copy of the policy to the Director for review. Within thirty (30) days of the Director's receipt of such policy, the policy shall be implemented.
(4) The Board shall immediately instruct management to complete within ninety (90) days a comprehensive evaluation of issues that impact borrowers' ability to make progress on reducing debt and possible causes for negative amortization. At a minimum, the review shall evaluate the:
(a) adequacy of minimum payment requirements, based on interest rates and fees the Bank charges; (b) process of handling overlimit balances and assessing overlimit fees; and (c) assessment of enhancement product fees on delinquent accounts.
(5) Within thirty (30) days from the completion of the evaluations required by paragraphs one (1) and four (4), the Board shall adopt a written action plan detailing (i) the Board's strategy for resolving...
