Ardmore can help if your bank is considering an acquisition, merger of equals, or sale.
We have years of experience with bank mergers ranging in size from small community banks to multi-billion-dollar institutions. Our due diligence process includes an overall credit management analysis of the portfolios with recommendations on specific borrower marks to market.
Identification of any potential gaps and weaknesses in the credit process and management of specific borrower relationships.
Asset Quality Reporting
Overall asset quality, including any concentration risk, is measured and reported.
Credit Mark Analysis
Credit mark analysis is predicated on the probability of default and loss given default for the target portfolio and individual borrowers.
Ardmore is available to help when a bank is interested in evaluating its long-term vision, mission, values, goals, strategies, and tactics.
Our multi-step process helps boards establish a plan, initiate the means to implement it, and generate metrics to gauge its success.
We conduct interviews with board members, senior and executive management, and associates from different departments. Their responses are used to assess the bank’s current internal and external environments.
A SWOT (strengths, weaknesses, opportunities, and threats) analysis is prepared using the information gathered from interviews and other research.
A strategy with actionable steps, measurable goals, timelines, and established responsibilities is developed for each action jointly with the client bank.
Credit Risk Management Process Assessment
Ardmore provides Bank Management with an independent evaluation of underwriting, credit administration, and overall portfolio management of commercial, commercial real estate, and specialty lending including policies, processes, people, systems, and procedures.
This evaluation provides an overall review of the Credit Risk Management (CRM) program in the context of best practices and regulatory expectations.
We assess and make recommendations for workflow, lending function structures, technology systems, and the 1st, 2nd, and 3rd lines of defense.
Gap and Weakness Identification
Gaps and weaknesses in the credit risk management process (CRM-identification, monitoring, measurement, control, and reporting) are detected and recommendations for improvement are made.
Regulatory Matters Requiring Attention (MRAs) or Written Agreements
In its over 30-year history, Ardmore has performed numerous consulting projects required by virtually every federal and many state banking regulators.
These projects include engagements for banks that have been criticized by regulators in their reports of examination, including consent orders and cease and desist orders. Ardmore works with client banks to address weaknesses noted by jointly developing a detailed plan of corrective action for the bank, its management, and its board.
Consulting and Training
Credit risk management consulting and board training is available for the bank.
Special Loan Review
Special loan review and evaluation of credit underwriting practices, lending processes, and staffing are available with an emphasis on problem credits.
An evaluation of the entire lending process, management, and board is performed and a strategic plan to address risks is put in place.
Outsourced Portfolio Stress Testing
Loan portfolio stress testing is a key exercise for all financial institutions to provide bank management and directors with valuable insight regarding potential risk exposure within various portfolio segments.
This process is a key part of proactive credit management practices and an important aspect of your institution’s overall credit/risk assessment process. Unlike individual loan stress testing, the results of portfolio stress testing are not intended to be a transactional analysis of the creditworthiness of individual loans. Instead, portfolio stress testing gives the credit professional a useful, directionally correct view of vulnerabilities in their portfolio under market stress.
Each stress test report includes a summary of concentrations analyzed, a summary of current economic conditions, an overview of the stress testing methodology utilized, a summary of results, and a list of recommended improvements.
Ardmore provides a collaborative process from the onset, including assistance with the creation of the loan data file, and produces a comprehensive report of findings that is board-ready.
The stress testing narrative report includes specific recommendations and suggestions for actions the bank can take to address credit vulnerabilities.
Credit Policy Development or Revision
Bank credit policies have to reflect the current lending environment and need to support your bank’s strategy, goals, and mission.
Ardmore provides consulting services to banks on writing and maintaining credit policies that are consistent with safe and sound banking practices. Our professionals have decades of executive-level bank supervision and consulting experience. We have worked with every federal regulator and many state regulators in all facets of responsibility, giving us the experience and knowledge to provide your bank with the guidance and counsel needed to retool your credit policies.
Ardmore brings a banker’s perspective to every appraisal review since our consultants have real estate lending and policy experience, and therefore understand best practices and regulatory requirements for commercial real estate appraisals.
Interagency Appraisal and Evaluation Guidelines
The guidelines state that individuals performing appraisal reviews must be independent of the loan transaction, insulated from influence by the loan production staff, and possess the requisite education and expertise to perform the review.
SBA Credit & Compliance Reviews
Ardmore provides bank management with an independent evaluation of the SBA underwriting.
This evaluation involves providing objective analysis, identifying gaps and weaknesses, evaluating the performance, indicating potential losses, and making recommendations for improvement.
Ardmore provides an objective analysis regarding the quality of your SBA loan portfolio, the adequacy of the administrative function, and the supervision of credit risk.
Gaps or weaknesses are identified in the SBA underwriting, funding, and servicing of the loans that are non-compliant with SBA regulations and could present a risk that the SBA will not honor its guarantee.
Evaluation & Recommendations
We evaluate the people, processes, and systems for adequacy in managing the existing portfolio and potential growth. Recommendations are then made for improving the staffing, policies, processes, and systems to enhance credit risk management for the SBA portfolio.
Specialty Portfolio Credit Reviews
Ardmore’s independent credit review assessment of a specialty portfolio provides an objective analysis regarding the quality of the lending function and assets, validates the risk rating system, assigns a risk rating on specific credits, and identifies structural weaknesses in underwriting, monitoring, measurement, and control.
Assurance that loans and leases are properly approved and funded compliant with the conditions of approval.
The lending administration is reviewed for adherence to established bank policies and procedures.
Actual and potential problem credits are identified on a timely basis and used to determine the adequacy of supervision.
Expert Witness Testimony
With lender liability-based claims ever-present, Ardmore Banking Advisors provides expert witness and litigation support consulting services to law firms needing experts with deep and relevant experience in financial and banking matters.
Ardmore only accepts expert engagements when we are confident that we can support the case based upon our independent review of the facts, and we have the expertise necessary to meet the requirements for the matter.
Our testimony is based on an independent understanding and evaluation of the facts of each case in light of industry standards and best practices.
Our knowledge is a product of decades of executive-level transactional and lending experience. Ardmore’s experts have structured, underwritten, negotiated, closed, administered, and worked out all types of complex financial transactions.
Ardmore can assist with problem loan processes and procedures.
We have many consultants with broad and deep hands-on and oversight workout experience. Assistance includes reviewing the methodologies used, developing and implementing new protocols, training workout staff, and providing counsel on interactions with borrowers and other constituencies.
Evaluation of Methodologies
We will review your compliance with the regulations and expectations of regulators and accountants to ensure that your loan management procedures can mitigate the financial impact of problem loans.
A review of your current Credit Risk Management Program to ensure asset quality includes documenting your problem asset strategy, actions, and adjustments as necessary to achieve maximum results.
Best Practice Recommendations
Our consultants will make recommendations for improvements based on industry best practices.
CECL Data Readiness Assessment & Expert Consulting
Transitioning to the new CECL standard is a challenge for banks of all sizes and requires extensive internal and external resources.
Decisions regarding methodologies, calculations, and projections must be made and the results tested. Just as importantly, the entire process must be fully documented for auditors and regulators. Ardmore can help you build and implement a roadmap to CECL data readiness and pinpoint roadblocks to success.
Ardmore uses a rapid scripted process that can quickly point out gaps in available data and sort out the “must-haves” from the “good-to-haves.” This allows our clients to prioritize portions of the CECL transition, saving time and resources.
We understand the options and alternatives that an institution must navigate and can help with evolving best practices.
While vendors and auditors can shed some light on the basic process, Ardmore’s seasoned CECL experts can help with more in-depth support and CECL data readiness consulting. Specific areas in which we can help are:
- Pre-implementation loan data readiness assessments
- Assistance with configuration options, methodology selections, and impact on Allowance for Credit Losses (ACL)
- Post-implementation documentation for auditors and examiners
- Comparison of your approach against emerging best practices
Credit Data Assessment
For nearly twenty years, Ardmore’s credit technology experts have assisted many banks in implementing and improving their credit data automation efforts.
We assist financial institutions in better understanding and enhancing their loan data flow from origination through reporting and analysis. The process involves reviewing existing loan portfolio data reports and materials and interviewing key bank stakeholders about credit risk management practices with a focus on perceived issues and effectiveness.
An assessment report draft will be delivered within two weeks and will address key issues, gaps, and areas for improvement. Also included, will be an assessment of the quality, consistency, and accuracy of credit data coding based on reports and material received. The final draft will include a milestone roadmap for recommended remediation and improvements.
The assessment process is non-disruptive and requires minimal bank resources and time to complete. Your day-to-day operations can proceed as usual during the assessment.
Regulators, auditors, and management alike appreciate when banks take a proactive approach to credit risk management. This assessment itself is evidence that your bank is attempting to get ahead of any potential issues or operational bottlenecks.