Loan Review Program Design Workshop

Loan Review Program Design Workshop

Workshop Overview

This comprehensive 60-minute workshop provides in-depth guidance on designing, implementing, and maintaining an effective loan review program that meets regulatory expectations while adding real value to your credit risk management.

Perfect for institutions establishing new loan review functions or enhancing existing programs, this workshop covers everything from organizational structure and independence to advanced sampling methodologies and meaningful reporting.

What You'll Learn

Program Foundation and Governance

• Organizational independence requirements and models
• Policy and procedure development
• Roles, responsibilities, and qualifications
• Budget and resource planning
• Technology and tools selection

Risk Rating System Design

• Pass/Fail rating scale development
• Criticized asset classifications
• Rating criteria and definitions
• Consistency and calibration
• Regulatory alignment (Special Mention, Substandard, Doubtful, Loss)

Sampling Methodologies Deep-Dive

1. Proportional (Dollar-Based) Sampling

   • When to use this approach
   • Sample size determination
   • Stratification strategies
   • Statistical validity considerations
   • Practical examples

2. Numerical (Count-Based) Sampling

   • Appropriate use cases
   • Random selection techniques
   • Error frequency assessment
   • Consumer portfolio application

3. Risk-Based Sampling (Recommended)

   • Tiered sampling framework
   • 100% review categories
   • Targeted review percentages
   • Statistical sample components
   • Portfolio coverage optimization

Sample Selection Process

• Avoiding management influence on selection
• Random number generation techniques
• Stratification by size, product, risk rating
• Sample expansion triggers and methodology
• Quarterly vs. annual sampling strategies

Review Execution Excellence

• Credit file documentation review
• Financial statement analysis
• Collateral evaluation procedures
• Cash flow and debt service assessment
• Risk rating validation methodology
• Downgrade criteria and documentation

Effective Reporting

• Executive summary best practices
• Board-level reporting requirements
• Management detailed reporting
• Trend analysis and visualization
• Peer benchmarking integration
• Issue tracking and remediation reporting

Real-World Program Examples

Small Community Bank (under $500M)

• Internal audit-led loan review
• Semi-annual comprehensive reviews
• Risk-based sampling approach
• External validation annually
• Board reporting framework

Mid-Size Regional Bank ($1B-$5B)

• Independent loan review department
• Quarterly rotating portfolio reviews
• Sophisticated risk-based sampling
• Continuous monitoring component
• Monthly management reporting

Large Institution (greater than $5B)

• Dedicated loan review function
• Continuous review process
• Advanced analytics integration
• Real-time risk rating validation
• Comprehensive reporting infrastructure

Common Regulatory Findings

Based on FDIC and state examination trends:

Top 5 Deficiencies:

1. Lack of Independence (35% of findings)

   • Reporting to Chief Lending Officer
   • Reviewers with lending responsibilities
   • Management influence on sample selection

2. Inadequate Sampling (30% of findings)

   • Arbitrary sample selection
   • Insufficient sample sizes
   • No statistical basis
   • Management-selected samples

3. Inconsistent Risk Ratings (25% of findings)

   • Vague rating criteria
   • Inconsistent application
   • Lack of reviewer calibration
   • Insufficient documentation

4. Poor Documentation (20% of findings)

   • Incomplete work papers
   • Missing rating rationale
   • Inadequate finding support
   • No trend analysis

5. Weak Follow-Up (15% of findings)

   • No issue tracking
   • Delayed remediation
   • Lack of accountability
   • Insufficient management response

How to Avoid These Findings: Detailed strategies for each deficiency covered in workshop

Practical Tools and Templates

Sample Selection Tools:

• Risk-based sampling calculator
• Random number generator guide
• Stratification templates
• Sample expansion decision matrix

Review Documentation:

• Standardized review templates
• Risk rating worksheets
• Finding documentation forms
• Quality control checklists

Reporting Templates:

• Board report format
• Management detailed report
• Trend analysis dashboards
• Issue tracking log

Who Should Attend

Essential For:

• Chief Credit Officers
• Loan Review Managers
• Credit Risk Officers
• Credit Administration Leaders
• Internal Audit Managers

Also Valuable For:

• Chief Risk Officers
• Chief Lending Officers
• Board Risk Committee Members
• External Auditors
• Regulatory Relations Officers

Key Takeaways

Participants will be able to:

Design organizationally independent loan review structure Develop comprehensive risk-based sampling methodology Implement statistically valid sample selection process Conduct thorough credit file and risk rating reviews Create meaningful reports for board and management Establish effective issue tracking and remediation Prepare for regulatory examinations Measure and demonstrate program effectiveness

Workshop Structure

Part 1: Foundation and Structure (15 minutes)

• Independence models and organizational structure
• Policy and procedure framework
• Reviewer qualifications and training
• Technology and resource planning

Part 2: Sampling Methodology (20 minutes)

• Statistical sampling principles
• Proportional vs. numerical approaches
• Risk-based sampling framework design
• Sample selection process and documentation
• Sample expansion methodology

Part 3: Review Execution (15 minutes)

• Credit file review procedures
• Financial and collateral analysis
• Risk rating validation process
• Finding documentation standards
• Quality control procedures

Part 4: Reporting and Governance (10 minutes)

• Report structure and content
• Board vs. management reporting
• Trend analysis and benchmarking
• Issue tracking and remediation
• Regulatory examination preparation

Case Study Walkthrough

Scenario: Mid-size bank ($2B assets) receives FDIC finding on deficient loan review sampling methodology.

Workshop Covers:

• Analysis of the finding
• Root cause identification
• Remediation plan development
• Enhanced sampling methodology
• Documentation improvements
• Regulatory response strategy
• Implementation timeline
• Validation of remediation

Participants see complete remediation journey from finding to closure.

Regulatory References

Workshop references key guidance:

• FDIC Risk Management Manual - Loan Portfolio Review
• OCC Loan Review Examination Procedures
• Federal Reserve SR 14-4 (Examiner Loan Sampling)
• State banking department requirements
• Interagency policy statements

Materials Included

Participants receive comprehensive toolkit:

• Workshop slides (PDF)
• Loan Review Policy Template
• Risk-Based Sampling Framework
• Sample Selection Calculator (Excel)
• Review Documentation Templates
• Report Templates (Board & Management)
• Issue Tracking Log Template
• Regulatory Guidance Compendium
• Best Practice Checklist

Interactive Elements

While this is a recorded presentation, it includes:

• Live sampling calculations demonstrated
• Sample report walkthroughs
• Finding documentation examples
• Before/after policy comparisons
• Real examination finding discussions

Why This Matters Now

Regulatory Environment:

• Increased examination focus on loan review adequacy
• More granular sampling methodology review
• Heightened independence expectations
• Enhanced documentation standards

Credit Quality Concerns:

• CRE portfolio challenges
• Interest rate risk impacts
• Economic uncertainty
• Need for early problem loan identification

Resource Constraints:

• Limited qualified loan review staff
• Budget pressures
• Efficiency requirements
• Technology investment decisions

Presenter Expertise

Led by RegVizion's Credit Risk Practice, bringing:

• Former bank examiners (FDIC, state, Fed)
• Loan review program design experts
• Sampling methodology specialists
• Credit risk management veterans
• Regulatory remediation experience

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Request Access to This Workshop

Duration: 60 minutes Format: Recorded workshop with templates and tools Delivery: Secure streaming link + materials via email within 24 hours Cost: Complimentary for financial institutions

To request access, complete the form below or contact us directly.

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Related Resources

• Complete Guide: Building an Effective Loan Review Program
• CECL Model Validation Checklist
• Q1 2025 Banking Outlook: Credit Quality Focus

Next Steps

After completing this workshop, consider:

• Scheduling a loan review program assessment
• Developing custom sampling methodology
• Conducting loan review training for your team
• Engaging external validation of your program

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Need help enhancing your loan review program? RegVizion provides comprehensive loan review design, sampling methodology development, and regulatory remediation services. Contact us for a complimentary program assessment.