Loan Management

In: Business and Management

Submitted By Tindo
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A-LPM

Comptroller of the Currency Administrator of National Banks

Loan Portfolio Management
Comptroller’s Handbook
April 1998

A
Assets

Loan Portfolio Management

Table of Contents
1 1 3 11 13 13 14 15 15 17 19 20 22 22 22 24 24 25 26 27 27 28 29 30 32 33 34 36 36 37 37 38 38

Introduction Overview Risks Associated with Lending Credit Culture and Risk Profile Loan Portfolio Objectives Strategic Planning for the Loan Portfolio Financial Goals Risk Tolerance Portfolio Risk and Reward The Loan Policy Loan Policy Topics Loan Approval Process Portfolio Management Oversight Risk Identification Exceptions to Policy, Procedures, and Underwriting Guidelines Documentation Exceptions Policy and Underwriting Exceptions Aggregate Exception Tracking and Reporting Portfolio Segmentation and Risk Diversification Identifying Concentrations of Risk Evaluating and Managing Concentrations of Risk Concentration Management Techniques Stress Testing Allowance for Loan and Lease Losses Credit Management Information Systems Collections and Work-out Lending Control Functions Independence Credit Policy Administration Loan Review Audit Administrative and Documentation Controls

Comptroller’s Handbook

i

Loan Portfolio Management

Communication with Senior Management and the Board Loan Portfolio Management Supervision Asset Quality Reviews Targeted Reviews Process Reviews Administrative and Documentation Reviews Compliance Reviews Follow-up Evaluations on Management Commitments Ongoing Supervision Examination Procedures General Procedures Quantity of Risk Quality of Risk Management Conclusion Procedures Appendixes A. Topics of Loan Policy B. 12 CFR 30 — Safety and Soundness Standards C. Portfolio Credit Risk Management Processes D Loan Production Offices E. Loan Participations F. Loan Brokerage and Servicing Activities G. IRS Express Determination Letters References…...

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