Pub. 10 2019 Issue 1

www.wvbankers.org 24 West Virginia Banker ADVERTISING in your association’s trade journal is a solid approach to business development. Business publications are rated the first choice for staying in touch with what’s going on in their sector by 61% of decision makers. 83% of managers would recommend to people starting a career in their sector to read the business publications. A recent Nielsen Catalina study shows an average ROI of $7.81 for every $1.00 spent on print ads. Almost half of those surveyed preferred to look at an ad in print, and only 1 in 10 preferred to see that same ad in a digital version. And no one wanted to see it in an app. Print is tangible, it’s engaging, it’s readable, but most of all… it works! Kris@thenewslinkgroup.com thenewslinkgroup.com | (v)727.475.9827 loans. A focus on loan policy exceptions, covenant exceptions, and pricing exceptions is evident throughout survey results. Examiners are also spending a significant amount of time reviewing loan terms, often questioning the reasonableness of non-recourse loans and interest only loans. Cash-out refinanc- ing remains a “hot button” with examiners. Speculative con- struction lending is under intense review. Loan stress testing is critical both at underwriting and for an ongoing assessment of overall portfolio credit risk. Complete analysis of loan portfolio concentrations is critical and should be analyzed at both the industry and product level. Documentation is critical. Recommendation #9: Banks should review their loan policy to ensure it covers all lending segments and establishes ap- propriate risk parameters. For example, if a bank is underwrit- ing speculative residential construction then the loan policy should identify meaningful parameters, risk thresholds such as concentration limits to one builder, etc. Recommendation #10: Banks must document all loan poli- cy exceptions and covenant/pricing exceptions and report to the Board at least quarterly. Board minutes should compre- hensively document such discussions. Recommendation #11: Banks should identify and doc- ument “leading indicators” of asset quality concern. As previously mentioned, such indicators could include policy or covenant exceptions. Recommendation #12: Examiners want to see identified and tested “exit strategies” for loan concentration buckets. In other words, how will banks predict when the music stops and how effective can the banks execute on the strategic shift.  Scott Polakoff, Executive Vice President FinPro, Inc. 908-234-9398  Bank Exam Monitor Continued from Page 23