Bankers Want More Protection During Their Exams
What does every banker dread? Both their external exam by their hired third party Certified Public Accounting Firm and their annual Federal Exam, whether from the FDIC or Office of Thrift and Supervision (OTS).
In the banking market today it is more important than ever to substantiate values you are placing on your collateral. Assets such as Equipment, Inventory and Account Receivables are coming under increased pressure from examiners to carry a demonstration that the value assigned during a loan to value analysis is in line with industry standards.
A decade ago simple depreciation schedules and balance sheets were enough to satisfy the examiners. But in today’s market, more and more banks and financial institutions are relying on a Certified Equipment Appraisal and Inventory Analysis to confirm values stated by the borrower’s balance sheet.
The staff at Truman Mox has seen the need of Certified Equipment Appraisals in today’s market being utilized in two aspects. First in the aspect of loan origination, establishing a reliable LTV (Loan to Value) with a Certified Equipment Appraisal is essential when defending your initial loan decisions to federal examiners or your external bank examiner. Secondly, knowing your collateral’s value during the loan term has become another important factor. Portfolio Managers and Loan Officers are ordering increasingly more Certified Equipment Appraisals for their client’s collateral to meet annual covenant requirements that are being placed in more loan agreements. Your External Examiner and Federal Examiners are less likely to downgrade a loan relationship when they are able to see the value for collateral established by a Certified Equipment Appraisal from Truman Mox.July 17, 2012 12:00 am