PROBLEM LOAN MANAGEMENT Clause Samples
PROBLEM LOAN MANAGEMENT. (1) Within thirty (30) days of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to a written plan to reduce the volume of problem assets by ensuring that management promptly addresses and intervenes, as appropriate, to resolve problem credit situations consistent with OCC Banking Circular 255.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development and implementation of policy guidance setting forth actions that management will take to strengthen or reduce problem loans, including, at a minimum, guidelines on the following:
(a) extensions or renewals of construction and development loans;
(b) the use of interest reserves after initial loan term;
(c) the curtailment or re-margining of outstanding loan balances upon renewal or extension; and
(d) the freezing of loan commitments on problem loans.
(3) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets listed in the Bank’s criticized loan list.
(4) Within thirty (30) days of establishing the plan required by Paragraph (1) of this Article, the Board shall prepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, a written program designed to reduce the Bank’s criticized assets (the “Problem Assets Program”). The Problem Assets Program shall include the development of policies and procedures to ensure that Problem Loan Memoranda (“PLM”) contain, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment and an analysis of their adequacy;
(b) the appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for positive borrower actions or for loan officers to reassess the strategy, enact collection plans, and make appropriate downgrades or place on nonaccrual;
(f) a determination of whether the loan is impaired and the amount of the impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Lo...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets criticized in the ▇▇▇, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the Comptroller's Examiners during any examination.
(2) Within ninety (90) days of this Agreement, the Board shall prepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, a written program designed to reduce the Bank's criticized assets (the "Problem Assets Plan"). The Problem Assets Plan shall include or address the following matters:
(a) aggregate reporting of criticized asset levels by type to the Board or a designated committee thereof every month;
(b) specific plans for the reduction of criticized assets by asset type with target reductions by month; and
(c) procedures for the monthly review and preparation of written determinations by the Board or a designated committee thereof regarding the effectiveness of the responsible officer's efforts to eliminate the weaknesses in each criticized credit relationship or Real Estate Owned ("REO") totaling two-hundred fifty thousand dollars ($250,000) or above (including any sold portion).
(3) The Board's compliance with Paragraph (2) of this Article shall include the development of procedures for the monthly submission and review of problem asset reports for all criticized credit relationships and REO totaling two-hundred fifty thousand dollars ($250,000) or above (including any sold portion), that require, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment;
(b) the current appraised value of supporting collateral and the position of the Bank's lien on such collateral where applicable, as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for borrower actions or for loan officers to reassess the strategy and enact collection plans;
(f) specific action plans and trigger dates for risk rating changes and documentation of the analysis and reasoning to support the current risk rating;
(g) for criticized relationships of two-hundred ...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets criticized in the ▇▇▇, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of procedures for the monthly submission and review of reports of all criticized credit relationships totaling $100,000 or above, that require, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment;
(b) the appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for positive borrower actions or for loan officers to reassess the strategy and enact collection plans; and
(f) for criticized relationships of $100,000 or above that were made for the purpose of constructing or developing CRE, the reports shall also include:
(i) the initial scheduled maturity date of the loan, number of extensions and/or renewals, and current maturity date;
(ii) project development status;
(iii) a comparison of development costs to the budgeted amount;
(iv) a comparison of sales activity to the original sales projections;
(v) current market conditions and activity;
(vi) amount of initial interest reserve and the amount of any subsequent additions to the reserve;
(vii) an assessment of the borrower’s global cash flow;
(viii) an assessment of the guarantor’s ability to support the project; and
(ix) any other significant information relating to the project.
(3) Effective as of the date of this Agreement, the Bank may not extend credit, directly or indirectly, including renewals, extensions or capitalization of accrued interest, to a borrower whose loans or other extensions of credit are criticized in the ▇▇▇, in any subsequent Report of Examination, in any internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination and whose aggregate loans or other ...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets criticized in the ▇▇▇, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of procedures for the monthly submission and review of problem asset reports for all criticized credit relationships totaling $100,000 or above, that require, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment and an analysis of their adequacy;
(b) the appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for positive borrower actions or for loan officers to reassess the strategy and enact collection plans; and
(f) a determination of whether the loan is impaired and the amount of the impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan.
(3) Effective as of the date of this Agreement, the Bank may not extend credit, directly or indirectly, including renewals, extensions or capitalization of accrued interest, to a borrower whose loans or other extensions of credit are criticized in the ▇▇▇, in any subsequent Report of Examination, in any internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination and whose aggregate loans or other extensions exceed $100,000, unless each of the following conditions is met:
(a) the Board or a designated committee thereof finds that the extension of additional credit is necessary to promote the best interests of the Bank and that prior to renewing, extending or capitalizing any additional credit, a majority of the Board or a designated committee thereof approves the credit extension and documents in writing, the reasons that such extension is necessary to promote the best interests of the Bank; and
(b) the Bo...
PROBLEM LOAN MANAGEMENT. (1) Within thirty (30) days of this Agreement, the Board shall submit the name and qualifications of the proposed individual pursuant to paragraph (2) of this Article to the Assistant Deputy Comptroller for a prior written determination of no objection.
(2) Within seven (7) days after receipt of a written determination of no objection from the Assistant Deputy Comptroller, the Board shall appoint an individual (“loan workout specialist”) charged with implementation and supervision of the formal written program, internal or external, who shall be independent and report directly to the Board, for the purpose of collecting or resolving classified assets, consistent with OCC Banking Circular 255, including CRE loans.
(3) Within sixty (60) days of this Agreement, the Board shall prepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, a written program designed to reduce the Bank’s classified assets (the “Problem Assets Program”). The Problem Assets Program shall include or address the following matters:
(a) aggregate reporting of classified asset levels by type to the Board or a designated committee thereof every month; and
(b) specific plans for the reduction of classified assets by asset type with target reductions by month.
(4) The Board’s compliance with Paragraph (3) of this Article shall include the development of procedures for the quarterly review and preparation of written determinations by the Board or a designated committee thereof regarding the effectiveness of the responsible officer’s efforts to eliminate the weaknesses in each criticized credit relationship or Other Real Estate (“ORE”) totaling one-hundred thousand dollars ($100,000) or more, and that require the preparation of Problem Asset Reports (“PARs” or “PAR”) that contain, at a minimum, analysis and documentation of the following:
(a) the origination data for each criticized asset, including date, amount, and purpose of the loan;
(b) an identification of the expected sources of repayment and an analysis of their adequacy;
(c) the appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(d) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(e) the proposed action to eliminate the basis of criticism and the time fr...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets criticized in the ▇▇▇, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of procedures for the monthly submission and review of problem asset reports for all criticized credit relationships and ORE totaling one hundred thousand dollars ($100,000) or above, that require, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment;
(b) the current appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for borrower actions or for loan officers to reassess the strategy and enact collection plans;
(f) specific action plans and trigger dates for risk rating changes and documentation of the analysis and reasoning to support the current risk rating;
(g) for criticized relationships of one hundred thousand dollars ($100,000) or above that were made for the purpose of constructing or developing commercial real estate, the reports shall also include:
(i) the initial scheduled maturity date of the loan, number of extensions and/or renewals, and current maturity date;
(ii) project development status;
(iii) a comparison of development costs to the budgeted amount;
(iv) a comparison of sales activity to the original sales projections;
(v) current market conditions and activity;
(vi) amount and source of initial interest reserve and the amount and source of any subsequent additions to the reserve;
(vii) an assessment of the borrower’s global cash flow;
(viii) an assessment of the guarantor’s ability to support the project;
(ix) any other significant information relating to the project; and
(h) a determination of whether the loan is impaired and the amount of the impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impai...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those assets criticized in the ▇▇▇, in any subsequent Report of Examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of procedures for the monthly submission and review of problem asset reports for all criticized credit relationships totaling two-hundred fifty thousand dollars ($250,000) or above, that require, at a minimum, analysis and documentation of the following:
(a) an identification of the expected sources of repayment and an analysis of their adequacy;
(b) the appraised value of supporting collateral and the position of the Bank’s lien on such collateral where applicable as well as other necessary documentation to support the collateral valuation;
(c) an analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) the proposed action to eliminate the basis of criticism and the time frame for its accomplishment;
(e) trigger dates for positive borrower actions or for loan officers to reassess the strategy and enact collection plans;
(f) a determination of whether the loan is impaired and the amount of the impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; and
PROBLEM LOAN MANAGEMENT.
(1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect its interest in those classified assets identified in the most recent examination of the Bank, in any subsequent examination, by internal or external loan review, or in any list provided to management by the National Bank Examiners during any examination.
(2) Within ninety (90) days of this Agreement, management shall prepare and submit to the Board for approval, a written program designed to reduce the Bank’s classified and special mention assets (the “Classified Assets Program”) to a safe and sound level over the next twelve
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect the Bank’s interest in those assets criticized in any Report of Examination (▇▇▇), management assessment, internal or external loan review, or in any list provided to management by the National Bank Examiners during an examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of Criticized Asset Reports (“CARs”) on all criticized credit relationships totaling $250,000 or more. CARs must be updated and submitted to the Board monthly. Each CAR shall cover an entire credit relationship, and include, at a minimum, analysis and documentation of the following:
(a) The origination data for each criticized asset, including date, amount, and purpose of the loan;
(b) An identification of the expected primary and secondary sources of repayment;
(c) Grade history of the loan (not just the current grade of the loan) and the historic reasons for the grade changes;
(d) The appraised value of supporting collateral and the position of the Bank’s lien on such collateral, where applicable, as well as other necessary documentation to support the collateral valuation;
(e) An analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(f) Cumulative information for significant developments, including a separate section and discussion of changes since the prior CAR, if any;
(g) The proposed action to eliminate the basis of criticism and the time frame for its accomplishment, including an appropriate exit strategy; and
(h) Trigger dates for upgrades and downgrades, including positive borrower actions or for loan officers to reassess the strategy and enact collection plans.
(3) The Board’s compliance with Paragraph (1) of this Article shall include the development of actions plans for each parcel of Other Real Estate Owned (“OREO”) to ensure that these assets are managed in accordance with 12 U.S.C. § 29 and 12 C.F.R. Part 34, Subpart E. Actions plans must be updated and submitted to the Board monthly, and, at a minimum, each action plan shall:
(a) Identify the Bank officer(s) responsible for managing and authorizing transactions relating to the OREO property;
(b) Contain an analysis of each OREO property which compares the cost to carry against the financial benefits of near term sale;
(c) Detail the marketing strategies for each parcel;
(d) Identify ta...
PROBLEM LOAN MANAGEMENT. (1) Effective as of the date of this Agreement, the Board shall take immediate and continuing action to protect the Bank’s interest in those assets criticized in any Report of Examination (▇▇▇), management assessment, internal or external loan review, or in any list provided to management by the National Bank Examiners during an examination.
(2) The Board’s compliance with Paragraph (1) of this Article shall include the development of problem asset reports on all criticized credit relationships totaling three hundred thousand dollars ($300,000) or above. Problem asset reports must be updated and submitted to the Board monthly and shall include, at a minimum, analysis and documentation of the following:
(a) An identification of the expected source of repayment;
(b) The appraised value of supporting collateral and the position of the Bank’s lien on such collateral, where applicable, as well as other necessary documentation to support the collateral valuation;
(c) An analysis of current and satisfactory credit information, including cash flow analysis where loans are to be repaid from operations;
(d) The proposed action to eliminate the basis of criticism and the time frame for its accomplishment; and
(e) Trigger dates for positive borrower actions or for loan officers to reassess the strategy and enact collection plans.
(3) The Board’s compliance with Paragraph (1) of this Article shall include the development of actions plans for each parcel of Other Real Estate Owned (“OREO”) to ensure that these assets are managed in accordance with 12 U.S.C. § 29 and 12 C.F.R. Part 34, Subpart E. Actions plans must be updated and submitted to the Board monthly, and, at a minimum, each action plan shall:
(a) Identify the Bank officer(s) responsible for managing and authorizing transactions relating to the OREO property;
(b) Contain an analysis of each OREO property which compares the cost to carry against the financial benefits of near term sale;
(c) Detail the marketing strategies for each parcel;
(d) Identify targeted time frames for disposing of each parcel of OREO;
(e) Establish targeted write-downs at defined periodic intervals if marketing strategies are unsuccessful;
(f) Establish procedures to require periodic market valuations of each property, and the methodology to be used; and
(g) Provide for reports to the Board on the status of OREO properties on at least a quarterly basis.
(4) Effective as of the date of this Agreement, the Bank may not extend credit, direc...