 
|
News | The Best Defense is a Good Offense January, 2011 Recovery Ahead - News from Crossroads Credit & Portfolio Management LLC The Best Defense is a Good OffenseAs we begin 2011 and as I reflect on the past year, the one thing that continues to ring clearly for our clients is the need to go on the offensive. We are Community Bankers helping Community Bankers. As all banks, but particularly Community Banks, attempt to deal with their problem assets, we so often observe how they have become defensive in their approach to their problems and in preserving their capital. Although we understand this approach, we must remember that the winning teams may start with defense, but without an offense we will never be successful. Banks have all the tools to be on the offensive right at their finger tips. It's called internal loan review. It has been our experience that the banks with an aggressive internal loan review program identify problems credits much faster than their peers that rely exclusively on annual external loan reviews. A continuous loan review program identifies problems and immediately turns them over to the Special Assets department to handle. The quicker a problem is identified the quicker it can be resolved, or the banks loss potential mitigated. As a former CCO myself, I always hated hearing about credit down grades from my independent loan review team or the regulators. A bank's inability to provide proof of risk grade migration only lends itself to a much deeper review of the banks credits and ultimately opens the bank to potential criticism. Let's face it, If we have problems and losses identified early enough we may chose to cut our losses and look to other strategic alternatives such as loan swaps, asset liquidations or bulk note sells. If your organization is interested in going on the offensive but needs a little coaching on how to set up the program, give Crossroads Credit and Portfolio Management a call today. We are Community Bankers helping Community Bankers. Richard D. Burleson - Managing Director |
 |  |
