Large Bank Examination Workshop February 2026

a. Recommendation: The Bank should formally document the existing reconciliation

process comparing Synergy line-item data to Silverlake line-item data. This process

should include a variance tolerance threshold for acceptable variances between the

two data sources (this is commonly established at zero but this is not a requirement).

The results of the reconciliation and any material variances and their resolution should

be documented for each Model forecast period.

b. Management Response : As a matter of course I review and compare the financials

from Synergy to Silverlake and make sure to download FHLB advance details if any are

outstanding each month, but these steps have not been formally documented. Going

forward, I plan to include the co mpleted checklist with each month’s data files to

ensure nothing is missed and there’s a record of completion of each step.

2. (Low Risk) – For the Bank's construction and commercial real estate loan portfolio, The

Model is using the Bank's actual customer prepayment history to determine projected

prepayment assumptions. This static analysis, while accurate on an average basis over a

complete rate cycle, does not account for the dynamic changes in prepayment speed

behaviors as market rates and external non-financial influences change. This historical

analysis is largely informed by the decade long “lower for longer” Fed rate policy which

resulted in interest rates being held near the zero boundary. The unprecedented rate

increases experien ced over the past year associated with the Federal Reserve’s Open Market

Committee increases in the Fed funds rate and asset sales related to its Quantitative

Tightening (QT) policy suggests that CRE prepay speeds based on recent history may be

materially inaccurate, and prepayment speed assumptions that more directly reflect current

market conditions are warranted to produce reasonably accurate projections.

a. Recommendation: The Bank should pursue a more dynamic approach to modeling

construction and CRE prepay speeds that accounts for the unprecedented macro

economic events that are currently impacting market rates and borrower behaviors.

b. Management Response : Management intends to work with The Model to refine the

prepayment assumptions for construction and CRE loans. Also, stress tests or

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