Large Bank Supervision Forum 2023

Portfolio Management Minimum Components

 Quarterly borrower performance review (vs plan)  Quarterly review of risk grades  Quarterly ALLL assessment  Quarterly enterprise valuation update  Quarterly reporting: Exec Mgt, BOD, Regulators  Annual portfolio review  Annual independent loan review  Ongoing borrower news review  Bank should have a separate weak/problem credit process

For financial professional or qualified institutional investor use only. Not for inspection by, distribution or quotation to the general public.

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Underwriting Standards

 Repayment Capacity • Free Cash Flow Calculation and Justification • Debt Leverage Levels (Senior and Total)

 Transaction Structure (Jr Debt, Cov Lite, Greenshoe, R/C, TLA, TLB)  Diversification: Individual Borrower and Industry Concentrations  Enterprise Valuation  Problem Credits: Flags and Procedures  Use of Third Parties  Documenting the Analysis – The Credit File, Approval Documents and Written Analyses

For financial professional or qualified institutional investor use only. Not for inspection by, distribution or quotation to the general public.

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