Regulatory Capital Management

Close management of regulatory capital levels has never been of greater importance, as bank regulators mandate ever higher reserves and charge-offs while simultaneously increasing minimum leverage ratios for banks coping with legacy risk asset issues.

We prepare our bank clients for regulatory examination and also assist them in direct negotiations with bank regulatory authorities on asset quality issues. Through superior analytics and tireless advocacy for every dollar of our client’s regulatory capital, we have an unrivaled track record of tens of millions of dollars in regulatory capital saved. By managing to the best possible regulatory capital outcome, we buy our clients time to work out their loan and REO problems and strengthen their hand for critically important negotiations with regulators and potential capital investors. 

Our specific analytical offerings include:

  • Watchlist Asset Review or WAR Memoranda: Provide a comprehensive analysis of each credit within a watch listed loan portfolio in our proprietary WAR format, which delivers:
    • A full articulation of all credit risk, loan workout, legal and collateral issues.
    • Clear and defensible recommendations on risk rating and accrual status.
    • Clear and defensible recommendations on FAS 114 specific reserve and charge-off levels.
    • Clear and defensible recommendations on loan workout strategy.
    • A critical examination of real estate appraisal methodology and execution.
  • Watchlist Loan Portfolio Collateral Position Summary Report: Provides a detailed snapshot of watchlist loan portfolio collateral coverage, derived from our WAR Memoranda through a proprietary macro interface, that delivers a concise summary of the regulatory capital impact of a bank client’s legacy risk loan assets.
  • REO Advisory Memoranda:  Produced by our veteran consultants in the areas of distressed residential and commercial real estate development, brokerage and appraisal, our REO advisory memoranda deliver:
    • Clear recommendations on REO management, repositioning and disposition strategy.
    • Cost to complete estimates and build/hold analyses on incomplete development projects.
    • A critical examination of real estate appraisal methodology and execution.