Survey Reveals Examiners Focusing on Asset Quality Issues
New survey results from financial information company Sageworks revealed that federal bank and credit union examiners have focused largely on asset quality during exams.
Three quarters of respondents to the Sageworks Bank & Credit Union Examination Survey named asset quality as an area of focus by examiners from the NCUA, FDIC, Office of the Comptroller of the Currency and the Federal Reserve during their most recent exams, according to the Raleigh, N.C.-based firm.
Asset-quality issues under scrutiny by examiners included risk-rating systems, higher delinquency rates and non-performing loans, loan reviews that were inconsistent or not completed annually, and quality issues related to growth, the economy or continued real estate devaluation, the survey said.
More than a quarter of respondents said examiners focused most on capital adequacy, while roughly one in five said examiners focused on market risk. Less frequently mentioned were liquidity, earnings and management. Respondents were allowed to identify more than one area of examiners’ focus.
Representatives from 165 financial institutions participated in the online survey, conducted between May 17 and June 13. Poll respondents, who were not randomly selected, included Sageworks clients, members of the ALLL Forum for Bankers LinkedIn Group and recipients of Sageworks newsletters. Ten percent of respondents were credit unions, the firm said.
The complete results of the survey are available from Sageworks online.