Message from the CEO: Building Blocks of Portfolio Management

We marked our 17th year of doing business in August. At Suntell, we have an average tenure of 9 years of service among our current employees. We take great pride in our employees and the contributions they have made and the loyalty they have provided to Suntell. This loyalty and length of service has resulted in knowledgeable sales and service staff to better serve your needs and has been an important factor in our company surviving and prospering over the course of the past 17 years.

We have always taken great pride in being a ‘different’ kind of company in how we treat our employees and you, our customer. We feel we can run circles around our larger competitors in all phases of cost, service and product by being true to our core philosophy and focus on commercial and agricultural credit and document workflow for community financial institutions. We have not been perfect over those 17 years, as we felt the pull to diversify and extend our product set, as well as the natural desire to grow and get bigger. As the old cliché goes: it’s not the destination, but the journey that is important.

It has been quite a journey for Suntell and we look forward to continuing that journey with each of you over the years to come. Sometimes it’s helpful for all of us to continually remind ourselves of the building blocks for which we developed the Square 1 Credit Suite. Those building blocks for Square 1 Credit Suite are also the basic building blocks each financial institution should address when evaluating the loan policy and procedures, credit administration and loan operations areas of your institution.

Those five basic building blocks of commercial loan portfolio management that provided the foundation for which we developed the Square 1 Credit Suite:

  1. Risk identification. Given the lessons learned in the recent recession and credit crisis, this piece is vital. Accurately determining credit risk at the borrower or loan level using a comprehensive approach that is reviewed on a regular basis is essential.
  2. Documentation and policy exception management. Don’t allow gaps in the loan documentation or large numbers of atypical loans prevent enforcing the terms of its loans. Put policies in place to rapidly address missing paperwork and minimize exceptions to the rules.
  3. Concentration of risk. Install procedures to identify loan concentrations with one borrower or group of borrowers, industry concentrations and concentrations by loan types such as commercial and industry, real estate, and consumer loans. If loan policy specifies or allows such concentrations, put additional procedures into place to identify and mitigate the risk.
  4. Collections and work-outs. Identify problems loans early on and work out solutions with the borrower early in order to save the loan. A foreclosure benefits neither party.
  5. Credit management systems. A comprehensive credit management system should be able to analyze and underwrite, risk rate, handle loan approval communication, track document and policy exceptions and manage collections. In addition, a well-designed system will provide the necessary reporting to provide management and the board the information required to understand credit and loan portfolio risk and trends.

Thank you for your business and loyal support.

Duane Lankard

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