Robin Trehan- Due Diligence of a small community bank
1. Review the past three year regulatory examinations, safety and soundness as well
as an information technology and compliance examinations.
2. Review Board of Directors minutes of meetings.
3. Review the general ledger for any unusual balances.
4. Review any independent attestation work performed, i.e. audit, directors'
examination, loan review, internal audit or other types of work performed by CPA
firms or other consulting firms.
5. Review the tax returns..
6. Obtain loan and deposit trial balances.
7. Obtain the past due loan listing, and the current listing.
Review past due loans on the listing.
Review the all report.
Select a sample of 5 loans, including high dollar loans, past due, watch list and
classified loans for review. Look for perfection of liens, credit quality,
value of collateral and repayment ability of borrower.
10. Review calculation of ALLL methodology.
11. Review for deposits in excess of $100,000 and determine the length of time the
bank has held such deposits.
12. Review bank expenses for reasonableness.
13. Inquired as to interest rate risk exposure and review periodic reports to evaluate
14. Review the investment portfolio. Determine if management has evaluated for
other than temporary impairment.
15. Discuss with management the overall condition of the Bank and obtain
information about the local economy.