Financial Institution Advisory Services
CVA offers a variety of credit risk management services to its financial service clients including commercial banks ranging from community banks to large money center institutions and Systemically Important Financial Institutions; insurance companies; financial asset managers including those structured as Collateralized Loan Obligation owners; and, other credit providers. Provided services include valuations of loans, especially impaired loans according to US regulatory pronouncements, if applicable, and US Financial Accounting Standard guidelines (including FAS 114 and ASC 310), analysis of client’s internal risk rating process and procedures and monitoring of adherence to both the US Federal Reserve Bank and the Office of the Comptroller of the Currency loan valuations, and development and validation of Allowance for Loan and Lease Loss (“ALLL”) reserves.
CVA’s focused asset class is US domestic loans, both syndicated and bi-lateral, including retail / consumer, commercial and service obligors. Our primary asset valuation target is enterprise value-based loans, most-likely unsecured, for all types of obligors. The secondary type is Commercial and Industrial borrowers with collateral including operating plant and machinery, natural resources and intangible assets. The tertiary valuation type is Commercial Real Estate (“CRE”), including both owner occupied and non-owner occupied properties, and with a focus on industrial plant and equipment assets. Our final focus is general CRE on a selected basis. CVA’s targeted ideal loan size range is $5 – 500MM; however, CVA is flexible in addressing our clients’ specific needs and will consider smaller loans. CVA enjoys one of the valuation industry’s strongest track records in preparing valuations of intangible assets, including trademarks, patents, and other intangible rights, in order to develop and support loan valuation, possibly overlooked by the client.
We provide two of the approved loan valuation methods, i.e., Fair Market Value (“FMV”) of Collateral, the most widely used valuation method, and, Present Value (“PV”) of Future Obligor Cash Flows. Regarding the first method, the client’s realized value is represented by FMV that is reduced by any recognized asset liquidation costs such as broker fees, transfer taxes, legal fees, etc. The client’s assumptions under PV method are analyzed and benchmarked to our appropriate historical client base. CVA’s 25-year track record of business enterprise valuations, and machinery and equipment appraisals provide the base competency for FMV valuation. In addition, our financial modeling capabilities provides base competency for PV discounted cash flow analysis.