B EST P RACTICES IN B ANK I NTEGRATIONS – A LL T HINGS A PPRAISAL : T IPS & T RICKS A UGUST 6, 2014
What you are about to experience are the views of these three individuals…
Deloris L. Kraft-Longoria, MAI Chief Appraiser, Frost Bank (San Antonio, TX ) Eric K. Schwartz, MAI, SRA SVP, Chief Appraiser, Amegy Bank (Houston, TX ) Justin D. Slack, MAI, SRA, AI-GRS, AI-RRS VP, Commercial Appraisal Mgr, HomeStreet Bank (Seattle, WA)
Where do you Start? Does size matter? Policy(s) & Procedures Personnel & Cultures Vendor Lists Systems
R EADY …..S ET ….. WAIT FOR IT ….G O ! Appraisal Departments Credit Administration Business Units Approved Appraiser List(s) Mgmt Other 3 rd -Party Vendor Mgmt – AMCs – Environmental Consultants – Building Inspectors/ Engineers – PP/ Equipment Appraisers
P IT F ALLS … Not being included in Due Diligence team Not being a part of merger team and/or included in meetings prior to merger Lack of list of appraisal assignments in the works – Who is the Client after LD-1? – Who is the Intended User after LD-1? Appraisal Coordinator or Personnel left after merger Acquired Bank had no Appraisal Division or Collateral Management System (CMS) Lack of written policies to train acquired bank personnel – To use CMS system – When & how to order an Appraisal
…& M ORE P IT F ALLS Incorporating Ordered Appraisal Assignments into CMS – Setting up files, gathering all data Payment of AMC/Appraiser of Appraisal Assignments in the works – Dual payment Lack of market knowledge in new footprint Lack of sufficient personnel to handle the “new normal” (workload) Specialized Property Types – Mining operation – Agricultural properties – C-Stores – Country Clubs
P OLICIES & P ROCEDURES Who gets to stay? – Combined? – Are you really the devil? Who is your regulator now? – Different wrinkles – Different cycles – Different expectations
…P ERSONNEL & C ULTURES Bank A Chief Appraiser (Certified Appraiser) Review Appraisers (2) Department Admin. Bank B Appraisal Dept. Administrator (non-certified Manager) Review Appraisers (3) Environmental Consultant Evaluator
V ENDOR M ANAGEMENT Approved Appraiser Lists – Update and Add New Appraisers to Lists due to new terror ties or markets 3 rd -Party Reviewers – Continue to use or eliminate Environmental Consultants – Incorporate additional environmental contractors to list
V ENDOR M ANAGEMENT Building Inspectors/ Engineers Order Management Systems Appraisal Management Company(s) – Coordinate with AMC’s in regards to open assignments Complete reviews, payment of the appraiser Cloud Storage
RIMS YouConnect (Real Wired) Oasis (Global DMS) Lender Portal (EDR) FNC’s system – Commercial, Residential and Environmental CMS system Others
A PPRAISAL M ANAGEMENT S YSTEMS Platform Integrations – Pre/Post – Identify challenges Key points to consider: – Administrative and support personnel needs assessment – Budgetary constraints – Integrating systems with differing cost allocations – Line reporting conflicts – Cultural conflicts!!!!! – Understand the weaknesses and strengths of each AMS – SWOT Analysis: Do you need to perform one? – Single or multi-platform process management Different systems for commercial and residential?
O THER I SSUES – USPAP Issues – Who is the client and intended user if the acquired entity no longer exists? – Are there additional expense burdens associated with: AMC Audits Manpower allocations Duplication of review and support staffing – Retain performing vendors – Annually evaluate vendors (establish protocols if absent) – In-service training – may be necessary at both institutions – Establishing performance expectations – Valuing designations (cultural issue)
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