BEST PRACTICES IN BANK INTEGRATIONS –
ALL THINGS APPRAISAL: TIPS & TRICKS
AUGUST 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
WHERE DO YOU START?
READY…..SET…..WAIT FOR IT….GO!
• Appraisal Departments
• Approved Appraiser List(s) Mgmt
• Credit Administration
• Other 3rd-Party Vendor Mgmt
• Business Units
– AMCs
– Environmental Consultants
– Building Inspectors/ Engineers
– PP/ Equipment Appraisers
DOES
SIZE MATTER?
PIT FALLS
PIT FALLS…
• 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
…& MORE PIT FALLS
• 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
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Mining operation
Agricultural properties
C-Stores
Country Clubs
POLICIES & PROCEDURES
• Who gets to stay?
– Combined?
– Are you really the devil?
• Who is your regulator now?
– Different wrinkles
– Different cycles
– Different expectations
PERSONNEL & CULTURES…
…PERSONNEL & CULTURES
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
VENDOR MANAGEMENT
• Approved Appraiser Lists
– Update and Add New Appraisers to Lists due to new terror
ties or markets
• 3rd-Party Reviewers
– Continue to use or eliminate
• Environmental Consultants
– Incorporate additional environmental contractors to list
VENDOR MANAGEMENT
• 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
APPRAISAL MANAGEMENT SYSTEMS
APPRAISAL MANAGEMENT SYSTEMS
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RIMS
YouConnect (Real Wired)
Oasis (Global DMS)
Lender Portal (EDR)
FNC’s system
– Commercial, Residential and Environmental CMS
system
• Others
APPRAISAL MANAGEMENT SYSTEMS
• Platform Integrations
– Pre/Post – Identify challenges
• Key points to consider:
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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?
OTHER ISSUES
– 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
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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)