Prepare a summary memorandum to the LPM examiner or EIC regarding the quantity and direction of credit risk, and the adequacy of the risk management for the agricultural loan portfolio. Consider:

• Appropriateness of strategic and business plans for agricultural lending.

• Adequacy of policies and underwriting standards.

• Volume and severity of classified loans.

• Volume and severity of underwriting and policy exceptions.

• Concentrations of credit.

• Accuracy and timeliness of agricultural MIS.

• Compliance with applicable laws, rules, and regulations.

• Adequacy of agricultural loan control functions.

• Recommended corrective action regarding deficient policies, procedures, practices, or other concerns and commitments obtained from management.

• The extent to which agricultural credit risk and credit risk management practices affect aggregate loan portfolio risk.

Recommend risk assessments for the agricultural portfolio for the following applicable risks. Refer to the “Community Bank Supervision” and “Large Bank Supervision” booklets for guidance.

For Large Banks Only:

• Quantity of Risk: High, Moderate, Low

• Risk Management: Strong, Satisfactory, Weak

For All Banks:

• Risk Direction: Increasing, Stable, Decreasing

• Aggregate Risk: High, Moderate, Low

Discuss examination findings and conclusions with the EIC. If necessary, compose “Matters Requiring Board Attention” (MRBA) for the report of examination (ROE).

• MRBAs should cover practices that:

  • Deviate from sound, fundamental principles and are likely to result in financial deterioration if not addressed.

  • Result in substantive noncompliance with laws.

MRBAs should discuss:

• Causative factors contributing to the problem.

• Consequences of inaction.

• Management’s commitment for corrective action.

• The time frame and individual responsible for corrective action.

Based on discussions with the EIC, bank management, and information contained in the summary memorandum, prepare a brief agricultural lending comment for inclusion in the ROE.

Discuss findings with bank management, including conclusions about risks. If necessary, obtain commitments for corrective action.

Provide any necessary information to the LPM examiner to update the supervisory record and any applicable report of examination schedules or tables.

Prepare a memorandum with recommendations for future examinations.

Update the agricultural lending examination work papers in accordance with OCC guidance.