Credit Risk-Rating System

This publication provides a workable model for community banks to use in gauging the credit risk in their loan portfolios.

It sets forth a uniform framework and common language for assessing and monitoring risk in the credit portfolio. We took the best of the highly effective system developed by First Fidelity Bancorporation and modified it for application by banks of all sizes.

This book provides a risk-rating model that is truly generic. It defines a common language that a bank can adapt to its own internal policies by offering two borrower grade scales. The 10-point borrower grade scale provides more "pass" categories and is appropriate for loan portfolios with larger commercial customers—ones with significant geographic presence and greater financing alternatives. The 8-point scale is geared toward loan portfolios in which the lending activity is more limited to a community or region.

A Credit Risk-Rating System is divided into three sections:

• A Survey of Current Risk-Rating Systems
• The Risk-Rating System Itself
• Transitional Risk

To purchase A Credit Risk-Rating System, contact RMA's Customer Care at 1-800-677-7621 or order online.