Virtually all of the mid-sized and larger financial institutions maintain loan review departments or have people designated to perform that function. Although the banking industry is condensing and the number of independent banks is dwindling, smaller independent or
community banks should still be reviewing their loans on a regular systematic program.

Contracting with an outside source might be a very cost efficient way to accomplish the goal of loan review without taking time away from other needs. Additionally, because an outside source is unlikely to either know the borrowers personally or be acquainted with their financial circumstances, an objective review confined to the facts is potentially more likely.

Management and directors can benefit from a third party review simply because it is objective and intended to factually, not emotionally provide an accurate picture of strengths and weaknesses. Underwriting and other technical deficiencies if present will be brought out allowing appropriate decisions. Smaller institutions are typically very closely held. Because the industry is changing, almost any profitable well-run bank can be considered an acquisition target.  Accurate asset valuations are essential to enhancing value for shareholders.