Shared National Credit Comparison
By: Stephen Rountree
Annually, we discuss and compare the asset quality in the SNC portfolio to that within the SHP & Co. client group. With the 3rd Quarter 2017 SNC review, we have updated our annual comparison using SHP & Co. Q2 2017 client data.
For reference: the SNC portfolio included ~11,300 credits totaling $4.3 trillion in commitments and $2.1 trillion in outstandings. Classified assets totaled $285.9 billion with special mention loans totaling $131.7 billion. Included in the adverse ratings are $245.1 billion in substandard, $24.2 billion doubtful and $16.6 billion in loss.
Also of note, oil and gas related credits represent 26.5% of total SNC classified loans. Assuming a 27% reduction in total SNC classification, roughly 4.8% of the portfolio would still be adversely classified.
While a crude comparison, it would appear as based on average and median volume of classified loans, the ‘average community bank’ loan portfolio within the Powell & Co. client base contains a lower volume of classified loans as compared to the SNC portfolio.
The August 2017 SNC review highlights included:
For reference: the SNC portfolio included ~11,300 credits totaling $4.3 trillion in commitments and $2.1 trillion in outstandings. Classified assets totaled $285.9 billion with special mention loans totaling $131.7 billion. Included in the adverse ratings are $245.1 billion in substandard, $24.2 billion doubtful and $16.6 billion in loss.
- SHP & Co. average classified loans to total loans 3.10%
- SHP & Co. median classified loans to total loans 2.35%
- Classified SNCs to the total portfolio 6.6%
- Special mention represented 3.1% of the total portfolio
Also of note, oil and gas related credits represent 26.5% of total SNC classified loans. Assuming a 27% reduction in total SNC classification, roughly 4.8% of the portfolio would still be adversely classified.
While a crude comparison, it would appear as based on average and median volume of classified loans, the ‘average community bank’ loan portfolio within the Powell & Co. client base contains a lower volume of classified loans as compared to the SNC portfolio.
The August 2017 SNC review highlights included: