Ranking Your Small Regional Lender - Help To Come Up With Scoring!

[Bryan Hancock]

Our guidance line relationships have grown of late to the point where we have put together a draft ranking mechanism for our "horses" in an attempt to get the most favorable terms from our lenders.  Special thanks to @J. Martin for helping with the latter part of this scoring relating to the bank's risk assessment.  I figured J may want to display his intellectual horsepower on this thread for the good of all instead of doing it privately with me in email threads.  

Our approach was to break down all of the aspects of a lending relationship from a borrower's perspective in a fashion as close to quantitative as is possible.  Here is where the model stands currently:

Overall Criterion Weighting

-Documents Risk Assessment - 30%

-Relationship, Ease Of Funding Draws - 15%

-Line Quantity - 15%

-LTC/Project - 15%

-Compensating Balance Requirements - 10%

-Term Of Loan/Extension Handling - 10%

-Rates - 5%

The "documents risk assessment is further broken down into these parts to make up the 30% weighting:

Bank Document Risk Assessment

-Nervous Lender Clause - 22.5%

-Cross-collateralization, cross-default, and/or dragnet clauses - 22.5%

-Guarantees - 22.5%

-Grace/cure period - 10%

-Deposit relationships for security - 10%

-Carve-outs for bad boy provisions - 7.5%

-Relationship lending - 2.5%

-Fire and casualty insurance - 2.5%

The bank's risk assessment has yet to be included in the overall scoring, but J Martin gave us these resources to see whether or not the banks are solid:

FFIEC Data - https://cdr.ffiec.gov/public/ManageFacsimiles.aspx

Feedback here is valuable since scoring the banks is not my area of expertise.  We're currently looking at their Tier 1 leverage capital and construction and development concentration to see how to score them.

Any feedback on the above?  Are some ratios high or low?  How would you change the rankings?  Thoughts?  I have a spreadsheet for this I can share at some point as it stabilizes some.