Advice Market Information

Turning Loan Review Insights Into 2026 Budget Inputs

Posted on November 10, 2025 Published by

As November begins, many institutions are finalizing their budgets for 2026, a process that often involves balancing optimism about growth with realism about risk. While much attention goes to rate assumptions, loan growth projections, and expense planning, one of the most valuable, and sometimes underused, resources at this stage is your most recent loan review data. 

At Enlighten Financial, we view loan review not as a retrospective exercise, but as a forward-looking tool that can sharpen the accuracy of your financial planning. The findings from recent reviews can reveal early indicators of stress, shifts in borrower behavior, and emerging concentration risks that deserve attention before year-end numbers are finalized. 

Where Loan Review Insights Should Inform 2026 Planning 

  1. Capital Planning and Reserves
    Loan review results often surface early signs of credit migration; borrowers whose performance or collateral coverage has weakened since the last assessment. Use these insights to reassess whether current capital and reserve levels remain sufficient under realistic stress conditions. If you’ve identified more credits trending toward watch or substandard classification, or if sector-level concerns (such as CRE or manufacturing) are intensifying, this is the time to model potential reserve implications. Aligning these findings with your stress testing results ensures that both capital adequacy and allowance for credit losses (ACL) assumptions reflect today’s realities, not last year’s conditions.
  2. Credit Concentration Management
    Loan review data provides a ground-level view of where your exposures may be accumulating faster than expected. As you finalize 2026 budgets, revisit concentration limits and portfolio mix targets.Are certain CRE property types showing early weaknesses? Are specific industries or borrower segments representing a growing share of total exposure? Use those observations to adjust lending targets and pricing models accordingly. Clear visibility into concentrations, supported by recent review findings. helps management determine where additional capital support or strategic diversification may be warranted. 
  3. Informing Loan Growth Assumptions
    Budgeting for loan growth without incorporating recent review data risks misalignment between loan growth strategies and risk strategies. Use insights on underwriting trends, borrower cash flow health, and collateral performance to inform next year’s loan growth targets. For example, if reviews indicate tightening margins or declining debt service coverage ratios across certain borrower types, consider moderating growth expectations in those areas or adjusting credit terms to reflect changing risk. On the other hand, you may find that your institution has an appetite for more risk after analyzing current trends in your risk profile.

 Why November Timing Matters 

November represents the last opportunity to incorporate real-time credit intelligence into your budget before it’s approved. Integrating loan review insights now ensures your financial plan isn’t just a static projection, but a risk-aware roadmap. 

It also allows management teams to have more informed discussions with boards and regulators. Presenting budget assumptions that clearly tie back to updated credit performance data strengthens confidence in your institution’s governance, oversight, and planning discipline. 

From Review to Readiness 

Loan review is more than an audit; it’s a feedback loop. By feeding the findings of recent reviews directly into 2026 capital planning, reserve calculations, and lending strategy, your institution can move beyond reactive risk management toward proactive preparation. 

In a time of continued market uncertainty, clarity leads to confidence. And confidence, backed by data, is what positions your institution to meet 2026 with both resilience and readiness. 

Tags:

Comments are closed here.

“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors.”
— Bill Beardsley, President, Michigan Business Connection
“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors."
— Bill Beardsley, President, Michigan Business Connection