Calendar of Events

Seven Habits of Effective Credit Administration in Commercial Banks

10/03/2017, 1:30 PM to 3:30 PM

No location provided

Amy Davis adavis@msbankers.com 601-948-6366

Description:

Seven Habits of Effective Credit Administration in Commercial Banks


Presented by Jeffrey W. Johnson
Tuesday, October 3rd, 2017 -1:30 pm - 3:30 pm CT

At the end of this session, the participant will have a good road map to build and manage an effective credit administration area of the bank and to satisfy regulators' requirement to operating a safe and sound bank from a credit risk perspective.

Seven Characteristics are defined as followed:

  1. Well Defined Credit Culture Established and Supported by:
    • An Effective Loan Policy
  2. Highly Effective Risk Assessment and Credit Underwriting System by:
    • Choosing the right personnel to be Credit Analysts, Lenders or Loan Administrators
    • Knowing how to balance Risk and Rewards through proper credit, ratio and cash flow analysis
    • Knowing how to report risk assessment by writing effective credit memoranda
  3. Highly Effective Credit Committee that:
    • Considers all pertinent information
    • Allows members to express their opinion "freely"
    • Records Minutes that matter
  4. Utilize Credit Risk Rating to Identify Risk in the Loan Portfolio by:
    • Clearly defining credit grades and applying them to various types of borrowers
    • Utilizing a clear, objective and measurable loan grading system
  5. Loan Documentation Procedures that will:
    • Identify the Borrower's legal structure
    • Identify, value and properly classify the collateral (emphasizing appraisal reviews)
    • Evidence the debt outstanding
    • Attach the bank's security interest in the collateral
    • Perfect the bank's lien position in the collateral
  6. Effective Loan Portfolio Management by:
    • Defining the expectations of loan officers in the management of their loan portfolio
    • Using Loan Agreements, Covenant Compliance Reports and other monitoring tools to manage the loan portfolio
    • Adopting prudent commercial real estate loan workout strategies for problem loans
  7. Calculating and Maintaining an Adequate Allowance for Loans and Lease Losses
    • Reviewing and Documenting the ALLL methodology

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