Most loans on the books move from closing to full payout in accordance with the terms of the loan without the requirement of a serious collection effort. Unfortunately, some loans will not perform as expected due to a number of reasons.
Most of the reasons for non performance of commercial loans are due to financial factors such as lack of cash flow or a low liquidity position. Other reasons are non financial factors such as a down economy, poor management, technological advances or competition.
One of the primary reasons why bankers are criticized by regulators for poor loan portfolio management is due to bankers being slow in to recognize deteriorating loans and when recognized, being slow to react. The purpose of this course is to assist bankers in recognizing the early warning signs of a deteriorating loan.
Early intervention in a potentially problem loan could result in a positive outcome by minimizing or even eliminating losses during the problem loan management phase. Samples of financial early warning signs that will be discussed during this session include:
- Rapid Growth and It's Impact on the Balance Sheet
- Glitches in a Company's Operating and Fixed Asset Cycles
- The Use of Debt to Fund Operations
- Financial Impact of Slowing Trading Asset Turnover
- Deteriorating Relationship with Other Creditors
- Lines of Credit that are "Maxed Out" and the Causes
When the major reasons for a deterioration loan have been identified, the course will then move into presenting techniques designed to manage these types of loans including:
- Performing Early Assessment of Loans and Collateral (Situation Analysis)
- Assessing the Collateral Position of all Creditors and Their Impact on your Borrower
- Utilizing Financial Covenants in a Loan Agreement Effectively
- Capitalizing on Tax Refunds From Loss Carrybacks Which Can be Applied to Your Loan
- Avoiding Pitfalls that Might Impede Enforcement of Rights
- Determining the Amount of Impairment to be Included in the Allowance for Loans and Lease Losses Based upon the Three Required Methods
After completion of this session, you will be able to recognize the obvious and subtle warning signs and have a better understand of what alternatives are available in order to increase the potential for full repayment.
Who Should Attend
Any one in loan portfolio management or credit administration including, but not limited to:
- Senior Loan Officers
- Senior Credit Officers
- Commercial Loan Officers
- Consumer loan Officers
- Branch Managers
- Loan Review Personnel
- Compliance Officers
Jeffery W. Johnson started his career with SunTrust Bank in Atlanta as a Management Trainee and progressed to Vice President and Senior Lender of SouthTrust Bank and Senior Vice President and Commercial Banking Division Manager for Citizens Trust Bank of Atlanta.
Most of his career has been spent in Credit Administration, Lending, Business Development, Loan Review, Management and Training &Development. He has managed loan portfolios representing a cross section of loan types including: Large Corporate, High Net Worth Individual, Middle Market Companies, Small Business, Real Estate and Non-Profit Organizations.
Mr. Johnson is now a training professional in the financial industry by leading various seminars covering important topics relating to issues in financial institutions. He teaches actively for fifteen state banking associations in the United States, Risk Management Association (RMA) and individual financial institutions nationwide. He co-authored a training course entitled "Lending to Service and Other Professional Organizations" for RMA in 2001.