Key Indicators Of Problem Loans

Webinar: ID# 1023601
Recorded CD
About This Course:
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 several reasons. Most of the reasons for nonperformance 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 recognizing deteriorating loans and when recognized, being slow to react.

The purpose of this presentation 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.

Warning signs can present itself as financial red flags or nonfinancial red flags. Both are equally effective in determining if your commercial borrower is experiencing financial difficulties.

  • Review of Financial Warning Signs
  • Review of Non-Financial Warning Signs
  • Benefits of an Early-Warning System to Detect Problem Loans
  • Utilizing Credit Risk Rating to Determine Credit Quality
  • Utilizing Ratio and Cash Flow Analysis to Determine Creditworthiness
  • Factors to Consider to Implement Successful Collection Strategies
About The Presenter

Jeffery Johnson
  • Banking career expands 36 years working for large, regional and community banks
  • He started his career with SunTrust National Bank in Atlanta as a management trainee and progressed to vice president and senior lender for SouthTrust Bank (a large Southeastern Regional Bank) and senior vice president and commercial banking division manager for Citizens Trust Bank of Atlanta (Community Bank)
  • Most of his career has been spent in Credit Administration, Lending (Commercial, Consumer and Real Estate), 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 Individuals, Middle Market Companies, Small Businesses, Real Estate and Nonprofit Organizations and managed several loan officers with portfolio management responsibilities
  • Now a training professional in the banking industry by leading various seminars covering important topics relating to issues in banking; he teaches actively for twenty-two state banking associations and community banking associations in the United States, Risk Management Association (RMA) and individual banks nationwide
  • Co-wrote a training course entitled “Lending to Service and Other Professional Organizations” for RMA in 2001
  • He led a week long Consumer Lending school for UNI Strategic in Singapore where bankers from Malaysia, Indonesia and Singapore were in attendance in January 2012 and repeated the same program in Kuala, Lumpur in November 2012
  • Was also invited to lead a week long Advanced Commercial Lending & Commercial Loan Documentation in Dubai (United Arab Emirates) hosted by IIR Middle East, a firm specializing in international conferences and seminars
  • In order to stay abreast of issues facing banks, he engages in loan reviews for his client banks; during an engagement, he reviews loans of all sizes to determine creditworthiness; compliance with banking rules and regulations; compliance with the bank’s internal credit policy; accuracy of the loan grade; completeness of the documentation file and other aspects such as portfolio trends, performance and capital adequacy
  • MBA degree in finance, John Carroll University in Cleveland, Ohio; Diploma of Graduation from the Prochnow School of Banking at the University of Wisconsin-Madison and a Graduate Certificate in bank management from the First American Management Institute at the University of Pennsylvania’s Wharton School of Business; B.A. degree in accounting, Morehouse College in Atlanta, GA
Key Indicators Of Problem Loans
Available on CD format
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