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Writing Effective Credit Memos & Loan Narratives

Registration Options and Pricing

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Thursday, September 15, 2016

12:00 pm – 1:30 pm PT
1:00 pm – 2:30 pm MT
2:00 pm – 3:30 pm CT
3:00 pm – 4:30 pm ET

The purpose of the credit memo and loan narrative is to tell the borrower's story. They are the basis for making credit approval and renewal decisions. They are also used for detailing ongoing account management for loan relationships and maintaining pertinent information regarding material developments or changes in the quality or nature of the credit or borrower over the life of the loan. The underwriter needs a clear picture to make the best approval and renewal decision. Whether it is a consumer, real estate, or commercial credit, an effective credit memo/loan narrative is imperative for both safety and soundness and compliance.

A well-written credit memo assists:

  • Loan officers and underwriters in making a strong credit decision (now and in the future for possible renewals)
  • Directors on the loan committee to make a strong credit decision
  • Loan Review Officers in understanding a credit being reviewed
  • In documenting workout strategies for problem credits
  • Examiners when reviewing your files

This session will go through the key components and will provide samples so you may compare what you are using and/or develop a brand process. One size does not fit all. Even though this session will cover what should be included in an effective credit memo, there will be varying degrees of detail based on the complexity and risk involved.

Continuing Education: Attendance verification for CE credits upon request

HIGHLIGHTS

  • Objective of credit memos: what is important to include and not include
  • Credit analysis, including terms, exposure summary, financial analysis, collateral, etc.
  • Key financial ratios to consider and what they mean
  • How to structure and organize the summary narrative
  • Sensitivity analysis (stress testing)
  • Drawing credit risk conclusions and identifying strengths, weaknesses, and mitigants
  • Common examiner criticism in credit write-ups

  • TAKE-AWAY TOOLKIT
    • Samples of two formats to use to develop/strengthen credit memos
    • List of helpful online resources for industry analysis
    • Employee training log
    • Quiz you can administer to measure staff learning and a separate answer key

WHO SHOULD ATTEND?

This informative session is designed for lenders, credit analysts, and commercial loan administration professionals. Directors on the loan committee would also benefit.

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