Advanced Commercial Lending Seminar

About the Program

Who Should Attend

Credit (Risk) Analysis is one of the most important functions performed by banks. Since interest and fee income from loans represent the largest source of income for banks, it is vital that thorough credit analysis be performed before loans are approved and funded. In order to accomplish this, lenders must be exposed to many areas in the underwriting process.

This course will utilize case studies to reinforce the learning process and assist in loan decisioning and is designed for lenders and analysts with experience in the credit underwriting process, including those with knowledge of basic accounting and financial and credit ratios to determine creditworthiness or those who attended the Oregon Bankers Association’s Commercial Lending Boot Camp.

Concepts taught in previous Commercial Lending Boot Camp sessions or your understanding of basic accounting, credit and cash flow analysis will be advanced to provide a deeper understanding of the credit underwriting process and loan portfolio management. Areas of specialized lending will also be discussed. These concepts will benefit all who are ready to analyze their commercial borrowers for a deeper level of understanding.

Program Components

Introduction

The role of corporate banking in the world market
The commercial lending process and its significance to the success of the bank
Analyzing industry, business and management risk

Advanced Credit and Ratio Analysis

Analyzing credit and financial ratios to determine an entity’s:
- Liquidity
- Leverage
- Asset Management Capabilities
- Operating Performance
- Determining the Financial Impact “WOW Factor” from changing Ratio Metrics

Case Study: Short Term Loan Structuring Through Asset Conversion Cycle Analysis & Cash Budgeting

Calculation and interpretation of the Operating and Fixed Asset Cycles and their use in determining the length of short-term and long-term financing requirements.
Calculation of new working investments to determine how much short-term credit is required to cover the shortfall in spontaneous financing and the timing of repayment.
Review method to develop a cash budget to determine the ability to generate cash from the operating cycle and trading activities for the repayment of short-term loans.

Analysis of Borrowing Causes and Loan Structuring

Common causes of borrowing needs.
Differentiating between borrowing causes and stated loan purpose.

Case Study: Advanced Cash Flow Analysis

Defining cash flow and how cash is generated or utilized from operating, investing and financing activities.
Review various methods for how cash flow can be calculated and presented.

Financial Forecasting & Sustainable Growth Analysis

Converting management’s assumptions into a range of expected financial performance.
Tools utilized to develop financial forecasting.
Review methods to determine the rate a borrower can grow revenue while maintaining leverage position at a given point.

Sustainable Growth

Review methods to determine how much revenue is required in order to eliminate operating losses and to meet fixed operating costs.

Cash and Capital Budgeting

Determining the feasibility of various options to purchase large capital assets utilizing Present Value Method, Profitability Index Method, Internal Rate of Return Method, Average Rate of Return Method, and the Payback Period Method.

Writing an Effective Credit Memorandum

Methodologies to Utilize Ratio Analysis, Cash Flow Analysis, Asset Conversion Cycle Analysis, Financial Forecasting And Sustainable Growth Analysis to Create An Effective Credit Memorandum That Communicates Clearly to Those Required to Approve Loans.

Loan Portfolio Management

Effective loan portfolio management techniques will be explored Topics to be covered include:

Effective loan grading using regulatory recommended procedures.
Loan portfolio management through proper loan documentation with an emphasis on loan agreements to control a borrower’s financial activity over an extended period.
Identifying and managing problem loans.
Collateral management by exploring the most effective manner to choose assets to serve as collateral through appraisals, evaluations and environmental assessments and knowing how to attach and perfect these assets to protect the bank’s interest.

Specialized Lending

Unique lending situations which require a different approach to identify and manage risk will be explored, including:

Asset-based lending.
Commercial real estate lending.
Acquisition, development and construction lending.
Lending to municipalities and other governmental units.

After attending the Advanced Commercial Lending Seminar, students will have a deeper understating of:

Key industry, business and management risks.

Analysis of complex credit requests.
Cash flow analysis and financial forecasting.
Credit underwriting.
Key credit administration considerations to ensure a safe and sound financial institution.
Proper loan structuring
Credit enhancement tools used to protect the bank’s exposure to smaller and marginal companies.

About the Instructor

Jeffery Johnson started his career with SunTrust Bank in Atlanta as a management trainee and progressed to vice president and senior lender for SouthTrust Bank and senior vice president and commercial banking division manager for Citizens Trust Bank of Atlanta.

Most of his career has been in credit administration, lending (commercial, consumer, and real estate), business development, loan review, management, and training. 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 non-profit organizations. He has also managed several loan officers with portfolio management responsibilities.

Jeffery is now a training professional who leads various banking seminars. He teaches for 15 state bankers associations, the Risk Management Association and individual banks nationwide.

Jeffery earned a B.A. Degree in Accounting from Morehouse College in Atlanta; an MBA in Finance from John Carroll University in University Heights, Ohio; a Banking Diploma from Prochnow School of Banking at the University of Wisconsin-Madison; and a Graduate Certificate in Bank Management from the Wharton School of Business at the University of Pennsylvania.

Commercial Lenders
Credit Analysts
Loan Review Officers
Senior Loan Officers
Senior Credit Officers
Branch Managers
Financial/Accounting Personnel
Special Asset Managers
Special Asset Assistant Managers

Registration

Early Bird Rates - Register by September 24!
$1,150 for OBA member bankers
$950 for additional OBA member banker from same bank

After September 24:
$1,350 for OBA member bankers
$1,150 for additional OBA member banker from same bank

A non-member surcharge of 50% may be charged.

Event Cancellation & Late Fee

The registration deadline is five days prior to a session and no refunds will be offered after the registration deadline; however, a substitute may attend. Registrations received after the deadline will be accommodated, if possible, but may incur a late fee up to 10% of the registration. Cancellation requests should be sent in writing to [email protected].

Thank You to Our Sponsor

Questions

Jennifer Schubert
(503) 576-4126
[email protected]

Location

Chemeketa Center for Business & Industry
626 High Street NE
Salem, OR 97301

Lodging

Discounted lodging is available at The Grand Hotel in Salem. Reservations can be made by calling (503) 540-7800. Be sure to reference the Oregon Bankers Association for our discounted rates ranging from $189-$249 per room per night..