Virtual Credit Analyst Development Program

Virtual: October 7, October 11, October 28, October 29, November 20, November 21 | 10:30 a.m. - 5:30 p.m. CST

WHO SHOULD ATTEND

The Credit Analyst Development Program is designed for credit analysts, credit officers, credit administrators, commercial loan officers/managers, loan review officers, branch managers and management trainees. In order to obtain the greatest benefit from this course, participants should have a general understanding of accounting and have a basic understanding of financial statement and credit analysis.

Having learned how to interpret and analyze a bank’s financial statements, participants will gain deeper insight into the factors affecting bank performance. Later sessions in this course will address ways in which performance may be hindered or improved by funding strategies and risk management. Ultimately, participants will be able to review a bank’s financial statements to identify strengths and weaknesses and be able to recommend changes that will lead to improved performance.

In the final session of this course, participants will put what they have learned into practice. Participants will analyze a new data set, rate the bank’s performance and suggest strategic adjustments that might benefit the bank.

PRICE

State Banking Association Members: $2,275 per registrant

SCHEDULE

THE ROLE OF A CREDIT ANALYST WITHIN THE BANK

This first session of the Credit Analyst Development Program will provide a clear understanding of the role of a credit analyst and why it is a vital part of the credit underwriting process. One habit of a successful bank is the ability to identify, measure and manage risk in the lending process. The credit analyst has a paramount role in the credit decision process.

SESSION HIGHLIGHTS:

• The role of commercial lending in the banking industry
• Characteristics of a successful credit analyst
• Skills required to be successful including: what information is required to match the loan request; best practices in spreading financial statements; knowing the right questions to ask
• How to communicate analytical results to more senior lenders
• Products and services offered by banks, including depository and lending services
• Review of the regulatory agencies and banking regulations that affect commercial lending

This session will provide participants with a refresher on the basics of accounting. It will demonstrate the ten step accounting cycle leading up to the creation of the income statement, statement of owner’s equity, balance sheet, and statement of cash flows and how these financial statements are connected to one another. Numerous “hands-on” examples will be included to reinforce the accounting concepts.

SESSION HIGHLIGHTS:

• The four major financial statements: income statement, statement of owner’s equity, balance sheet, and statement of cash flows
• Rules of debits and credits
• Accrual versus cash-basis accounting
• Adjusting entries
• Accounting for inventory and receivables
• Long-term liabilities and depreciation
• Analysis of notes to the financial statements
• Types of financial statements and the CPA opinion 

EMPLOYING BASIC FINANCIAL ANALYSIS TOOLS

Financial statements are the basis for financial analysis, valuable as a loan monitoring tool used to broaden and deepen the borrower relationship. This session will demonstrate the development and use of comparative and common-size analysis, ratio analysis and  cash flow analysis. To make these tools more efficient and enhance the value to the lender the session will introduce “30 Second” analysis and a Loan Screening Worksheet. Participants will learn how to use the analytical tools to underwrite new relationships, monitor existing relationships, identify business development opportunities and add value to the borrower relationship.

SESSION HIGHLIGHTS

• Comparative and common-size analysis including a “30 Second” review
• Use business financial statements, explain the calculation and interpretation of six classes of ratios commonly used in commercial loan financial analysis
• Introduce a Loan Screening Worksheet built around the 5Cs of Credit which utilizes three key ratios
• How ratios can be used to determine when it is appropriate to term out a line of credit
• How ratios included in covenants in a loan agreement effectively limit:
• the borrower’s ability to grow
• the total amount of debt and the amount of short term debt the borrower can have
• the amount the owner can take in salary and distributions
• Review the concept of sustainable growth
• How to use business financial statements to identify opportunities to broaden and deepen the customer relationship
• How to use business financial statements to assess risk factors in a lending opportunity
• Apply the concepts in three case studies

BASIC PERSONAL & BUSINESS TAX RETURN ANALYSIS

This session will provide participants with a better understanding of the often complex and confusing topic of taxes. The first part of the day will concentrate on personal tax return analysis, while the second will focus on the analysis of various business tax returns.

SESSION HIGHLIGHTS

• Review the basic structure of the personal tax return Form 1040 and supporting Schedules including Schedules K-1
• Prepare a personal cash flow from information obtained from Form 1040 and supporting schedules
• Demonstrate how to identify a potentially fraudulent tax return
• Review the structure of C Corporation (Form 1120), S Corporation (Form 1120 S), and Partnership including LLCs (Form 1065) tax returns and Schedules K-1.
• Discuss the interpretation of Schedules M-1 and M-2 of corporate tax returns
• Utilize the business tax return to construct a “30 Second” Analysis and complete a Loan Screening Worksheet
• Integrate business and personal cash flow into global cash flow
• Apply the concepts in three case studies

LOAN STRUCTURE, DOCUMENTATION, AND COMPLIANCE

This session will cover the interrelated disciplines of structuring and documenting a commercial loan, along with meeting applicable compliance requirements. Appropriate management of these areas will assist the bank in maintaining a “vibrant” loan  p portfolio. Concepts will be reinforced through a comprehensive case study.

SESSION HIGHLIGHTS

• Review basic “business” structures from C Corporations to LLC’s
• Explore the six elements of loan structure: loan purpose, sources of repayment, adequate amount, appropriate term, adequate support, framework for monitoring
• Summarize the four elements of loan support: collateral, guarantees, loan agreements, subordination agreements
• Highlight commercial loan documentation issues including promissory notes, security agreements, and guarantees
• Discuss loan pricing and monitoring issues
• Review current compliance issues: Equal Credit Opportunity Act (Reg. B); Truth in Lending Act (Reg. Z); Bank Secrecy Act (BSA); Fair Credit Reporting Act (FCRA); Fair Debt Collection Practices Act (FDCPA); and UCC Article 9
• Analyze comprehensive loan structure/ documentation/compliance case study

BASICS OF C&I LENDING AND COMMERCIAL REAL ESTATE (CRE) LENDING

November 21, 2024 • 10:30 a.m. to 5:30 p.m. CST

C&I Lending
We will begin with a brief overview of commercial and industrial (C&I) loan products including working capital lines of credit, ABL facilities, and equipment financing (loans/leases). It will include the structure and basic underwriting for these credit  instruments, pricing, documentation requirements and other challenges in managing the C&I loan portfolio.

SESSION HIGHLIGHTS

• Explore underwriting C&I loans including accounts receivable, inventory, and equipment financing
• Review documentation, collateral, pricing, and managing of C&I loans 

Commercial Real Estate (CRE) Lending
We will review the underwriting of a CRE loan, including assessing the borrower, exploring loan structure, determining loan support, and calculating the cash flow of the property. Documentation, closing, and monitoring of CRE loans and related  environmental issues will then be explored. This will be followed by a review of problem CRE loans and related collateral issues.

SESSION HIGHLIGHTS

• Analyze the underwriting of a CRE loan including assessing the borrower, exploring loan structure and support, and determining cash flow
• Address various loan documentation, closing, and monitoring issues as well as environmental concerns

INSTRUCTOR PROFILES

Jeffery Johnson teaches actively for 15 state banking associations in the United States, Risk Management Association (RMA) and individual banks nationwide. He is an experienced WBA training professional having worked for the Association for a number of years, including for the CADP and EDP.

Richard Mayeda is the first vice president and senior credit officer at First Financial Northwest Bank. He has over 35 years of banking experience, almost all of it in commercial lending. He calls himself an all-around Pacific Northwest banker as he has  worked for seven different institutions over the years, of all different sizes, in the states of Washington, Idaho and Oregon. He has experience first as a credit analyst, a small business lender, before moving to commercial banking and finally to credit  administration. For the past five years, he has also served as a Research Report Advisor for Pacific Coast Banking School.

David L. Osburn is the founder of Osburn & Associates, a business training and contract CFO firm that provides seminars, webinars, and keynote speeches for bankers. His extensive professional background of over 30 years encompasses 21 years as a trainer and contract CFO and 16 years as a bank commercial lender. His banking credentials include loan underwriting, loan “work-out”, management, and business development. David has been an adjunct college professor for over 30 years including the College of Southern Nevada.

ATTENDANCE

Students can miss one class during this program, which can be made up the following year. If more than one class is missed, the student will not receive their graduation certificate, but can earn it by attending the missed class the next year.

HOMEWORK & MENTORS

Participants are required to complete 6-8 hours of homework. This prepares them to best understand the topics, challenges them to be proactive in their learning, and to seek out the advice of key individuals within their own institution when needed. After completing their individual assignments, participants then discuss within their class to compare notes and learn how their peers approached the questions. Each student is also paired with an executive-level mentor from their bank, who works with them to reinforce the classroom learning experience. Mentors are a required part of the program, and act as a sounding board to assist in understanding new concepts

RECOMMENDED PREREQUISITES

Before joining the WBA’s CADP, we strongly recommend several courses to help you prepare and be successful. These courses are offered through the ABA and are available online at your convenience.

• Loan Structuring, Documentation, Pricing and Problem Loans
• Introduction to Analyzing Financial Statements
• Understanding Business Borrowers Suite

We also strongly recommend attending our Understanding Bank Performance to help prepare. Student who register for both CADP and UBP will receive a $500 discount on their UBP registration. Learn more about the program at www.wabankers.com/ubp.