(ON DEMAND) Writing Effective Credit Memos & Loan Narratives

Email to Order the Recording + Free Digital Download

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.

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

Attendance verification for CE credits provided upon request.

 
WHO SHOULD ATTEND? Lenders, credit analysts, and commercial loan administration professionals.  Directors on the loan committee would also benefit.
ABOUT THE PRESENTER – Ann Brode-Harner, Brode Consulting Services, Inc., began her career in 1973 and has continued her service as a consultant to regional and community financial institutions through a wide range of areas including strategic planning, lending, deposits, marketing, training, compliance, and management.  Ann is a well-respected presenter and has spoken to audiences across the country for over 25 years.  She has presented sessions for numerous state associations and has taught at the School of Banking Administration at the University of Wisconsin as well as many other state banking schools.  Ann is the author of “The Bank Deposit Documentation Manual for Front-Line Personnel” published by Bankers Publishing Company, and is well represented in numerous industry publications.