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Identifying and Managing Problem Loans and First Steps in Managing Problem Loans

The economy is now in the third year of a sluggish recovery. Most banks have resolved asset quality problems resulting from the Great Recession and are now focused on growing the loan portfolio. History has shown that most problem loans are made in the later stages of a recovery. Now is the time to remind lenders how problem loans develop and sensitize them to the importance of early problem loan identification and aggressive corrective action.

This course will focus first on the three deadly sins that cause large numbers of problem loans in banks. Students will then learn how to identify potential problem borrowers and industries. Identifying a potential problem loan must be followed by a meeting with the borrower. The course will outline the “first steps” to prepare for the meeting and discuss the objectives of the first and subsequent meetings. Students will work through a structured process to evaluate alternatives and reach a decision on the approach which provides the most money-present valued, in the least time, with the least cost and least risk. A series of exercises and case studies will be used to demonstrate application of the concepts.

Who Should Attend:
Line Lenders with 2 or more years of lending experience and credit personnel who are responsible for identifying potential problem loans and taking the first steps to protect the bank’s position and begin to resolve the problem. This course is not designed for workout specialists who will manage protracted workouts, liquidations, bankruptcies or litigation.

Program Length: One Day