Effective Credit Memo - Reporting Effectively in the Credit Memorandum

Why Should You Attend:

After a detailed credit analysis of a loan request has been performed, it is now time to communicate your findings in writing. Credit memoranda are a primary means of communications within the banking industry.

In writing effective credit memoranda, it is not what you say that commands attention, but how you say it. Credit memoranda serve three functions:

• They provide information on the condition and status of a customer relationship.
• They provide a record of thoughts and actions.
• They support or recommend action.

This webinar will teach skills required to write an effective credit memorandum, which places emphasis upon factors or trends that are important without the need to state the obvious. In short, the credit memo should present relevant, material facts and the writers’ thoughts and opinions. Remember, anything you write in a credit memorandum will become public record if you find yourself in court with a borrower.

Learning Objectives:

• Strengthen their understanding of credit analysis
• Clearly describe the financial impact of changes in financial factors and not just report on what changed
• Interpret financial trends and financial ratios
• Write succinct and focused credit memoranda
• Meet with management armed with relevant questions and issues to be addressed
• Feel more confident in defending a recommended course of action based upon relevant facts and not instinct

Areas Covered in the Webinar:

• Balance sheet analysis
• Income statement analysis
• Cash flow analysis
• Calculating and interpreting financial ratios and cash flow
• Using analysis to determine the financial impact of changes in financial factors
• Questions to raise with the customer after the credit analysis is completed
• Outline of relevant factors to include in a credit memorandum
• How to report your finding efficiently and effectively in the credit memorandum
• Apply the concepts to a study case

Who Will Benefit:

• Commercial Loan Officers
• Consumer Loan Officers
• Credit Analysts
• Loan Review Personnel
• Compliance Officers
• Internal Auditors
• Branch Managers
• Credit Administration
• Loan Operations Staff

Instructor Profile:

Robert Hawkins began his banking career at Compass Bank (now BBVA) as a management trainee in 1978. In May 1981, he joined the Federal Reserve Bank of Atlanta as an assistant bank examiner. He received his commission in 1985 and was promoted to senior examiner in 1991.

In the latter role, Mr. Hawkins led supervisory events at the district’s largest and most complex banking organizations. On three occasions, he was chosen by the senior officer group to participate in the Shared National Credit Program which is a joint, interagency initiative that was created to evaluate and assign the appropriate risk ratings to credits, $20 million and above, shared by two or more financial institutions.

In 2004, he was promoted to Assistant Vice President in Community Bank Supervision. In this role, he supervised three examination teams, 25 banks and a myriad of bank-holding companies. He served as an instructor for the Federal Reserve Board of Governors’ Credit Risk Analysis School and he was a frequent panelist and speaker. He retired from the Reserve Bank recently.

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