Commercial Credit Grading: Methodology, Risk & Examiner Issues
Accurate and timely risk grading of commercial credits is a crucial component of any commercial lender’s credit risk management. Examiners’ and loan reviewers’ evaluations of a bank’s ability to assess and manage its credit risk are heavily influenced by the bank’s commercial loan-grading process and outcomes. This webinar will address issues important to implementing and maintaining an effective commercial loan-grading system. Topics will include the objectives of assigning risk grades to credits, considerations for defining a bank’s grading scale, and factors to consider when assigning risk grades. This webinar will also address ways to use risk grades to enhance overall credit risk management, including the role risk grades can play in developing an ALLL methodology that will be consistent with the requirements of the upcoming current expected credit loss (CECL) model.
Recorded Thursday, July 28, 2016
Continuing Education: Attendance verification for CE credits upon request
- Considerations for the design of risk-rating scales and grade definitions
- Guiding principles for effective use of a risk-grading matrix
- How to effectively use subjective criteria in risk-grade assignment
- Tips measuring the cash flow component of the risk grade
- What measure of cash flow to grade on?
- Should borrower or global cash flow be considered?
- What examiners look for when evaluating commercial loan grading and its impact on overall credit risk management
- The role risk grades can play in a CECL-appropriate ALLL methodology and in stress testing exercises
- TAKE-AWAY TOOLKIT
- Manual covering the material addressed during the presentation
- List of helpful questions when evaluating the effectiveness of your risk-grading system
- Employee training log
- Quiz you can administer to measure staff learning and a separate answer key
WHO SHOULD ATTEND?
This informative session will benefit risk managers, loan officers, credit analysts, and anyone involved in assigning, validating, or working with commercial loan grades.
NOTE: All materials are subject to copyright. Transmission, retransmission, or republishing of any webinar to other institutions or those not employed by your financial institution is prohibited. Print materials may be copied for eligible participants only.
MEET THE PRESENTER
Tommy Troyer is the Executive Vice President of Young & Associates, Inc. and manages the company’s lending division. In addition to presenting webinars and seminars, he contributes to capital planning, strategic planning, and other management consulting services. He also focuses on topics related to credit risk management, and assists clients with loan reviews, ALLL reviews, credit process reviews, and other lending-related services.
Tommy joined Young & Associates, Inc. from the Bank Supervision Group at the Federal Reserve Bank of New York, where he focused on credit risk management practices at supervised institutions. His work focused on the ALLL, stress testing, and risk monitoring and reporting practices. Prior to his time in bank supervision, Tommy worked in the Federal Reserve Bank of New York’s Research Group. Tommy holds a Bachelor’s in Economics from Wittenberg University.