Bank Analysis School April 2025

Internal Use Only

Basic Facts: • XYZ Corp. has an equipment loan that is severely past due. • Review of the company’s financials reveals that sales have dropped significantly, and the business is reporting losses. • The equipment securing the loan was independently valued at $110,000 one month ago. • The loan balance is $120,000. How would you classify this loan? (Zoom Poll) Loan Classification Decision #1 (XYZ Corp)

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Internal Use Only

Loan Classification Decision #2 (Smith Farming)

Basic Facts: • Smith Farming, LLC has an equipment loan that is severely past due. • The operation has been unsuccessful, and a farm sale is being held next month. • The last financial statement indicates the equipment securing the loan is worth $300,000; however, it is unknown how much the auction will bring. • The loan balance is $300,000.

How would you classify this loan? (Zoom Poll)

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