Bank Analysis School September 2023 - Presentations & Resources

Internal Use Only

Asset Classification

Pass

No or limited concerns

Special Mention

Criticized but not classified

Substandard

Doubtful

Adversely classified

Loss S E V E R I T Y

29

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? Loan Classification Decision #1 (XYZ Corp)