Bank Analysis School

Internal Use Only

Lending Concentrations can Increase Risk

Concentrations are not inherently bad but do add a dimension of risk which management should consider when formulating plans and policies. ” - FDIC Risk Management Manual

19

Internal Use Only

Learning Objectives

1 – Importance and Impact on Other Components

2 – Asset and Loan Categories

3 – Asset Classification / Problem Assets

4 – Allowance for Credit Losses