Credit Evaluation School Instructor eBook - Oct 2023

Internal Use Only

INDIVIDUAL LOAN FILE REVIEW As we work through the files and identify the 6 P’s of credit, we are looking for:

• Problem credits (may not yet be identified) • Past due loans (is management manipulating) •Credit documentation exceptions • Violations of laws/regulations/policies •Concentrations of credit • Evidence of self-dealing loan transactions

• Again, this is not an all ‐ inclusive list, but definitely hits the more prevalent items. • Bankers do not like to have examiners downgrade credits as it casts doubt on their ability to objectively self ‐ identify problems. • Management can manipulate the past due status by doing things like extending without the full collection of interest.