Credit Evaluation School Instructor eBook - Oct 2023

People:

Borrower: Medical Associates of San Helena, LLC (MASH) Guarantor: Hawkeye Pierce, MD (100% owner) Fully amortizing 25 ‐ year term note to buy out retiring partner • 1st lien on medical practice real estate @ 95% LTV • Closely held shares of business • Dr. Pierce's Guaranty New customer who only banked with this bank due to the low rate offered 202x debt service coverage ratio (DSCR) of 2.75x

Purpose: Payment: Protection:

Problem:

Prospects:

Potentially a very profitable relationship for the bank

Commercial Credit Quick Hitter – Pass with high LTV Ask students what has changed since the previous slide: Term increased from 15 ‐ year to 25 ‐ year

DSCR increased from 1.35 to 2.75 LTV increased from 80% to 95% Is this still a pass? Why or why not? Discuss LTV restrictions and reporting.