Credit Evaluation School - June 2022

Loan Classifications – Discussion STUDENT INSTRUCTIONS

INTRODUCTION AND OVERVIEW OF EXERCISE The Line Deck consists of 20 lines. Students should plan on spending up to 8 hours outside of class time between now and the beginning of next Tuesday’s session in reviewing these lines. On Tuesday, 6/21, we will break into your groups for review as a group. On Wednesday, 6/22, students, in the group setting, will be discussing the lines with instructors. The instructors will be playing the part of the loan officer responsible for the credit. 1. A rating (Pass, Special Mention, Substandard, Doubtful, or Loss) will be assigned to each line on the Loan Classifications link. 2. Each student will then write a bullet points writeup using the Loan Write-Up Bullet Points link for one classified line. 3. Lastly, students will complete the Self-Evaluation link. 4. All three of the above links are to be completed no later than 10 AM Eastern on Thursday, 6/23. OBJECTIVES 1. Determine which loans should/should not be discussed with the loan officer. 2. Choose pertinent questions (based on 6Ps) to ask the loan officer regarding each loan to be discussed. 3. Rate loans properly based on discussion and evaluation of loan quality. 4. Evaluate communication skills. * The accuracy of your ratings decisions and communication skills will be evaluated by the instructors. PREPARATION Students will first look through all 20 lines individually and identify the 6Ps for each line. Once students are placed into groups on Tuesday 6/21, the group should use the time to briefly review the lines together and determine which lines need to be discussed with the loan officers. The students will then, as a group, formulate questions for those lines which need clarification and discussion with the loan officers. Students should be prepared to discuss any of the loans in the line deck. GUIDELINES FOR DISCUSSION • Each instructor will act as a loan officer, responsible for specific lines in the deck. The instructors will inform the students which loans are handled by each of the loan officers. • Students should be prepared to discuss any of the loans in the deck. • Each group member must discuss at least one loan before any group member can discuss a second loan. • The group must agree on the loans to be discussed. If a group member wants to discuss a loan that the rest of the group does not want to discuss, that loan may be discussed only if time allows. DISCUSSION AND LOAN RATING MECHANICS The group will have 20 minutes with each loan officer to discuss that loan officer’s lines, followed by a 10-minute break, part of which should be used to finalize any notes taken during the discussion. This will be repeated for four rounds (each group with each loan officer).