Credit Evaluation School - May 2023

Internal Use Only

Management’s Comments, Plans and/or Prospects

Example: Bank management stated that the cause of the current past due status was a temporary cash flow deficiency due to delays in the company’s supply chain that should be resolved in the next six months. They further stated they plan to work with the borrower until they can return to positive cash flow.

Internal Use Only

Management’s Comments, Plans and/or Prospects

Example –Management Disagrees: This relationship is downgraded to Substandard based on apparent insufficient capacity to repay debt, collateral shortfall, no outside sources of income, and lack of meaningful guarantor support. Bank Management disagreed with the classification and stated that all payments have been made as agreed since returning to amortization last month. Management plans to continue to work with the borrowers until they return to profitability.

Pge 17