5 Class Hours

Instructor: Ellen Sharp

Maintaining asset quality is the most important task you face. Managing the credit function in terms of underwriting, on-going review and administration is critical but you will have troubled loans and all the costs, abuse of Bank capital and lawsuits bad assets generate. Maximizing recovery, protecting capital, and minimizing expenses and legal exposure will determine your bank’s success. Asset quality determines your regulatory credibility and the future of your bank and your career.

Course goals and objectives include:

  • Bring professional, objective management to the subjective “witchcraft” of special asset management and work outs.
  • Don’t get mad at your own money!
  • Be professional and employ objective, scientific exit strategies after you have carefully analyzed the debtor’s environment and situation. Understand the Regulators’ analysis, and understand the “recipe for success” in workout strategies, and standards.
  • Organize for success, manage your personnel resources. Segregate the Bank in terms of reporting, management of specific assets, and continued marketing and growth of the Bank’s profitable relationships.
  • Manage all the constituents of the troubled asset relationships: the borrower, the market, the public and the regulators. There are four distinct parties involved in each work out: the borrower, the bank, the borrower’s counsel and the Bank’s counsel. Each must be well managed and each have sometimes very different agendas and end goals.
  • Become diagnostic and look for mutually acceptable solutions! Work out management is essentially venture capital and demands innovation, aggressive ideas, guts, and stamina.
  • The most important constituent is regulatory credibility! Without the confidence and trust of the regulators, you and your Bank will not maximize your work out efforts. A “no surprise” environment is critical!


Annual School Session

Second Year Elective Course

Competency: Lending