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Loan Review Certificate Program

Loan Review Certification Process

Step 1: Certificate Course I or Take The Proficiency Test

Please note that the Certificate Application fee must be paid before ordering the Proficiency Test or Case Study Final Extension Problems. Courses may be taken without participation in the certification program.

Certificate Course I is required for those with three years (or less) experience in one or a combination of commercial lending, loan review or as a bank examiner. Financial statement analysis skills are a prerequisite for attending Loan Review Certificate Course I.

A proficiency test is available for those with three years of experience in either one, or a combination of, commercial lending and loan review, or as a bank examiner. This enables participants to bypass Loan Review Certificate Course I and enroll directly in Loan Review Certificate Course II.

The Loan Review Certificate Course I Proficiency Test is a 150 question exam designed to determine the skill level of loan reviewers who wish to bypass Loan Review Certificate Course I and enroll directly in Loan Review Certificate Course II. The exam, requires 75% to pass, covers:

• Loan review policy and procedures
• Financial statement and cash flow analysis
• Loan documentation
• Collateral evaluation
• Loan classifications

Certificate Course I
Loan Review Certificate Course I is a three day introductory course normally offered twice a year. Topics covered include:

• Purpose of Loan Review - What is it? - Who needs it? - Who does it?	• Characteristics of a Sound Loan Portfolio - Credit policy - Loan administration	• Loan Review Procedures - Define objectives - Grading system - Selection process
• Identifying and Evaluating Sources of Repayment - Business cash cycle - Analyzing cash flow/SFAS 95	• Evaluating Collatera - Establishing loan-to-value - Real and personal properties	• Loan Classification Systems - Regulatory guidelines - Risk rating system criteria
• Loan Documentation - Credit underwriting standards - Uniform Commercial Code	Management of Loan Analysis and Loan Review Functions Staffing - Structuring and reporting	• Report Writing and Interpersonal Skills for Loan Review - Current Topics for Loan Review
• Problem Loan Management Issues - Problem loan administration - Action plan development - Troubled debt restructuring	• Regulatory Viewpoint -OCC and FDIC	• Current Topics (Case studies will be used frequently in both courses.)

Step 2: Certificate Course II

Loan Review Certificate Course II is a four day advanced course also normally offered twice a year. Topics covered include:

• Credit Risk Management - Determining risk tolerance - Risk supervision - Risk monitoring - Structuring of an effective risk management process	• Role of Loan Review - Loan policy compliance - Early warning - Quality control	• Assessing Loan Quality - Industry analysis - Economic conditions - Financial performance
• Reporting Procedures - To whom are you reporting? - Objectives and scope - Conclusions and recommendations	• Loan Loss Reserve - Interagency policy - BC 201 - FASB 114	• Problem Loan Management Issues - Problem loan administration - Action plan development - Troubled debt restructuring
• Regulatory Viewpoint - OCC and FDIC	• Current Topics	(Case studies will be used frequently in both courses.)

Step 3: Certificate Final Examination
(Case Study Extension Problem)

The purpose of the final examination is to evaluate your understanding and grasp of all of the loan review principles and practices discussed in the certificate courses. You will be given a number of case studies upon which you must perform an analysis on a credit process, loan portfolio analysis and loan documentation. Your analysis must utilize a formal loan review format supported by a written analysis/narrative on each case. You will have eight weeks to complete the examination. There are three possible grades for the certificate case problem: High Pass, Pass, and Unsatisfactory.

The following areas are tested:

• Individual Loan Evaluations
  - Risk assessment
  - Loan grading and classifications
• Loan Portfolio Analysis
  - Risk assessment
  - Administration
  - Loan loss reserve allocation
• Credit Process Review
• Written Communication Skills

Award of the Certificate in Loan Review

The certificate will be awarded to those who successfully complete steps one through three. This signifies that the individual has attained a level of expertise in loan review that is recognized as the industry standard.

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