This course instructs on financial and cash flow analysis specifically to industry, business and management risk issues, and enables participants to effectively review a loan request. Through a mix of small and large group activities, and active discussions, participants are better prepared to apply the content learned when they return to their jobs.

Upon completion of Cash Flow Analysis II: Applied Concepts, participants will be able to: 

• Assess borrower performance through financial statement analysis
• Construct and analyze historical and projected cash flow statements
• Identify and analyze the financial impact of management decision-making and business and competitive factors on loan repayment from cash flow
• Use the results of both qualitative and quantitative analysis to make appropriate credit decisions  

Cash Flow Analysis II: Applied Concepts is designed for senior credit analysts, loan review personnel, and experienced commercial lenders as well as other commercial banking professionals who need to acquire an advanced understanding of cash flow and how it helps

determine a borrower’s ability to repay loans.

This course is structured for individuals who are acquainted with financial accounting principles and who have prior formal training in the construction of the cash flow statements.

In this Seminar, the following basic financial statement analysis areas will be covered in a cohesive and focused manner:

• Taught in a unique approach that doesn't focus solely on numbers.
• The balance sheet equation
• Understanding the format and structure of the balance sheet
• Defining account titles
• Structure of the income statement
• Relationship between the balance sheet and the income statement

Most community banks have a significant portion of their commercial loan portfolio in commercial real estate loans. CRE contains its own unique set of risks. This course is designed to assist the credit analyst in developing skills to deal with more complex CRE credits.



Underwriting provides a best-practices approach to quantifying cash flows of various styles of Commercial Real Estate property for underwriting. Topics include 1) the analytics necessary for a unified analysis for loan consideration, including measuring cash flow for debt service and assessing quality of its sources, 2) the lease review process 3) alternative methods to reach a valuation, 4) testing loan performance under adverse conditions, and 5) creating a loan structure that helps preserve cash flow. Through a mix of small and large group activities, case studies, and active discussions, participants are better prepared to apply the content learned when they return to their jobs.

Upon completion of Commercial Real Estate Lending II: Underwriting, participants will be able to: 

• Name inherent risks to CRE loan performance and apply strategies to discover and quantify these risks
• Interpret the economic and business characteristics of a lease and explain how those characteristics influence both expected net cash flow and lending risks
• Describe an appraiser’s valuation process for commercial real estate property, including variances that can be caused by property performance, and the challenge in using market valuation for owner-occupied properties
• Analyze extraordinary lease terms and apply effective-rent analysis to quantify their impact on cash flow and value
• Perform breakeven, stress, and sensitivity analyses to test loan performance under adverse conditions
• Apply best practices for loan structure terms and covenants to support the primary drivers of CRE performance



Commercial Real Estate Lending II: Underwriting is designed for practicing commercial loan officers and other lending or credit professionals who need to understand more complex real estate lending concepts. In general, these bankers should have two to three years of experience.

Participants are expected to have a basic understanding of commercial real estate lending and loan underwriting or to have completed RMA’s Commercial Real Estate Lending I: Introduction or Real Estate Lending Academy.

This Class is based on the "What & Why" of how to select documentation , secure collateral , and structure loans to achieve your credit risk management goals. The advanced course will address, in part, specialized areas of lending. Some of them covered are as follows:

• Forbearance Agreements
• Purchase money security interest
• Ground leases
• Municipal and school district loans
• Business Loan Agreement
• Letters of credit
• Inter-creditor agreements
• Subordination Agreements
• Land Contracts
• Factoring
• CRE Construction loans
• Common Loan Structuring errors
• The "Three P's" of secured lending
• Elements of secured lending
• UCC Filings "First in Time, First in Line"

Identifying the risk in each of the above circumstances , along with the structuring and documentation necessary to address the risk. This course will expand your knowledge of credit structure tools that will reduce your credit risk risk exposure. In addition, it will increase your ability to discuss and present various documentation/structure options to loan committees and borrowers.

The objective of this course is to provide informative, practical guidance related to the creation of more effective written loan presentations. It is also the cap stone course for the Advanced Credit Analyst Series. 

Participants learn the 14 essential elements necessary to produce effective loan presentations:

• Data or Narrative orientation
• Length
• History and primary function of business
• Loan Purpose
• Loan Structure and repayment source
• Collateral
• Risk Rating Basis
• Narrative Financial Spread Analysis
• Industry analysis and comparative information
• Cash flow analysis
• Management evaluation
• Evaluating projections
• Analysis of guarantors
• Policy or procedure exceptions

Loan Presentations that are vague or incomplete leave an impression that a bank's credit risk administration is weak. This is particularly an issue given the bank regulators' focus on bank credit risk process. The reasons for the creation of loan presentations and who the users are will also be discovered.

Participants will develop their understanding of the 14 essential elements via review and discussion of in- class examples. The final activity of the day will be for each participant to do a self evaluation of one of their own bank's loan presentations.    [Results not to be shared]