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Credit Engineering for Bankers, 2nd Edition by Johnathan Mun, Morton Glantz

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Chapter 11 Recognition, Diagnosis, and Response to Troubled Loans

Chapter Outline

  • Financial Distress Models 271
    • Altman’s Z Score 271
  • Other Models 275
  • Loan Classification 276
    • Specially Mentioned Loans 277
    • Substandard Assets 277
    • Doubtful Assets 277
    • Loss Assets 278
    • Partially Charged-Off Loans7 278
  • The Classified Loan Write-Up 278
  • Workout 279
    • Follow-Up Procedures and Documentation 280
      • Obtain a Properly Signed Note 280
      • Review Subordination Agreements 280
      • Maintain a Complete Credit File 280
      • Make Sure Guarantees Are in Order and Completely Understood 281
      • Review Uniform Commercial Code (UCC) Filings 281
      • Check for Unencumbered Assets 281
      • Check That Proper Documentation for All Collateral Is in Order 282
  • A Lender’s Liability Help Line ...

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