2
Why Businesses Borrow Money
• Working capital financing
• Real Estate and capital expenditures
• Start-ups, buyouts, and bridge loans
• Funding losses
Breaking into Banking 101:
Fundamentals of Commercial Banking
This 10-module online course is broken into easy-to-digest lessons covering everything you need to know to get hired, start quickly, and advance in your new career. Andy gives you the inside scoop on what banks really want from you and how you can immediately differentiate yourself from others new to the industry.
Focusing on the reality of the banking world over textbook portrayals of the business, this course will equip you with key concepts and banking terminology and will show you how it all fits together.
Each module includes a video lesson, a multiple-choice self-check, and optional follow-up assignments for further learning. Includes a 21-page Reference Guide (pdf).
The 101 course is appropriate for newer credit analysts, lenders, portfolio managers, statement spreaders, loan operations associates, interns, and anyone whose job relates to commercial credit and lending.
Introduction and Overview
Course Modules
Get Breaking into Banking 101
Ten 30-Minute Lessons - 5 Hours Total
1
The Business of Banking
• Why customer relationships matter
• Identifying and managing risk
• Net interest income versus fee income
3
The Art of Underwriting – Part I
• Commercial risks vs. consumer risks
• Accepting and managing risk
• Qualitative Analysis
4
The Art of Underwriting – Part II
• Crunching the right numbers
• Balance Sheet: liquidity and leverage
• Income Statement: margins and coverage
Bonus Content: Audio interview with industry expert Lynne Sciulli about “Why Financial Accounting Matters to Commercial Bankers”
5
Loan Structuring – Part I
• Types of loan facilities
• How pricing really works
• Tenor and amortization
6
Loan Structuring – Part II
• Mitigating risk: collateral, covenants, and guarantees
• Negotiating the deal
• The sixth “C” of Credit: competition
7
The Credit Approval Process
• Courting your customers
• Selling the deal twice
• Paperwork, paperwork: loan documentation
Bonus Content: Audio interview with industry expert Linda Comerford about “Business Writing and Presentation Skills for Bankers”
8
Loan and Portfolio Monitoring
• Regular check-ups with existing customers
• Portfolio metrics and expected loss
• Report cards: asset performance
9
The Complex Lending Machine
• Meeting the neighbors
• Specialty banking
• Government regulators
10
Test Drive Your Job
• A day in the life
• Career paths
• How to love your job
Bonus Content: Audio interview with industry expert Harlan Hill about “The Importance of Continuous Learning in Commercial Banking”
Breaking into Banking 201:
Analyzing Repayment Sources
This 9-module online course is a “sequel” to the 101 course and is best taken after completion of that course, though it is not a prerequisite. The 201 course dives deeper into topics covered in modules 4, 6, and 8 of the 101 course: analyzing a borrower’s balance sheet, income statement, collateral, and risk ratings.
Each module includes a video lesson and a multiple-choice self-check. Many of the lessons include exercises for learners to work through that are related to a sample company outlined in the course’s 13-page Reference Guide (pdf).
This course is most appropriate for credit analysts, lenders, portfolio managers, and others who need skills in financial statement analysis and writing credit documents.
Introduction and Overview
Course Modules
1
Introduction and Overview
• Outline of course objectives and topics
• Understanding primary and secondary repayment sources
• Why banks need accurate loan data to estimate credit losses
2
Balance Sheet Analysis, Part I – Analyzing Liquidity
• Better definitions of assets, liabilities, and equity
• Measuring liquidity: beyond formulas and ratios
• Quality of current assets
3
Balance Sheet Analysis, Part II – Analyzing Leverage
• The difference between debt and equity
• How to measure leverage
• Highly leveraged lending
4
Income Statement Analysis, Part I – Revenues and Profit Margins
• Analyzing revenues: growth and drivers
• Keys to analyzing gross margin and operating margin
• Why Return on Assets matters
5
Income Statement Analysis, Part II – Coverage Ratios
• Explanation of fixed charges
• EBITDA as a proxy for cash flow
• Measuring debt service coverage and fixed charge coverage
6
Collateral Analysis, Part I – Non-Current Assets
• Why bankers need a back-up plan
• Commercial real estate as collateral
• How to evaluate fixed assets
7
Collateral Analysis, Part II – Trading Assets
• Understanding self-liquidating collateral
• How to assess the value of inventory
• Analyzing a borrower’s Accounts Receivable
8
Collateral Analysis, Part III – Solving the Problems
• Understanding Accounts Receivable Aging reports
• Borrowing base formulas and certificates
• Unsecured and under-secured loans
9
Risk Ratings, Expected Loss, and Provision for Credit Losses
• Assessing an obligor’s likelihood of repayment
• Dual risk ratings and expected loss
• Provision for Credit Losses and why it matters
Get Breaking into Banking 201
Nine 20-Minute Lessons - 3 Hours Total
Breaking into Banking:
Fundamentals of Commercial Real Estate
This 5-module online course introduces the learner to the basics of commercial real estate lending. Topics include types of commercial properties, repayment sources for each, the three methods of appraising commercial properties, environmental considerations, and site assessments. The course assumes little prior knowledge and includes multiple-choice self-checks after each module for reinforcement, and a personalized Completion Certificate.
This course is most appropriate for credit analysts, lenders, portfolio managers, and others who have at least a basic understanding of C&I lending and now want to be better prepared to work on transactions secured by commercial real estate. Prior completion of Breaking into Banking 101: Fundamentals of Commercial Banking and Breaking into Banking 201: Analyzing Repayment Sources is recommended, but not required as prerequisites for this course.
Introduction and Overview
Course Modules
1
Introduction and Overview
• Outline of course objectives and topics
• How CRE lending is different from C&I lending
• Unique features of the CRE asset class
2
Types of Commercial Properties, Part 1
• Owner-occupied: examples and repayment sources
• Real estate holding companies
• New construction: multi-draw and mini-perm facilities
3
Types of Commercial Properties, Part 2
• Various types of investment properties
• Types of commercial leases and how they work
• Rent rolls, NOI, LTV, and OREO
4
Methods of Appraising Properties
• Cost approach: types of depreciation and entrepreneurial profit
• Market approach: the theory of substitution
• Income approach: cap rates and discounted cash flow analysis
5
Environmental Issues
• Contamination of soil, water, and buildings
• Wetlands and floodplains
• Due diligence: environmental site assessments
Breaking into Banking
for Interns
Unlike our other courses that are appropriate for various different audiences of learners, this course was created specifically for college students hired by banks for internships. It assumes no prior knowledge of the subject matter.
The banking industry needs fresh, creative young people to fill the talent gap created by the imminent retirement of many senior executives. It is also a complex field, so as banks recruit college students for internships, the banks must provide not only meaningful work, but also simple, clear training resources for those interns. This course was created specifically to meet that need, and includes a brief overview of retail banking, with a focus on commercial credit and lending. It is an ideal primer for those considering banking as a career.
Introduction and Overview
Course Modules
1
Introduction and Overview
- Course objective
- Intended audience
- Outline of content
2
A Bank’s Relationships with Its Customers
- Relationships with individuals (consumers)
- Small, medium and large businesses
- Product partners
3
Risk and Underwriting
- Types of risks banks face
- Explanation of underwriting
- Comparing consumer vs. commercial
5
Groups Interns Interact With
- Credit and Lending
- Loan Operations and Portfolio Management
- Managed Assets and Government Regulators
4
What Credit Analysts Do
- Industry research
- Customer calls
- Writing Credit Approval Packages
6
Conclusion: Wrap-Up and Summary
- Banking is a “people business”
- The talent gap in banking
- Opportunities for interns