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What You Should Know About the Advantages and Pitfalls of Loan Participations

Loan participations can employ idle cash and assist financial institutions in building their loan portfolios when loan demand is weak. However, there are several pitfalls that can offset the benefits of loan participations.

Upcoming
Monday, April 14th, 2025
1:30 pm - 3:00 pm
Presented by Jeffery Johnson
$299.00 or 1 Token

Includes: Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts

  • Accounting/Reporting
  • Commercial/Business Lending
  • Lending
  • Lending Compliance
  • Bank Legal Counsel
  • Board Member
  • Branch Manager
  • Commercial Lender
  • Compliance Officer
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  • Credit Analyst
  • Internal Auditor
  • Loan Closer
  • Loan Operations Manager/Specialist
  • Private Banker
  • Small Business Lender
  • Training Manager
  • Trainer

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At the time an institution enters into a lending arrangement with a borrower, or some time thereafter, it may wish to sell a portion of the loan to another institution. On the other hand, there may be instances where an institution may wish to purchase a portion of a loan made by another institution.

Such a sale or purchase may occur in connection with short-term borrowings, term loans, construction loans, or other forms of extension of credit. This area of lending is closely monitored by regulators because of the inherit risk in this type of lending and institutions’ failure to take the necessary precautions to avoid undue problems.

This course is designed to provide the basic requirements for successful loan participations or syndications. The information presented in this session will be helpful to institutions buying/selling participations among affiliate institutions or to unrelated institutions.

At the end of this session, the participant should have a firm understanding of the minimum required standards to purchase and sell loan participations or participate in loan syndications in order to remain in compliance with safe and sound banking practices.

What You'll Learn

  • Purpose of Loan Participations and Basic Rules
  • Difference Between Loan Participations and Loan Syndications
  • Regulatory Rules Governing Loan Participations
  • Role of the Originating Institution and its Relationship with Participating Institutions
  • Legal Rights of Participating Institutions
  • Review of the Certificate of Participation and Other Required Legal Documentation
  • Basic Operational Procedures Required for Loan Participations
  • Review of Financial Accounting Standard Governing Loan Participations

Who Should Attend

This session is ideal for chief executive officers, chief operating officers, loan committee board members, senior credit and lending officers, commercial loan officers, small business loan officers, loan review personnel, staff accountants, and credit administration personnel.

Jeffery Johnson

Instructor Bio

Jeffery W. Johnson started his career with SunTrust Bank in Atlanta as a Management Trainee and progressed to Vice President and Senior Lender of SouthTrust Bank and Senior Vice President and Commercial Banking Division Manager for Citizens Trust Bank of Atlanta.

Most of his career has been spent in Credit Administration, Lending, Business Development, Loan Review, Management and Training & Development. He has managed loan portfolios representing a cross section of loan types including: Large Corporate, High Net Worth Individual, Middle Market Companies, Small Business, Real Estate and Non-Profit Organizations.

Mr. Johnson is now a training professional in the financial industry by leading various seminars covering important topics relating to issues in financial institutions. He teaches actively for fifteen state banking associations in the United States, Risk Management Association (RMA) and individual financial institutions nationwide. He co-authored a training course entitled "Lending to Service and Other Professional Organizations" for RMA in 2001.

Mr. Johnson earned a B.A. Degree in Accounting from Morehouse College in Atlanta; a MBA in Finance from John Carroll University in University Heights, Ohio; Banking diploma from Prochnow School of Banking at the University of Wisconsin and a Graduate Certificate in Bank Management from the Wharton School of Business at the University of Pennsylvania.

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