Posted by Ed O'Leary in Talking Credit
MEMO from the CEO to the CCO:
Let’s have a serious discussion on account reassignments and the establishment of a workout function after Loan Committee on Friday. I’d like your thoughts on our current credit staffing needs and how we might constructively use the new people (I don’t like our tendency to call them “trainees,” given what we’re likely to expect of them in coming months). Also, I’d like us to consider whether we need one or more external hires of experienced credit people. If we think we should do the latter, what sort of skill sets should we be looking for?
MEMO from the CCO to the CEO:
I’m ready to start a workout function. We’ve got to put the best credit people we have into it and use one or two of our new junior staff to do much of the support work. This will fast-track their learning and utilize their energy and enthusiasm. We can justify dedicating two experienced people and two trainees. I am aware of a relatively young retired examiner from FDIC who might be ready to come back to work either on a long-term basis or for the interim of the current credit problems.
MEMO to the CCO from the CEO
Go ahead and determine the level of possible interest the former FDIC examiner might have in coming to work for us. That would plug a possible hole we have in our overall experience level and give us some bench depth at an important time.
MEMO to CEO from the CCO
One of the first things we have to decide is whether we are going to try to “work with” or “work out” our problem customers.
MEMO from the CEO to the CCO:
Let’s make a clear and clean distinction between the truly problem assets and those that are not, to include a separate loan approval process. To the extent that we can, let the lenders with the clean portfolios not also be working on seriously criticized assets. That makes their jobs harder and they can easily forget whether it’s time to wear the white hat or the black hat.
Veteran lender and workout expert O'Leary spent more than 40 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending.
O'Leary began his banking career at The Bank of New York in 1964,
and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He
served as a faculty member and thesis advisor at ABA's Stonier Graduate
School of Banking for more than two decades, and served as long as a
faculty member for ABA's undergraduate and graduate commercial lending
Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses and a frequent speaker in ABA's Bank Director Telephone Briefing series. You can hear interviews with Ed about workouts here . You can e-mail him at firstname.lastname@example.org. O'Leary's website can be found at www.etoleary.com