Bankers Bank of Kentucky’s Credit Conference: Participation Lending: The Good, the Bad and the Regulatory Risk

April 11–13, 2018

Topics Discussed:

Financial institutions can use loan participations as an integral part of their balance sheet strategies. Has your institution considered loan participations? What are some of the biggest concerns that your leadership team has when it comes to "pulling the trigger" on becoming a loan participant? Properly managed loan participation programs can be beneficial to financial institutions, whether they're buying or selling loans. Loan participations may provide selling financial institutions with a mechanism to manage regulatory limits, interest rate, liquidity, credit and geographic concentration risks, as well as an enhanced ability to serve customers. Financial institutions buying loan participations may benefit from diversifying their balance sheet, using excess liquidity, and increasing revenue. Whether selling or buying, financial institutions have similar risks in monitoring and managing loan participations. Selling financial institutions’ risks are centered in regulatory compliance, full disclosure, and credit administration. Buying financial institutions’ risks are centered in risk assessments, strategic planning, due diligence, contracts and legal review, underwriting credit risk, and internal controls. Our panel of experts will go into detail and answer your questions about the compliance and due diligence responsibilities for both lead and participating institutions.