FDIC review & mandates from the Dodd-Frank Act

In a recent issue of the Corn & Soybean Digest, the changing environment for agricultural lenders was summarized at the 59th ABA National Agricultural Bankers Conference in Indianapolis, IN.

1. Portfolio concentration
2. Exposure to economic shock under various scenarios
3. Evidence of profit, liquidity, working capital, and collateral
4. Break-even analysis and owner draws
5. Accrual adjustments to tax records

Sounds a lot like the Four C's of Credit.  Of course, the ultimate back-stop is the Fifth "C" of Credit, which might involve engaging a Competent appraiser, the Sixth "C" of credit.

1. Character
2. Capacity
3. Capital
4. Conditions
5. Collateral
6. Competent Appraiser (Geography, market, and intended use are possible factors for consideration.)

Some topics are probably good for one's entire career in business.

Ciao!