Careers in Commercial Banking

Question 1

Commercial Banking’s target market

Answer 1

> $5MM,

Question 2

Purpose of Commercial Borrowing

Answer 2

Tech Companies
Ag Enterprises
Manufacturers
Retailers
Wholesalers
Restaurants
Professional Services Firms
Medical Professionals

Question 3

Credit Facility

Answer 3

A loan from an institution to a borrower

Question 4

Functions of a Commercial Bank

Answer 4

Hold Money

• deposits, long term or operating
• treasury functions

Move Money
-ACH, Wires, online payments/credit cards

Lend Money

• to generate interest income
• to retain customers

Question 5

The purpose of a commercial bank

Answer 5

To analyze credit risk and underwrite commercial credit facilities

Question 6

7 roles of commercial banking

Answer 6

Relationship Manager (loan officer)
Credit Analyst 
Credit Associate
VP Commercial (director)
Workout Banker
Adjudicator (credit management/approval)
Fulfillment Officer

Question 7

Relationship Team Members

Answer 7

Relationship Manager (loan officer)
Credit Analyst
Credit Associate 
VP Commercial (director)
Workout Banker

Question 8

Middle Office Team Members

Answer 8

Workout Banker

Adjudicator (credit management/approval)

Question 9

Back Office

Answer 9

Fulfillment officer

Question 10

Responsibilities of the Relationship Team

Answer 10

Underwiring client needs and understanding/communicating bank guidelines and policies to the client and their finance team

Deliver strong growth and positive financial results

Question 11

Skills of the Relationship Team

Answer 11

Strong credit acumen
Sales ability
Quality Service
Negotiation
Communication
Underwriting

Question 12

Two Step Relationship Manager (loan officer) start

Answer 12

1) Assigned a book of commercial clients. goal to extend further credit or support, optimize cash collections and disbursements, and offer complimentary service

2) Responsible for growth of that book.
- cold calls/networking
- building a referral network of lawyers, accountants, or brokers to funnel opportunity

Question 13

Relationship Manager Skills

Answer 13

Strong Credit Acumen
3-5 years supporting commercial roles
Terrific negotiation and people skills
Multitasking

Question 14

The morning of a Relationship Manager

Answer 14

Reviewing the morning overdraft report to ensure understanding and resolution of overdrafts caused by the clearinghouse or other factors.

Question 15

Non-funding days of the Relationship Manager

Answer 15

Take clients out to lunch to thank them for their business and dine with influencers such as accountants, lawyers, and brokers

Question 16

Off-site engagements for Relationship Managers

Answer 16

Check up on equipment and collateral, attend networking events, and host/attend sporting events

Question 17

Skills of a Credit Associate

Answer 17

Multitask
Manage time effectively
Prioritize
Make each client feel like they're the Bank's top priority
Patient
Proactive
Great listener

Question 18

Responsibilities of a Credit Associate

Answer 18

Facilitate large payments for the clients
Order Checks/resolve credit card problems
First Point of contact for day-to-day client needs
Responsible for onboarding new clients

Question 19

What do Credit Associates typically lack?

Answer 19

Institutional knowledge and credit experience required to work as a relationship manager

Question 20

Morning of a Credit Associate

Answer 20

Take calls on behalf of the relationship manager

Set up profiles and accounts for new clients

Question 21

Credit Associate’s Market Intelligence factors

Answer 21

Rate changes
Tech developments and their potential interaction with clients
New products or service offerings
Schedule client pricing reviews

Question 22

Responsibilities of a Credit Analyst

Answer 22

Support the transaction structuring process for new and existing clients
Work with existing clients to gather reporting and monitor covenants
Review industry specific policies and institutional guidelines relevant to each deal

Question 23

Skills of a Credit Analyst

Answer 23

Strong understanding of accounting principles and financial acumen
Strong grasp of the economy
Reflective, knowledgeable, curious
Have an eye for detail

Question 24

What are the two types of Credit Analysts?

Answer 24

1) junior staff. To learn the bank’s systems and processes. Usually fresh out of school
2) tenured commercial banking professionals. They do not want the lifestyle or targets tied to being a relationship manager.

Question 25

Morning of a Credit Analyst

Answer 25

Review the status of current deals

Spend time on the phone and answering emails to sort through specific questions or concerns

Question 26

Daily focus of a Credit Analyst

Answer 26

Growth of the institution
Annual Reviews
Seasonal congestion due to annual reviews

Question 27

Does the Credit Analyst typically travel with the relationship team?

Answer 27

yes, to conduct inspections, learn about new money transaactions, and ensure compliance with regulatory bodies

Question 28

Responsibilities of VP - Commercial

Answer 28

Authority on pricing or exceptions
Support challenging negotiations
Oversee onboarding and employee growth

Question 29

Skills of VP - Commercial

Answer 29

8-10 years banking experience, typically a leader, teacher, or mentor first
Strong credit skills and financial acumen to navigate challenging relationships and negotiations

Extremely organized and understands the bank more holistically than a RM on an enterprise level

Question 30

Morning of a VP - Commercial

Answer 30

Spend time in Meetings
Progress updates with individual team members
Follow-along on deals in progress

Question 31

VP - Commercial Business Dev initiatives

Answer 31

Leverage long-time community relationships to generate partnerships or referral business

Advisory work with local organizations
Network with senior executives from other bank divisions
Spend time keeping up with the community initiatives

Question 32

VP - Commercial’s time spent with the relationship team

Answer 32

Conduct Site Visits

Sponsor events to thank big clients and generate goodwill with prospects

Question 33

Purpose of Middle and Back OFfice

Answer 33

To manage risk and secure collateral through assistance with legal counsel

Question 34

Responsibilities of a Workout Banker

Answer 34

Renegotiations in the case a loan goes bad. A more hands-on approach to reach alternative payment strategies for bad debt

Question 35

Skills of a Workout Banker

Answer 35

Approach situations carefully- it is stressful for all those involved
Modeling and accounting skills
Understanding the legal process in liquidation scenarios
Patient
People Skills
Calm and logical
Legal Background

Question 36

Dangers of liquidation to a Business

Answer 36

It is unlikely a business will continue if assets are sold off
The Bank may have to write off principle if the loan isn’t fully recovered

It is in everyone’s best interest to negotiate and work it out

Question 37

Workout Banker Days

Answer 37

Daily/Weekly Updates and reporting
Archive every piece of communication to ensure the legal enforceability of agreements
Paramount to maintain clear communications

Question 38

Skills of a Credit Adjudicator

Answer 38

Expert in Credit
Patient
Deliberate
Financial acumen and skilled in modeling
5+ years of credit.  typically more

Question 39

A day for a Credit Adjudicator

Answer 39

Review transaction targets per day depending on size and complexity.

Question 40

Review process for a Credit Adjudicator

Answer 40

Print the entire file

Cross reference application and due diligence with supporting documents

Question 41

‘Break in Flow’

Answer 41

Causes customer negativity when the Adjudicator must request additional information through the credit analyst or RM

Question 42

Fulfillment Officer

Answer 42

Credit/Loan Admin

Produces documents, files security agreements, advances loan funds, and reviews loan files before advancing.

Question 43

Core Components to Institutional Revenue

Answer 43

Retail Banking
Wealth Management
Capital Markets & Investment Banking
Commercial Banking

Question 44

A strong commercial career can lead to…

Answer 44

Private or non-traditional lending roles
Advisory roles within finance teams
Becoming a loan broker