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Lending to Non-Profit and Religious Organizations

This course will cover the major lending risks related to this type of financing and discusses how a bank can prudently manage these risks by exposing participants to the appropriate methods of analyzing and lending to Non-Profit Organizations and Religious Organizations.

OnDemand
Recorded Friday,
May 7th, 2021
Presented by Jeffery Johnson
2h total length
2.5 CEU Credits
$279.00 or 1 Token

Includes: 30 Days OnDemand Playback, Presenter Materials and Handouts

  • Lending
  • Branch Manager
  • Commercial Lender
  • Compliance Officer
  • Consumer Lender/Retail Banker
  • Credit Analyst
  • Customer Service Representative
  • Loan Closer
  • Loan Operations Manager/Specialist

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Non-Profit Organizations (“NPO”) generally comprise a smaller percentage of outstanding loans on the books of community banks however, they represent a risk that are quite unique. Bankers are not required to become an expert in this type of lending because the number of opportunities are few however, when you are approached with a request, you must know how to underwrite them. Most of these loans are extended to Non-Profit Organizations and Religious Organizations.

The skills required to understand and underwrite the credit risks involved in this type of lending is quite different from lending to For Profit Organizations. Unlike conventional loans, Non-Profit Organizations and Religious Organization loans have a higher risk level because they are typically un-guaranteed; the collateral is considered “Special Purpose” with limited resell value; the primary source of repayment is dependent upon contributions from donors and parishioners whose behavior is often volatile due to a disagreement of the organization’s direction or support is affected by a weak economy. Another risk factor includes financial statements that may not follow Generally Accepted Accounting Procedures.

This course will cover the major lending risks related to this type of financing and discusses how a bank can prudently manage these risks by exposing participants to the appropriate methods of analyzing and lending to Non-Profit Organizations and Religious Organizations.

This course will also review Statement of Financial Accounting Standards 117 (now Accounting Standards Codification 958) Required Financial Statements Presentation for NPOs). This Standard replaces Fund Accounting, which was used previously by NPOs for many years.

Covered Topics

After completing this course the participant will be able to:

  • Identify and understand the primary differences between the accounting principles for NPOs and the accounting principles for FPOs.
  • Identify the basic information required to analyze Non-Profit and Religious Organizations
  • How to Analyze the financial statements and other information available from Non-Profit and Religious Organizations
  • Utilize key ratios used specifically for Non-Profit and Religious Organizations
  • Identify the risks of lending to Non-Profit and Religious Organizations
  • Structure loans to minimize the risks associated with lending to Non-Profit and Religious Organizations

Who should attend

Commercial Loan Officers, Consumer Loan Officers, Senior Credit Officers, Loan Review Officers, Compliance Officers, Branch Managers, Credit Analysts, Loan Support 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.


Credit Information

Recommended for 2.5 CEU Credit Hours. After attending this webinar, each attendee can receive a Certificate of Attendance for self-reporting of CEU Credits.