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Written for a Community Banker

Understanding definitions and equations can often be a source of frustration, especially when they are presented in a typically academic and formal manner. However, this is not the case here. The definitions here are crafted from the viewpoint of a community banker, offering a more practical and accessible perspective.  

Terminology Sections

    

General Banking Terms

Familiarize yourself with the key terms and phrases crucial for a community banker. Gain insights not just into the definitions but also the specific implications and significance these terms hold in the context of community banking.

Deposit Accounts

 

Financial Statements

        

Loan Structure Terms

A Community Banker possesses the ability to tailor the loan terms to align with the loan's intended purpose, the customer's objectives, and the overall goals of the bank.

Loan Types

 

Loan Terms

 

Loan Pricing Terms

 

Loan Program Terms

          

Business Structure Terms

A Community Banker must be able to navigate and understand the corporate structure of their borrowers to ensure that the bank in adequately protected. 

 

Legal Entity Types

      

Character (5 C's)

Character stands out as the paramount factor among the 5 C's of Credit. Even in the presence of other loan strengths, if there are uncertainties regarding the borrower's character, bankers should exercise caution.

 

Credit Report Terms

        

Capacity (5 C's)

The primary objective for a banker is the repayment of the loan. Consequently, a significant portion of the underwriting process centers around comprehending the borrower's capacity to do just that.

 

Repayment Analysis Terminology

 

Income Statement Terminology

 

Personal Income Terminology

          

Capital (5 C's)

When a borrower's income falls short of repaying the loan, the financial strength of the borrower becomes crucial. A banker must grasp the borrower's liquidity and leverage to discern alternative options available for loan repayment.

 

Liquidity Terms

 

Leverage Terms

 

Balance Sheet Terms

 

Personal Financial Statement Terms

    

Collateral (5 C's)

Collateral serves as the ultimate safeguard for loan repayment. Recognizing that not all collateral holds the same value, a banker needs a thorough understanding of the marketability of the collateral they accept, ensuring its worth is viable if and when it becomes necessary.

 

Collateral Analysis Terms

 

Lien Perfection Terms

    

Conditions (5 C's)

Various external factors impact a borrower's capacity to repay a loan. A banker must remain vigilant, recognizing both risks and opportunities that lie ahead for their borrowers.

      

Bank Management Terms

Running a bank involves overseeing numerous aspects, and the first crucial step is gaining a comprehensive understanding of common terms in the banking sector.

 

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