Institutional Knowledge
New financial calculator: $50.00
Box of pencils: $5.00
CECL software program: $15,000
Institutional Knowledge: PRICELESS
Community based financial institutions are a tremendous asset to the areas they serve. Typically, the financial institution is a pillar of the community through the volunteer hours of the staff, financial contributions to local organizations and professional expertise. Business bankers in these communities work closely with their customers to understand their financial needs and help them plan for a successful future. Many times, the banker and business owner have additional shared interests within the community that furthers the professional and personal relationship.
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This September will be the 37th running of the Chequamegon Fat Tire 40, an annual mountain bike race between Hayward and Cable, WI. Entrants consist of both the competitive set and avid riders who consider this sort of thing fun.
Loan covenants are an essential part of commercial lending. They provide a framework of understanding for the borrower to meet the requirements of the lender. The covenants can include financial reporting requirements, performance-based covenants and operating covenants. The first two are considered affirmative covenants while the last is generally considered a negative covenant. The loan covenants are included within the loan agreement as a part of the overall loan documentation. The specific requirements for the delivery of financial reporting or the testing of loan covenants should be explicitly included in the loan agreement and consistent with the approval of the credit facility.
Every financial institution has a culture and more specifically, a credit culture. This culture can be arrived at in many ways, through the leadership, policies, practices and other intangibles that employees may not even be aware of. Interestingly, culture is rarely documented as a specific item but rather it is a collaboration of the various policies and procedures and undocumented practices the financial institution has in place to run their business. It is the culture that sets the tone for how things get done in the financial institution, how customers are treated, how employees are treated and how the financial institution is managed. It is my experience that separate from their policies and procedures, high performing financial institutions have created a culture where everyone knows what the expectations are, and everyone works to achieve them for the betterment of the financial institution.