FDIC RMS Manual Section 3.2: Risk Management Supervision Guide & Key
Concepts
Estimated Credit Loss - correct answer ✔✔An estimate of the current amount of the loan and
lease portfolio that is not likely to be collected.
ASC 310 (FAS 114) - correct answer ✔✔Guidance in establishing reserves for impaired credits
that are reviewed individually.
ASC 450 (FAS 5) - correct answer ✔✔Guidance that addresses the accounting for impairment
for groups of loans.
Layering - correct answer ✔✔Recording the inappropriate practice of recording in the ALLL
more than one amount for the same probable loss.
Account Receivable Financing - correct answer ✔✔Commercial lending in which borrowers
assign their interests in accounts receivable to the lender as collateral.
Leveraged Lending - correct answer ✔✔No set definition but commonly described as:
Proceeds used for buyouts
Total Debt/EBITDA = 4.0x
Senior Debt/EBITDA = 3.0x
Borrower with High debt-to-net-worth
Or borrower's other debt ratios exceeds industry norms
Oil and Gas Lending - correct answer ✔✔Should have detailed report reviewing the Pricing,
Discount Factors, and Timing of the potential RBL agreement.
, Part 365 - correct answer ✔✔Real Estate Lending Standards
LTV for Raw Land - correct answer ✔✔65 percent
LTV for Land Development - correct answer ✔✔75 percent
LTV for Commercial, multi-family, and other non-residential construction - correct answer
✔✔80 percent
LTV for 1-4 family construction - correct answer ✔✔85 percent
LTV for improved land - correct answer ✔✔85 percent
LTV for 1-4 family residential - correct answer ✔✔None
Part 365 LTV Exception Tracking List Total Limit - correct answer ✔✔100% of Total Capital
Part 365 LTV Exception Tracking List Non 1-4 Limit - correct answer ✔✔30% of Total Capital
Name 2 factors outside of Ag borrower's control? - correct answer ✔✔Commodity prices and
weather conditions
Installment Loan - correct answer ✔✔small loans scheduled to be amortized over a specific
period
Loan Participation - correct answer ✔✔sharing or selling of ownership interests in a loan
between two or more banks
Concepts
Estimated Credit Loss - correct answer ✔✔An estimate of the current amount of the loan and
lease portfolio that is not likely to be collected.
ASC 310 (FAS 114) - correct answer ✔✔Guidance in establishing reserves for impaired credits
that are reviewed individually.
ASC 450 (FAS 5) - correct answer ✔✔Guidance that addresses the accounting for impairment
for groups of loans.
Layering - correct answer ✔✔Recording the inappropriate practice of recording in the ALLL
more than one amount for the same probable loss.
Account Receivable Financing - correct answer ✔✔Commercial lending in which borrowers
assign their interests in accounts receivable to the lender as collateral.
Leveraged Lending - correct answer ✔✔No set definition but commonly described as:
Proceeds used for buyouts
Total Debt/EBITDA = 4.0x
Senior Debt/EBITDA = 3.0x
Borrower with High debt-to-net-worth
Or borrower's other debt ratios exceeds industry norms
Oil and Gas Lending - correct answer ✔✔Should have detailed report reviewing the Pricing,
Discount Factors, and Timing of the potential RBL agreement.
, Part 365 - correct answer ✔✔Real Estate Lending Standards
LTV for Raw Land - correct answer ✔✔65 percent
LTV for Land Development - correct answer ✔✔75 percent
LTV for Commercial, multi-family, and other non-residential construction - correct answer
✔✔80 percent
LTV for 1-4 family construction - correct answer ✔✔85 percent
LTV for improved land - correct answer ✔✔85 percent
LTV for 1-4 family residential - correct answer ✔✔None
Part 365 LTV Exception Tracking List Total Limit - correct answer ✔✔100% of Total Capital
Part 365 LTV Exception Tracking List Non 1-4 Limit - correct answer ✔✔30% of Total Capital
Name 2 factors outside of Ag borrower's control? - correct answer ✔✔Commodity prices and
weather conditions
Installment Loan - correct answer ✔✔small loans scheduled to be amortized over a specific
period
Loan Participation - correct answer ✔✔sharing or selling of ownership interests in a loan
between two or more banks
