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Valuation of Bank Loan Portfolios: Two Approaches

Valuation for Financial Reporting

 Valuation of Bank Loan Portfolios: Two Approaches
CPE Credit

Program Type: PodCast (Audio Only)
Program Level: Basic
Prerequisites: Previous training or experience with the fundamentals of accounting, finance, economics, and business writing.
Advanced Preparation: None
Delivery Method: Group Internet-Based
CPE Credits: One (1) Hour
Fields of Study: Finance
Item Number: 12OFV4906
Shipping Weight: 0lbs. 0oz.
Price: $80.00
Program Description

The authors will present two models for valuing bank loan portfolios. One model values loans based on the expected cash flows utilizing prepayment rates and directly embedding the default probabilities and the severities in the expected cash flows. The other model values the loan portfolio like a fixed income security of a certain credit quality utilizing nominal cash flows and incorporating risks into the discount rate. The authors will show that the two models give essentially the same values.

Learning Objectives

After completing this podcast, attendees will be able to:

- Verbilze the difference between the two different models
- Utilze either model

Who Should Attend

Financial professionals


Brian Lee
Mr. Brian Lee is a Manager at the Sherman Oaks, CA office of Crowe Horwath, LLP. Mr. Lee specializes in the valuation of closely held and publicly traded companies, intangible assets, stock options, warrants, notes, and preferred securities for financing reporting, transaction, tax, and litigation purposes for various industries.

Mr. Lee also has extensive experience in the valuation of loan portfolios, FDIC loss share agreements, unfunded loan commitments, core deposit customer relationships intangible assets, time deposits, FHLB advances, trust preferred securities, subordinated debentures, and other financial assets and liabilities of financial institutions.

Daniel McConaughy, PhD, ASA
Dr, Daniel McConaughy is a Professor of Finance at California State University, Northridge, where his area of expertise is business valuation and corporate finance; Dr. McConaughy is also a director with Crowe's Valuation Services practice. He has published more than a twenty papers in academic and industry journals and has more than twelve years of business valuation experience. His paper won the 1st Academic Research Award at NAVCA's 2009 Annual Consultants' Conference.