Bankers
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Bank Exam —Financial Prep List
Preparation is the best course of action. July 2009
Date:______________________________
The Bank Exam Financial Prep List will assist you in preparing for your next federal and state exams. In addition to the examiner's preliminary request list, you should have the following items ready.
Pre-exam brief – an overview document and comments prepared for the first meeting with examiners. Include a review of the local economy, identify bank issues and challenges, and discuss plans to address them. Executive summary – Balance Sheet and Income Statement summaries with explanation of variances to budget. Ratio analysis – summary of key performance ratios, including efficiency, net interest margin, and yield on loans. Also prepare ratios for salaries, interest income, interest expense, other income and other expense as percentages of average assets. Margin analysis – report showing the margin and its trend for earning asset groups and interest-bearing liabilities. Updated, detailed budget – updated budget incorporating increased FDIC insurance costs. Sync with your forecast. Regulators are requesting far more details than in the past. Longer-term forecast – a 3- to 5- year plan that reflects the bank's documented strategy. All forecasts should include asset liability modeling scenarios. Be prepared to defend your assumptions. Contingent liquidity report – documented up-to-date report of available liquidity sources and coverage for potential liquidity event. Be prepared to defend use of brokered sources. Dependency ratio – ratio reflecting dependence on potentially volatile liabilities to fund longer term earning assets. Be prepared to support your calculation of this ratio, especially if you have excluded core deposits in excess of $100K but within the $250K FDIC insurance limit. Loan pricing strategy – documented pricing strategy. Expect regulators to validate that your execution supports this strategy. Detailed Board minutes – records that include a sufficient level of specificity to satisfy examiners. (In their eyes, if it’s not in the minutes, it didn’t happen.). Credit files – thorough documentation for non-accrual and non-performing loans, especially if classified. Compliance policies – up-to-date policies including any recent changes. CRA book – up-to-date documentation that includes any recent changes. Training records – up-to-date logs that include all seminars, conventions, webinars, online, and in-house training for everyone in the bank.
Notes:
www.BankersDashboard.com
Preparation is the best course of action. July 2009
Date:______________________________
The Bank Exam Financial Prep List will assist you in preparing for your next federal and state exams. In addition to the examiner's preliminary request list, you should have the following items ready.
Pre-exam brief – an overview document and comments prepared for the first meeting with examiners. Include a review of the local economy, identify bank issues and challenges, and discuss plans to address them. Executive summary – Balance Sheet and Income Statement summaries with explanation of variances to budget. Ratio analysis – summary of key performance ratios, including efficiency, net interest margin, and yield on loans. Also prepare ratios for salaries, interest income, interest expense, other income and other expense as percentages of average assets. Margin analysis – report showing the margin and its trend for earning asset groups and interest-bearing liabilities. Updated, detailed budget – updated budget incorporating increased FDIC insurance costs. Sync with your forecast. Regulators are requesting far more details than in the past. Longer-term forecast – a 3- to 5- year plan that reflects the bank's documented strategy. All forecasts should include asset liability modeling scenarios. Be prepared to defend your assumptions. Contingent liquidity report – documented up-to-date report of available liquidity sources and coverage for potential liquidity event. Be prepared to defend use of brokered sources. Dependency ratio – ratio reflecting dependence on potentially volatile liabilities to fund longer term earning assets. Be prepared to support your calculation of this ratio, especially if you have excluded core deposits in excess of $100K but within the $250K FDIC insurance limit. Loan pricing strategy – documented pricing strategy. Expect regulators to validate that your execution supports this strategy. Detailed Board minutes – records that include a sufficient level of specificity to satisfy examiners. (In their eyes, if it’s not in the minutes, it didn’t happen.). Credit files – thorough documentation for non-accrual and non-performing loans, especially if classified. Compliance policies – up-to-date policies including any recent changes. CRA book – up-to-date documentation that includes any recent changes. Training records – up-to-date logs that include all seminars, conventions, webinars, online, and in-house training for everyone in the bank.
Notes:
www.BankersDashboard.com
