The course addresses the fundamentals of bank supervision, basic bank analysis, and Report of Examination (ROE) preparation. The course consists of ten modules with built in exercises, a project simulating a bank examination, and a post-course virtual instructor-led session. Participants actively take part in group case studies and other classroom activities.
By the end of this course, students will have been taught how to:
- Verify the Call Report balance sheet and income statement using a "California Spread"
- Determine the impact of a bank's investment portfolio on its financial condition
- Identify asset and funding concentrations in accordance with regulatory guidance
- Use the Uniform Bank Performance Report (UBPR) and bank records to identify and calculate ratios pertinent to a bank's financial soundness for various CAMELS components
- Identify the elements of a strong internal routines and controls program
- Gain additional experience in completing various ROE pages
- Assign CAMELS component ratings for capital, earnings, and liquidity, and support with bullet point comments
- Perform the duties of an Operations Manager on a safety and soundness examination.
- Assist with risk analysis during pre-examination planning.
- Verify the accuracy of the Call Report using the bank’s financial statements.
- Assess the impact of the bank’s investment portfolio on its financial condition.
- Assist with assessment of the bank’s management and asset quality.
- Determine asset and funding concentrations in accordance with regulatory guidance.
- Assess the bank’s capital, earnings, and liquidity positions.
- Assign component ratings for capital, earnings, and liquidity, supported by full comments.
- Assist with the preparation of the Report of Examination.
- Conduct effective meetings with bank management.
- Assist with assessment of the bank’s sensitivity to market risk.
Duration and Format
This course contains:
- 40 hours of Pre-course work (Independent Self Study)
- 2 required exercise
- Viewing of Virtual Training Videos on Capital, Securities and Liquidity
- 2 weeks of Facilitated classroom discussion/lectures
- Small group activities
- in-class project
- 2 hour of virtual instructor-led post course session
- Should occur 1 month after course conclusion
NOTE: State banking authority and international students also must complete 16 hours of pre-course reading on accounting.
Level and Credits
Continuing Education Units (CEU): 7.0
Continuing Professional Education Units (CPE): 84.6
FDIC participants should attend in accordance with the parameters outlined in the Examiner Training and Development Policy. State Banking authority students should have five to six months of risk management bank examination experience. This course is open to appropriate staff of the FDIC and partner government agencies. This course is not open to the public or staff of private banks.
Prerequisites and Prior Work Experience
Experience can include completing the task, assisting someone else with the task, or some other means of gaining exposure to the task. NOTE: Unlike earlier versions of IES, the current version does not require demonstration of full proficiency on these tasks. Prior to attending the course, participants should have some exposure to, if not have completed, the following:
- Preparing the California Spread of the Balance Sheet and Income Statement in accordance with Call Report Instructions
- Verifying the accuracy of the schedule RC-B Securities in accordance with Call Report Instructions
- Risk Weighting of on-balance sheet and off-balance sheet items
- Verifying accuracy of schedule RC-R Regulatory Capital in accordance with Call Report Instructions
- Calculating capital ratios
- Performing analyses of liquidity, earnings, and capital, and preparing comments supporting assigned ratings
- Call Report Instructions
- Uniform Bank Performance Report (UBPR)
- Risk Management Manual of Examination and Report of Examination Instructions pertaining to Statement of Condition, Earnings, Capital, Liquidity and Risk Management Assessment pages
Instructors will expect participants to have familiarity with these tasks; however, participants will not be evaluated for proficiency in these areas.
The items below constitute the pre-course assignment. The pre-course assignment is due 11 business days prior to the start of the session (the Friday two weeks before). The exact date the work is due for any given session is specified in the pre-course information sent approximately two months prior to the start date. Prior to attending the workshop, students are required to do the following:
- A pre-course independent study covering financial concepts and analysis and a workshop qualification examination totaling approximately 32 hours.
- Pre-course reading and work totaling approximately 16 hours on accounting related materials.
- Submit a completed participant profile.
Post Course Recommendations and Feedback
Participants should be scheduled to serve as Operations Manager on an upcoming examination (generally within a few months) to reinforce skills learned at this school. On-the-Job coaches/trainers should help participants further develop their skills on all of these examination tasks in the weeks following the course.
Post course feedback includes recommendations based on examination tasks performed during the class, which prepares participants for further development on their upcoming examination assignments. In addition, post course feedback with collaborative focus areas determined by the participant and instructors will identify specific topics or areas where focused study or additional support during on-the-job training might be particularly useful.
- Balance Sheet
- Using financial and supplemental information, participants make appropriate adjusting entries to the balance sheet spread. After checking with the facilitator that all adjusting entries are complete and correct, they verify the Call Report. Then they complete the “Comparative Statements of Financial Condition” Report of Examination (ROE) page.
- Participants complete the Recapitulation of Securities ROE supplemental page.
- Participants are given financial and supplemental information and spread the income statement into appropriate ROE categories, reconcile the changes in equity capital, and verify the accuracy of Call Report Schedules RI – Report of Income, RI-A – Changes in Equity Capital, and RI-B – Changes in Allowance for Loan and Lease Losses. Participants complete the Examination Data and Ratios ROE page.
- Participants calculate several liquidity ratios for various liabilities, investments, loans, leases, and core and non-core funding sources in accordance with UBPR standards.
- Asset Quality
- Participants complete the Items Subject to Adverse Classification ROE page.
- Participants complete the Capital Calculations ROE page. Participants determine the bank’s compliance with FDIC Rules and Regulations Part 324, and determine the bank’s Prompt Corrective Action category.
- Internal Routine and Controls (IRC) and Audit
- Participants identify potential IRC weaknesses and determine the reason each is considered a weakness.
- Sensitivity to Market Risk
- Participants will define various types of interest rate risk and describes the basics of evaluating sensitivity to market risk.
- Operations Manager (OM)
- Participants review general duties of an OM. Participants learn about aspects of the OM role that involve managing the work of others and assisting the Examiner-in-Charge with preparation of the ROE.
- Meetings with Bankers
- Participants will discuss issues surrounding communications with bank management. Participants will prepare for, and conduct meetings with bank management, discuss strategies for obtaining information needed from bankers, and learn how to prepare for exit meetings.
- Assessing Management
- In a virtual instructor led session one month after attending IES, participants will identify individuals that comprise bank management and determine the examiner’s role when assessing bank management.
- Case Study
- Through individual and small group activities, participants will ask questions of the banker to determine the proper slotting of accounts for the balance sheet and income statement, to assess management practices, and to obtain knowledge of accounts, management reports and philosophies. Participants will ask questions of the Examiner in Charge to determine how to handle items for the ROE. Participants will ask questions of the facilitator to clarify instructions, provide direction, etc.
For information regarding administrative policies such as complaints and refunds, please contact Corporate University, Attn: NASBA Representative Ava Livas, Room A-3025, 3501 North Fairfax Drive, Arlington, VA 22226 (703) 562-2463.
The Federal Deposit Insurance Corporation is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: NASBARegistry.org.
The Federal Deposit Insurance Corporation (FDIC) is accredited by the International Association for Continuing Education and Training (IACET) (www.iacet.org). The FDIC complies with the ANSI/IACET Standard, which is recognized internationally as a standard of excellence in instructional practices. As a result of this accreditation, the FDIC is accredited to issue the IACET CEU.
For more information concerning course content and administration, please contact Halle Dickey or Janice Crawford.