This course addresses the fundamentals of risk management bank supervision including basic bank analysis and Report of Examination (ROE) preparation. The course consists of ten instructor-led modules with corresponding case study exercises and a capstone project simulating key parts of a bank examination. The course was recently revised to provide a more foundational training approach that better aligns with on-the-job examination skill expectations. This course should be taken no-sooner than two months from the start of examination experience.
By the end of this course, students will have been taught how to:
- Verify the Call Report balance sheet and income statement using the bank’s financial statements and other applicable records and reports.
- Determine the impact of a bank's investment portfolio on its financial condition.
- Identify asset and funding concentrations in accordance with regulatory guidance.
- Identify the elements of a strong internal routines and controls program.
- Use the Uniform Bank Performance Report (UBPR) and bank records to identify and calculate ratios pertinent to a bank's financial soundness for capital, earnings, and liquidity.
- Assess the bank’s capital, earnings, and liquidity positions.
- Assign component ratings for capital, earnings, and liquidity and write well-supported comments.
- Perform the duties of an Operations Manager on a safety and soundness examination including assessing risk during pre-examination planning and preparing various elements of the Report of Examination.
- Conduct effective meetings with bank management.
Duration and Format
This course contains:
- In-person classroom delivery - two-weeks of facilitated classroom learning including:
- Lectures and discussions
- Small-group case study activities
- In-class capstone project
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 at least two months 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
Prior to attending the course, participants should have some exposure to the following: (Note: Exposure may include completing the task, assisting someone else with the task, or some other means to become aware of the concepts)
- Examination tools:
- 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
- The California Spread of the Balance Sheet and Income Statement in accordance with Call Report Instructions
- Schedule RC-B Securities in accordance with Call Report instructions
- Capital component:
- 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
Unlike earlier versions of IES, the current version does not require demonstration of full proficiency in these tasks. Instructors will only expect participants to have familiarity with these tasks: participants will not be evaluated for proficiency in these areas.
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:
- Complete an independent study covering financial concepts and analysis (approximately 40 hours).
- Submit a completed participant profile.
- Non-FDIC participants only – read and complete accounting related materials (16 hours) and view Virtual Training Videos on Capital, Securities and Liquidity.
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
- Participants use financial and supplemental information to make appropriate adjusting entries to the balance sheet spread.
- Verify the Call Report.
- Participants complete the Recapitulation of Securities ROE supplemental page and verify RCB - Securities.
- Participants are given financial and supplemental information to spread the income statement and verify the accuracy of Call Report Schedule RI – Report of Income.
- Participants calculate earnings ratios, assess the bank’s budget, as well as analyze earnings and write a comment.
- Participants calculate several liquidity ratios, assess the bank’s Liquidity Policy, analyze liquidity and draft a bullet point comment.
- Participants complete the Capital Calculations ROE page, determine compliance with FDIC Rules and Regulations Part 324, and determine the bank’s Prompt Corrective Action category.
- Participants analyze capital, and write a Capital comment.
- 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 define various types of interest rate risk and learn the basics of evaluating sensitivity to market risk.
- Operations Manager (OM)
- Participants review general duties of an OM including managing the work of others and assisting the Examiner-in-Charge with preparation of the ROE.
- Meetings with Bankers
- Participants prepare for and conduct meetings with bank management, discuss strategies for obtaining information needed from bankers, and learn how to prepare for exit meetings.
- Case Study
- Through individual and small group activities, participants ask questions of the banker to determine the proper slotting of accounts for the balance sheet and income statement, assess management policies and practices, and obtain knowledge of accounts, management reports and philosophies.
- Participants ask questions of the examiner-in-charge to determine how to handle items for the ROE.
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.