Student Worksheet by E0sMP6M

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									                 BALANCE SHEET STRUCTURE/OWNERSHIP


UBPR Data                        Findings

Asset composition




Expectations for yield on
average assets relative to
peer (e.g., higher than,
lower than, similar to)

Expectations for risk profile
relative to asset mix (e.g.,
lower than, higher than,
similar to)

Liability composition




Expectations for risk profile
relative to liability mix



Expectations for funding
costs relative to peer (e.g.,
lower than, higher than,
similar to)

Initial assessment of overall
risk profile relative to asset
and liability mix



Are there any affiliate relationships that could have a positive or negative affect on your
analysis of the bank’s condition?




                                                                                              1
                                  ASSET QUALITY
Asset Quality Off-Site

Asset Quality: Balance Sheet Structure and Types and Levels of Off-Balance
Sheet Items

UBPR Pages                    Findings

Page 4, Assets, Liabilities
and Capital; and page 6,
Balance Sheet -
Percentage Composition
of Assets and Liabilities

Page 7A, Analysis of
Loan & Lease Allowance
and Loan Mix


Page 10, Liquidity and
Investment Portfolio



Page 5, Off-Balance
Sheet Items & Derivatives
Analysis




Asset Quality: Levels and Trends of Key Ratios

UBPR Page 1 Ratios            Findings

Net Loss to Average
Total LN & LS



Earnings Coverage of Net
Loss(x)




                                                                             2
UBPR Page 1 Ratios           Findings

LN & LS Allowance to
Total LN & LS



Non-Current LN & LS to
Gross LN & LS




UBPR Page 7 Ratios           Findings

Recoveries to Prior Credit
Loss



Net Losses by Type of LN
& LS




UBPR Pages 8 and 8A          Findings
Ratios

Summary of non-current
loans



Percentage of non-
current loans and leases
by loan type




                                        3
Asset Quality On-Site

   Are there any concerns as to the adequacy of underwriting standards and credit
    administration practices?




   What are the level, severity, and trend of classifications?




   Is the ALLL considered adequate for the level of risk in the loan portfolio?




   What is the level of credit risk posed by off-balance sheet activities?




   Has management demonstrated an ability to recognize problem assets in a timely
    manner?




   Is there a significant volume of technical exceptions noted during the exam?




   What is your recommended rating for asset quality and why?




                                                                                     4
                                   EARNINGS
Earnings Off-Site

Earnings: Balance Sheet Structure

UBPR Pages                  Findings

Page 6, Balance Sheet -
Percentage Composition
of Assets and Liabilities

Page 7A, Analysis of
Loan & Lease Allowance
and Loan Mix


Page 10, Liquidity and
Investment Portfolio




Earnings: Levels and Trends of Key Ratios

UBPR Page 1 ROA and         Findings
Subcomponent Ratios

Net Income to Average
Assets



Net Interest Income (TE),
or NII, to Average Assets



Interest Income (TE) to
Average Assets



Interest Expense to
Average Assets




                                              5
UBPR Page 1 ROA and        Findings
Subcomponent Ratios

Non-Interest Income to
Average Assets



Non-Interest Expense to
Average Assets



Provision: Loan & Lease
Losses to Average
Assets


Realized Gains/Losses
on Securities to Average
Assets


Net Operating Income to
Average Assets



Adjusted Net Operating
Income to Average
Assets


Net Income Adjusted
Subchapter S to Average
Assets




                                      6
UBPR Page 1 Margin         Findings
Analysis Ratios

Net Interest Income (TE)
to Average Earning
Assets


Interest Income (TE) to
Average Earning Assets



Interest Expense to
Average Earning Assets




UBPR Page 3 Ratios         Findings

Non-Interest Income




Non-Interest Expenses
(Overhead Expense)



Yield on Ratios




Cost of Ratios




                                      7
Earnings On-Site

   Are there any examination findings that change the preliminary assessment from the
    off-site review? What are they and how do they change your assessment?




   What is your recommended rating for earnings and why?




                                                                                     8
                                       LIQUIDITY
Liquidity Off-Site

Liquidity: Balance Sheet Structure, Off-Balance Sheet Items, and Securities
Portfolio

UBPR Pages                   Findings

Page 4, Balance Sheet -
Assets, Liabilities and
Capital; and page 6,
Balance Sheet -
Percentage Composition
of Assets and Liabilities

Page 5, Off-Balance
Sheet Items & Derivatives
Analysis


Page 10, Liquidity And
Investment Portfolio




Liquidity: Levels and Trends of Key Ratios

UBPR Page 1 Ratios          Findings

Net Non-Core Funding
Dependence



Net Loans & Leases to
Total Assets




                                                                              9
UBPR Page 10 Ratios         Findings

Short-Term Investments to
Total Assets



Core Deposits to Total
Assets



Short-Term Non-Core
Funding to Total Assets



Net Short-Term Non-Core
Funding Dependence



Short-Term Investment to
Short-Term Non-Core
Funding


Short-Term Assets to
Short-Term Liabilities



Net Loans & Leases to
Deposits



Net LN & LS to Core
Deposits




                                       10
Liquidity On-Site

   Has the bank been able to meet its funding requirements on acceptable terms?




   Has management demonstrated a capability to properly identify, measure, monitor,
    and control the institution’s liquidity position, including the effectiveness of funds
    management strategies, liquidity policies, management information systems, and
    contingency funding plans?




   What are the weaknesses in the leverage program and its effect on earnings?




   What is your recommended rating for liquidity and why?




                                                                                         11
                         SENSITIVITY TO MARKET RISK
Sensitivity to Market Risk Off-Site

IRRSA data

IRRSA Data                   Findings

Objective tests on the
Summary page



Periodic NIM information
on the Core Analysis:
Earnings page




Sensitivity to Market Risk: Balance Sheet Composition

UBPR Pages                   Findings

Page 4, Balance Sheet -
Assets, Liabilities and
Capital; and page 6,
Balance Sheet -
Percentage Composition of
Assets and Liabilities

Page 9, Interest Rate Risk
Analysis as a Percent of
Assets


Pages 5A and 5B, Off
Balance Sheet Items and
Derivatives Analysis




                                                        12
Sensitivity to Market Risk: Levels and Trends of Key Ratios

UBPR Page 1 Ratios            Findings

Net Interest Income (TE) to
Average Assets

Net Interest Income (TE) to
Average Earning Assets
(i.e., the NIM)




Sensitivity to Market Risk On-Site

   Is the output provided by management’s monitoring system reliable for use in
    assessing the level of risk? Why or why not?




   Has management effectively identified, measured, monitored, and controlled the
    exposure to interest rate risk?




   What is your recommended rating for sensitivity to market risk and why?




                                                                                     13
                                     CAPITAL

Capital Off-Site

Capital: Balance Sheet Structure

UBPR Page                     Findings

Page 4, Balance Sheet -
Assets, Liabilities and
Capital



Capital: Levels and Trends of Key Ratios

UBPR Page 1 Ratios            Findings

Tier 1 Leverage Capital

Cash Dividends to Net
Income

Assets and Tier 1 Capital
growth rates



UBPR Page 11 Ratio            Findings

Net Income to Average
Total Equity



UBPR Page 11A Ratios          Findings

Tier 1 Risk-Based Capital
to Risk-Weighted Assets

Total Risk-Based Capital to
Risk-Weighted Assets




                                               14
Capital On-Site

   What is the nature, trend, and volume of problem assets and the adequacy of the
    ALLL?




   What is the quality and strength of earnings and the reasonableness of dividends
    based on your findings during the examination?




   What impact will future growth plans have on the capital level?




   What is your recommended rating for capital and why?




                                                                                       15
                                   MANAGEMENT


   What is the level and quality of oversight and support provided by the Board and
    management?




   Are management information and risk monitoring systems accurate, timely, and
    effective for the institution’s size, complexity, and risk profile?




   Are internal policies and controls adequate and are bank practices in conformance
    with them?




   Are audits and internal controls adequate?




   Is management responsive to recommendations from auditors and supervisory
    authorities?




   What is your recommended rating for management and why?




                                                                                        16
                                 COMPOSITE

What is your recommended composite rating for the bank and why?




                                                                  17

								
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