By understanding the linkage between the bank balance sheet and income statement, monitoring key measurements in the bank as well as the decisions that management is making in response to the economic marketplace, we can effectively assess the strengths and weaknesses in our bank.
Once these interrelationships are understood, participants will walk through the CAMELS Rating to predict where their bank may score. Lastly, we will look at a way to create future budgets using the starting point of the Return on Assets.
This is a foundational class that does require experience in understanding financial statements, particularly experience in reviewing income statements, balance sheets and basic ratio analysis. It is most helpful for those either in bank management, on a bank board or aspiring to future leadership roles in the bank.
Learning Objectives:
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Complete a pre-session assignment that reviews your bank's financial statements to get a feel for the condition of the bank.
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Discuss the existing marketplace, and the impacts they are currently seeing, as well as management's approaches to addressing the impacts.
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Review the Balance Sheet and Income Statement of a bank to build an expectation of the interrelationships that exist in financial institution statements.
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Measure and set key financial statement ratios to assess the condition of the bank as well as to understand what decisions will be required to improve the performance of the bank.
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Apply information from the financial statements to build a CAMELS Rating for your bank
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Be exposed to building an annual budget with an ROA Tree model
