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TE > Evaluation Factors > Flashcards

Evaluation Factors Flashcards

1
Q

The level and quality of capital and the overall financial condition of the institution.

A

Capital

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2
Q

The ability of management to address emerging needs for additional capital.

A

Capital

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3
Q

The nature, trend, and volume of problem assets, and the adequacy of allowances for loan and lease losses and other valuation reserves.

A

Capital

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4
Q

Balance sheet composition, including the nature and amount of intangible assets, market risk, concentration risk, and risks associated with nontraditional activities.

A

Capital

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5
Q

Risk exposure represented by off-balance sheet activities.

A

Capital

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6
Q

The quality and strength of earnings, and the reasonableness of dividends.

A

Capital

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7
Q

Prospects and plans for growth, as well as past experience in managing growth.

A

Capital

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8
Q

Access to capital markets and other sources of capital, including support provided by a parent holding company.

A

Capital

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9
Q

The adequacy of underwriting standards, soundness of credit administration practices, and appropriateness of risk identification practices.

A

AQ

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10
Q

The level, distribution, severity, and trend of problem, classified, nonaccrual, restructured, delinquent, and nonperforming assets for both on- and off-balance sheet
transactions.

A

AQ

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11
Q

The adequacy of the ALLL and other asset valuation

reserves.

A

AQ

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12
Q

The credit risk arising from or reduced by off-balance
sheet transactions, such as unfunded commitments, credit derivatives, commercial and standby letters of credit, and lines of credit.

A

AQ

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13
Q

The diversification and quality of the loan and investment portfolios.

A

AQ

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14
Q

The extent of securities underwriting activities and exposure to counter-parties in trading activities.

A

AQ

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15
Q

The existence of asset concentrations.

A

AQ

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16
Q

The adequacy of loan and investment policies,

procedures, and practices.

A

AQ

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17
Q

The ability of management to properly administer its
assets, including the timely identification and collection
of problem assets.

A

AQ

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18
Q

The adequacy of internal controls and management

information systems.

A

AQ

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19
Q

The volume and nature of credit documentation

exceptions.

A

AQ

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20
Q

The level and quality of oversight and support of all institution activities by the board of directors and management.

A

Mgmt

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21
Q

The ability of the board of directors and management, in their respective roles, to plan for, and respond to, risks that may arise from changing business conditions or the initiation of new activities or products.

A

Mgmt

22
Q

The adequacies of, and conformance with, appropriate internal policies and controls addressing the operations and risks of significant activities.

A

Mgmt

23
Q

The accuracy, timeliness, and effectiveness of management information and risk monitoring systems appropriate for the institution’s size, complexity, and risk profile.

A

Mgmt

24
Q

The adequacy of audits and internal controls to: promote effective operations and reliable financial and regulatory reporting; safeguard assets; and ensure compliance with laws, regulations, and internal policies.

A

Mgmt

25
Q

Compliance with laws and regulations.

A

Mgmt

26
Q

Responsiveness to recommendations from auditors and

supervisory authorities.

A

Mgmt

27
Q

Management depth and succession.

A

Mgmt

28
Q

The extent that the board of directors and management
is affected by, or susceptible to, dominant influence or
concentration of authority.

A

Mgmt

29
Q

Reasonableness of compensation policies and

avoidance of self-dealing.

A

Mgmt

30
Q

Demonstrated willingness to serve the legitimate banking needs of the community.

A

Mgmt

31
Q

The overall performance and risk profile of the institution.

A

Mgmt

32
Q

The level of earnings, including trends and stability,

A

Earnings

33
Q

The ability to provide for adequate capital through

retained earnings

A

Earnings

34
Q

The quality and sources of earnings

A

Earnings

35
Q

The level of expenses in relation to operations

A

Earnings

36
Q

The adequacy of the budgeting systems, forecasting
processes, and management information systems in
general

A

Earnings

37
Q

The adequacy of provisions to maintain the ALLL and

other valuation allowance accounts

A

Earnings

38
Q

The earnings exposure to market risk such as interest

rate, foreign exchange, and price risks

A

Earnings

39
Q

The adequacy of liquidity sources compared to present and future needs and the ability of the institution to meet liquidity needs without adversely affecting its operations or condition.

A

Liquidity

40
Q

The availability of assets readily convertible to cash without undue loss.

A

Liquidity

41
Q

Access to money markets and other sources of funding.

A

Liquidity

42
Q

The level of diversification of funding sources, both on- and off-balance sheet.

A

Liquidity

43
Q

The degree of reliance on short-term volatile funding sources (including borrowings and brokered deposits), to fund longer-term assets.

A

Liquidity

44
Q

The trend and stability of deposits.

A

Liquidity

45
Q

The ability to securitize and sell certain pools of

assets.

A

Liquidity

46
Q

The capability of management 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.

A

Liquidity

47
Q

The sensitivity of the financial institution’s earnings or the economic value of its capital to adverse changes in interest rates, foreign exchanges rates, commodity prices, or equity prices;

A

STMR

48
Q

The ability of management to identify, measure, monitor, and control exposure to market risk given the institution’s size, complexity, and risk profile;

A

STMR

49
Q

The nature and complexity of interest rate risk exposure arising from nontrading positions; and

A

STMR

50
Q

Where appropriate, the nature and complexity of market risk exposure arising from trading and foreign operations.

A

STMR

TE (9 decks)

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