Risk Management Manual of Examination Policies - FDIC

REPORT OF EXAMINATION INSTRUCTIONS Section 16.1
PURPOSE
EXAMINATION CONCLUSIONS AND COMMENTS (ECC)
The ECC page should convey all significant examination conclusions, recommendations, and management
responses to the primary readership of the Report – the Board of Directors and institution management. This page
will always include an assessment and support for each CAMELS component. This schedule should also serve as a
guide for corrective action of all significant examination recommendations. Completion of this schedule is the final
step in the examination process. A full understanding of the institution's overall condition is a prerequisite to its
preparation.
In general, duplication of comments should be minimized between the ECC page and other schedules included
within the Report, especially the RMA page. However, some duplication is anticipated within the ECC page as
certain types of examination issues, like an underfunded ALLL, can materially impact multiple component rating
assessments.
COMMENT LENGTH AND CONTENT
Comments should be of sufficient length to support the conclusions reached and recommendations presented. For
example, the ECC page commentary for a stable 1-rated component would be fairly concise, while the length of
commentary would be progressively more detailed for 2- through 5-rated components.
PAGE STRUCTURE AND ORDER
Numerical Ratings
Uniform Financial Institutions Rating System – As formatted by Genesys, the top of the first page includes a grid
to display the component and composite ratings for the current and two prior examinations. Since definitions of all
five composite ratings are printed on the inside of the Report front cover, it is unnecessary to include the definition
here. Definitions of the component ratings are publicly available in the FDIC Statement of Policy on The Uniform
Financial Institution Rating System, and can be provided separately to management upon request.
Previous examination dates should correspond to those noted elsewhere in the Report. Identify State examinations
with "S" following the date; designate other agency examinations with appropriate abbreviations.
Condition Summary
The first narrative comments (after the composite and component ratings grid) will be a summary of the overall
condition of the bank, briefly addressing the composite and each component area. While this comment should be
concise (often, two or three sentences will be sufficient), it is recognized that examinations of institutions presenting
more than normal risk may necessitate somewhat more extensive narrative. However, in such cases, the focus
should remain on a summary of the bank’s condition; bullet points or other summarization techniques can be an
effective means of concisely yet informatively summarizing the key conclusions.
Compliance with Enforcement Actions
Include a summary of outstanding formal or informal action derived from the detailed analysis presented on the
Compliance with Enforcement Actions page. In the case of an Order to Cease and Desist, the summary should also
discuss the unsafe or unsound practices cited in the "Notice of Charges" which precipitated the enforcement action.
Close with the examiner's opinion as to whether each of the practices or conditions has been discontinued or still
Report of Examination Instructions (12-04) 16.1-6 DSC Risk Management Manual of Examination Policies
Federal Deposit Insurance Corporation