Risk Management Manual of Examination Policies - FDIC

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REPORT OF EXAMINATION INSTRUCTIONS Section 16.1 • Transactions with insiders, affiliates, holding companies, and parallel-owned banking organizations • Unusual or nontraditional activities conducted through affiliates • Policies and procedures regarding conflicts of interest and ethical conduct • Affiliate/subsidiary relationships • Excessive compensation and Director’s fees • Key man life insurance/deferred compensation Additional guidance regarding this area is found in Sections 4.2, 4.4, and 11.0 of the Manual. Report of Examination Instructions (12-04) 16.1-14 DSC Risk Management Manual of Examination Policies Federal Deposit Insurance Corporation
REPORT OF EXAMINATION INSTRUCTIONS Section 16.1 PURPOSE VIOLATIONS OF LAWS AND REGULATIONS This page is used to communicate details regarding apparent violations (violations) of laws or regulations, as well as contraventions of Statements of Policy. Include this schedule when any such violations or contraventions are cited. GENERAL Comments on the Violations of Laws and Regulations page may, but need not automatically, be carried forward in summary form to the RMA or, if more significant, ECC page. The materiality of the violation, bank management’s response to the violation, and the examiner's intentions regarding civil money penalties and/or enforcement actions can help determine whether ECC page comments are appropriate. Because of possible administrative or judicial review, all violations are considered "apparent" violations. Generally, list violations in order of importance, with consideration given to the substance of the violation and its severity. FORMAT OF VIOLATION AND CONTRAVENTION OF STATEMENT OF POLICY WRITE-UPS Headings - A descriptive heading should precede each scheduled violation or group of violations. Citation of Violation - When scheduling violations of Federal or State law, it is generally necessary to cite the specific section or subsection of the regulation deemed to have been violated (for example, Section 328.2 or Section 329.1(e)). Conversely, any reference to a general regulation dealing with a particular subject is cited by part number (for example, Part 329). Also describe the specific requirements of the section cited. This can be accomplished either by directly quoting the section, or, if lengthy, by paraphrasing. Comments should be as precise as circumstances warrant. Description of Violation - Describe the specific activity(ies), transaction(s), or circumstances giving rise to the apparent violation. For example, “The following loans are in apparent violation of this section because they were extended without the prior approval of the full Board of Directors. Detailed descriptions and extensive remarks on violations involving certain assets, such as adversely classified loans, may be unnecessary when other schedules are referenced. Reference the appropriate Report page if any asset illegally held is subject to adverse classification or Special Mention. Management Comments and Corrective Action - Include management's comments and commitments, or lack thereof. This should include both management’s explanation for why the violation occurred, and any commitments for corrective action planned. Clearly indicate any promise of restitution by offending individuals. Director Approval - To reflect Director responsibility and possible liability, it can be useful to include the names of Directors who approved assets held in nonconformance with applicable State and Federal laws and regulations or similar apparently illegal transactions. While this is not necessary in all violation write-ups, it is essential when they may result in the imposition of civil money penalties. In such cases, show the date Director approval was granted, and include the names of dissenting Directors. Follow this procedure even if approval consisted merely of ratifying a group of loans identified only by numbers. Generally, also include Director approval information when the apparent violation(s) involves insider transactions, whether or not civil money penalties may be recommended. DSC Risk Management Manual of Examination Policies 16.1-15 Report of Examination Instructions (12-04) Federal Deposit Insurance Corporation
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DSC Risk Management Manual of Exami
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INDEX Section 0.1 Policies, Procedu
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INDEX Section 0.1 Liquidity Managem
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INDEX Section 0.1 Introduction 14.1
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BASIC EXAMINATION CONCEPTS AND GUID
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CAPITAL Section 2.1 INTRODUCTION Pu
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CAPITAL Section 2.1 Interests in As
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CAPITAL Section 2.1 the holder prio
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CAPITAL Section 2.1 • Qualifying
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CAPITAL Section 2.1 application sub
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CAPITAL Section 2.1 may leave the b
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CAPITAL Section 2.1 procedures empl
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CAPITAL Section 2.1 growth and rema
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ASSET QUALITY Section 3.1 INTRODUCT
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LOANS Section 3.2 INTRODUCTION The
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LOANS Section 3.2 Qualifications of
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LOANS Section 3.2 to the ALLL), an
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LOANS Section 3.2 PORTFOLIO COMPOSI
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LOANS Section 3.2 • Require reaso
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LOANS Section 3.2 Internal Controls
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LOANS Section 3.2 continue to suppo
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LOANS Section 3.2 board of director
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LOANS Section 3.2 the institution's
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LOANS Section 3.2 such as for lives
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LOANS Section 3.2 Classification Gu
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LOANS Section 3.2 checks; terms in
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LOANS Section 3.2 • Sublicensee B
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LOANS Section 3.2 similar propertie
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LOANS Section 3.2 policies and proc
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LOANS Section 3.2 Moreover, since t
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LOANS Section 3.2 generally should
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LOANS Section 3.2 exercise control
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LOANS Section 3.2 Problems in this
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LOANS Section 3.2 that reveal other
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LOANS Section 3.2 Other loans of qu
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LOANS Section 3.2 be determined whe
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LOANS Section 3.2 time period elaps
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LOANS Section 3.2 individual apprai
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LOANS Section 3.2 controls over its
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LOANS Section 3.2 consistent with t
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LOANS Section 3.2 such funds, the m
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LOANS Section 3.2 security interest
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LOANS Section 3.2 unambiguous terms
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LOANS Section 3.2 Trustees are sele
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LOANS Section 3.2 be valid but cert
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LOANS Section 3.2 Overview of the S
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LOANS Section 3.2 Although some ins
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LOANS Section 3.2 • Portfolio gro
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LOANS Section 3.2 pricing decisions
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LOANS Section 3.2 trends, condition
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LOANS Section 3.2 provide additiona
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SECURITIES AND DERIVATIVES Section
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CASH AND DUE FROM BANKS Section 3.4
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CASH AND DUE FROM BANKS Section 3.4
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PREMISES AND EQUIPMENT Section 3.5
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PREMISES AND EQUIPMENT Section 3.5
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OTHER REAL ESTATE Section 3.6 Under
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OTHER ASSETS AND LIABILITIES Sectio
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OFF-BALANCE SHEET ACTIVITIES Sectio
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MANAGEMENT Section 4.1 INTRODUCTION
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MANAGEMENT Section 4.1 consequently
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MANAGEMENT Section 4.1 overdue, ren
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MANAGEMENT Section 4.1 money launde
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MANAGEMENT Section 4.1 management l
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MANAGEMENT Section 4.1 • An adequ
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MANAGEMENT Section 4.1 • Troubled
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MANAGEMENT Section 4.1 management i
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INTERNAL ROUTINE AND CONTROLS Secti
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RELATED ORGANIZATIONS Section 4.3
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RELATED ORGANIZATIONS Section 4.3 c
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RELATED ORGANIZATIONS Section 4.3 U
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RELATED ORGANIZATIONS Section 4.3 i
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RELATED ORGANIZATIONS Section 4.3 A
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RELATED ORGANIZATIONS Section 4.3 c
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RELATED ORGANIZATIONS Section 4.3 S
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RELATED ORGANIZATIONS Section 4.3 w
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RELATED ORGANIZATIONS Section 4.3 r
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RELATED ORGANIZATIONS Section 4.3 A
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FIDELITY AND OTHER INDEMNITY PROTEC
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VIOLATIONS OF LAWS AND REGULATIONS
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VIOLATIONS OF LAWS AND REGULATIONS
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MISCELLANEOUS BANKING ACTIVITIES Se
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EARNINGS Section 5.1 structure will
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EARNINGS Section 5.1 demand is low)
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EARNINGS Section 5.1 2. Certain dir
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EARNINGS Section 5.1 capital and al
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LIQUIDITY AND FUNDS MANAGEMENT Sect
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SENSITIVITY TO MARKET RISK Section
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BANK SECRECY ACT, ANTI-MONEY LAUNDE
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BANK FRAUD AND INSIDER ABUSE Sectio
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SUSPICIOUS ACTIVITY AND CRIMINAL VI
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INTERNATIONAL BANKING Section 11.1
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APPLICATIONS Section 12.1 Effective
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APPLICATIONS Section 12.1 for compa
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APPLICATIONS Section 12.1 be tantam
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APPLICATIONS Section 12.1 accept sh
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REPORT OF EXAMINATION INSTRUCTIONS
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BANK OF ANYTOWN ANYTOWN ANY COUNTY
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Examination Conclusions and Comment
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Risk Management Assessment 99999 1.
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Violations of Laws and Regulations
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Information Technology Assessment (
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Fiduciary Activities Assessment (Co
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Comparative Statements of Financial
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Recapitulation of Securities 99999
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Items Subject to Adverse Classifica
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Analysis of Loans Subject to Advers
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Assets with Credit Data or Collater
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Capital Calculations 99999 Tier 1 C
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Comparative Statements of Income an
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Extensions of Credit to Directors/T
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Confidential - Supervisory Section
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In-House Information Technology 999
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Directors/Trustees and Officers 999
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INTERNATIONAL REPORT PAGES AND WORK
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Analysis of the Country Exposure Ma
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International Loans, Acceptances, a
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International Loans, Acceptances, a
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Foreign Exchange Activities 99999 N
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Position Analysis - Other Currencie
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Revaluation and Income/Loss Analysi
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Policy and Procedures 99999 1. (a)
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Policy and Procedures (Continued) 9
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Audit and Internal Controls - Inter
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Parallel-Owned Banking Organization
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REPORT OF INVESTIGATION INSTRUCTION
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FDIC Report of Investigation THIS R
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Description of the Transaction INVE
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FINANCIAL HISTORY AND CONDITION Ass
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FINANCIAL HISTORY AND CONDITION (Co
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ADEQUACY OF THE CAPITAL STRUCTURE G
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ADEQUACY OF THE CAPITAL STRUCTURE (
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FUTURE EARNINGS PROSPECTS Assess th
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FUTURE EARNINGS PROSPECTS (Continue
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GENERAL CHARACTER OF THE MANAGEMENT
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IV. GENERAL CHARACTER OF THE MANAGE
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Interview Comments IV. GENERAL CHAR
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RISK TO THE FUNDS As a general matt
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VI. CONVENIENCE AND NEEDS OF THE CO
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OTHER PERTINENT INFORMATION If appl
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Source: Application for Federal Dep
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Service Continuity & Monitoring OTH
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