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Fundamentals of Bank Credit Analysis - December 2013  -  December 9-10, 2013

8:00 am

DAY ONE - Monday, December 9

Registration and continental breakfast opens.

All sessions led by Bill Nayda unless otherwise noted. 

8:30 am

Introduction and Overview

  • What is risk?
  • Why banks fail
  • Fundamental analytical concepts:
         - Qualitative and quantitative analyses
         - Trend and peer analyses
         - Macro and micro analyses
10:00 am

Refreshment Break

10:15 am

Bank Financials and Metrics

  • Understanding bank financial statements
  • Understanding loan loss accounting
  • The fundamental ratios
10:45 am

Earnings and Profitability

  • Sources of revenues and components of earnings: net interest margin, fees and commissions, trading profits
  • Quality of earnings and performance risk: core versus non-core, operating expense trends, extraordinary events
  • Earnings ratios and measures: return on average assets, return on average equity, net interest margin, fee income, efficiency ratio
  • Assessing earnings quality and identifying red flags: excessive growth, over-concentration, volatile earnings sources, and asset and liability mismatches
  • Symptoms of deteriorating credit standing: financial, non-financial and market indicators

Application case study: Developing a rating of a bank's earnings

12:00 pm


1:00 pm

Asset Quality

  • What is asset quality?
  • Quantitative analysis of asset quality and key ratios
  • Asset mix by type: low risk assets, government paper and inter-bank deposits, higher risk loans and investment securities, off balance sheet items, and credit derivatives
  • Individual asset considerations: size, maturity structure, book versus market value, economic sector, collateral, customer base and concentration
  • Loan portfolio management: monitoring and analysis, problem loan characteristics, adequacy of loan loss provision versus charge-offs
  • Indicators of risk appetite
Application case study: Developing a rating of a bank's asset quality
2:30 pm

Refreshment Break

2:45 pm


  • Composition and quality of capital: reported book equity, adjusted common equity, hybrid capital, economic versus regulatory capital
  • Sources of capital: earnings, asset valuation, capital raising
  • Risk-weighted assets: Tier One and Tier Two capital
  • Basel expectations
  • Key ratios: Tier One and total capital, leverage, tangible common capital, double leverage
Application case study: Developing a rating of a bank's capital
5:00 pm

Day One concludes

7:30 am

DAY TWO - Tuesday, December 10

Continental breakfast opens.

All sessions led by Bill Nayda unless otherwise noted.
8:30 am


  • Funding stability and liquidity
  • Managing and evaluating liquidity
  • Composition of bank’s funding sources
  • Internal reserves as a source of liquidity and funding
  • Ability to access various funding markets and raise capital from private and public sources
  • Liquidity facilities at central banks
  • Possibility of support from government or private shareholders
  • Key liquidity ratios

Application Case Study: Developing a rating of a bank’s liquidity

10:00 am

Refreshment Break

10:15 am


  • Corporate governance and the hierarchy of risk management
  • Risk appetite: linking vision and mission to strategy execution
  • Qualitative nature of management evaluation and red flags
  • Enforcement actions as a measure of management performance
12:00 pm


1:00 pm

Additional Analytical Considerations

  •  Stress-testing
        - Evaluating an institution’s ability to weather periods of stress
        - Lessons from the government’s stress test
  • Interest rate risk management
         - Monitoring and controlling exposure
  • Modeling credit risk factors
2:30 pm

Case study exercise: Developing a Rating and Conclusions

  • Consolidating multiple analyses to develop a comprehensive assessment of an institution's creditworthiness
4:00 pm

Program concludes

Bill Nayda, PhD
Principal, Second Pillar Consulting / SNL Instructor
Mr. Nayda and his team assist banks with risk management initiatives including: Enterprise Risk Management, balance sheet strategy, regulatory exams and relations, capital planning and adequacy, Basel II and III, interest rate risk, portfolio valuation and due diligence, risk based profitability, and model validation.

During the financial crisis, the firm was instrumental in working with several of the newly formed BHC's to become regulated banks. Clients range from top-5 banks to regional and community institutions. The firm has a focus on education, working with boards and management to help them better understand and own the bank's risk. SPC consultants frequently publish in the area of risk management and are interviewed and quoted in many banking periodicals.

Mr. Nayda's almost 20 years of banking and insurance experience is focused on risk management, regulatory compliance, corporate governance and structure, and risk-based pricing. Prior to founding Second Pillar Consulting, he spent ten years at Capital One overseeing balance sheet strategy, economic capital, regulatory relations and pricing models. He has also helped model and manage enterprise risk at Travelers companies and Allied Irish Bank's U.S. subsidiary.

He received his Ph.D. in Economics from Texas A&M University and his B.A. in Economics from Rutgers University. While at Texas A&M, Mr. Nayda conducted economic research into the impacts of global warming under Bruce McCarl who was a recipient of the Nobel Peace Prize for his research on climate change.
Event Date:
December 9-10, 2013
Event Location:
Downtown Conference Center
157 William St
New York, NY, US
Registration Fee:

Your registration includes all program work materials, plus continental breakfast and lunch both days.

Discounts available for groups of three or more. Call us at (434) 951-7786


Fundamentals of Bank Credit Analysis is designed for:

  •  Buy- and sell-side sector analysts
  • Credit analysts
  • Private equity investors
  • Investment banking analysts and associates 
  • Corporate development and corporate finance professionals 
  • Investor relations professionals
  • Banking regulators and staff 
  • Advisors to financial institutions 

This program presumes familiarity with basic bank and finance concepts, as well as a working knowledge of financial institutions’ income statements and balance sheets. Participants will need to bring a laptop computer equipped with Microsoft Excel.


Event Date:
December 9-10, 2013
Downtown Conference Center
157 William St
New York, NY, US
Although lodging is not provided as part of this program, the hotels listed below are convenient to the Downtown Conference Center. Please call the Downtown Conference Center to inquire about negotiated rates or with any other lodging related questions (212) 618-6990.

Millennium Hilton
55 Church St.

Gild Hall
15 Gold St.

Seaport Inn
33 Peck Slip

Hampton Inn Seaport
320 Pearl St.

Conrad Hotel
102 North End Ave.

Eurostars Wall Street Hotel
129 Front St.

Wall Street Inn
9 S William St.

Ritz-Carlton Battery Park
2 West St.
CFA Institute
14 Hours of Continuing Education Credit
SNL Knowledge Center is registered with CFA Institute as an Approved Provider of professional development programs. This program is eligible for 14 CE credits hours as granted by CFA Institute. If you are a CFA Institute member, CE credit for you attendance at this event will be automatically recorded in your CE Diary upon request.
National Association of State Boards of Accountancy
17 Hours of CPE Credit
Participants who complete Bank Credit Analysis qualify for 17 hours of CPE credit (Specialized Knowledge and Applications). Program Level: Intermediate. Delivery Method: Group-Live. SNL Knowledge Center is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 4th Ave N, Ste 700, Nashville, TN, 37219-2417. Website: www.nasba.org.

What is the dress code?
Business casual

Do I need a laptop?
Yes, because this seminar features Excel based analysis, participants will need to bring a laptop computer with access to Microsoft Excel and a calculator.

Is there required pre-reading?
Yes. Prior to the program, participants will receive pre-reading materials via email. We strongly encourage you to review the suggested materials prior to the start of the program.

What is the cancellation policy?
Cancellations for this program are eligible for a full refund, less a $150.00 administrative fee, if received at least 15 business days prior to the start of the program. Cancellations received after that date but at least 5 business days prior to the start of the program receive a credit in the amount of the registration fee, less a $150.00 administrative fee, to attend another SNL CFE program within 13 months. Cancellations received fewer than 5 business days prior to the start of the program are not eligible for a refund or credit.

Attendee substitutions from the same company may be made at any time.

In the event of a cancellation from a group discount, refunds or credits are issued beginning with the most heavily discounted price, minus a $150.00 administration fee.

"No shows" - or those who cancel within 15 days of the program - and have registered under the Invoice option, remain liable for the full program fee.

SNL Center for Financial Education reserves the right to cancel/change programs, content, speakers or venue at any time. SNL CFE reserves the right to make portions of the program registration information available to program sponsors. SNL CFE will not be held liable for any costs incurred by registrant due to individual registration cancellation. In the event that a seminar is cancelled due to inclement weather, faculty cancellation or force majeure, CFE will refund the registrant's tuition in full, however CFE will not be liable for incidental or consequential out of pocket expenses incurred by the registrant. If you have questions regarding SNL CFE's refund, complaint or program cancellation policy, please call us at (434) 951-7786.

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