FDIC TE Prep
ALLL up to 1.25% of risk-weighted assets
qualifying preferred stock
Subordinated debt
Qualifying tier 2 minority interest, less any deductions in the tier 2 instrument of an unconsolidated
financial institution. - Answer-What is included in tier 2 capital?
To ensure public confidence in the banking system and to protect the DIF - Answer-What is the purpose
of the FDIC conducting bank examinations?
Contact the regional office to discuss with the CM or the ARD - Answer-What should examiners do
before discussing proposed ratings of a 3 or worse rated bank?
Empower examiners to make thorough examination of the banks affairs - Answer-Sections 10(b) and
10(c) of the FDI do what?
The quality of management - Answer-What is often the single most important factor of a successful
operation of an insured institution?
Part 309 of the FDIC rules and regs - Answer-Examination findings, including the composite and
component ratings, are subject to confidentiality under which regulation/rule?
for any bank newly assigned a CAMELS composite 3 or worse - Answer-When should an examination
letter be delivered to the CEO/President during an exit meeting?
,every 12 months - Answer-Under Section 10(d) of the FDI act, how often must insured branches of
foreign banks be examined?
18 months - Answer-Section 347.211 of the FDIC rule and regs states that domestic branches of foreign
banks can be considered for examination every ___________ months?
6 months - Answer-Limited scope examinations should be performed how many months after an
enforcement action is issued?
~the bank has total assets of $3 billion or less
~ the bank is well capitalized as defined in 323.403(B)(1) of FDIC rules and regs
~the ban was assigned a management rating of 1 or 2 at the last examination
~the ban was assigned a composite rating of 1 or 2 at the last exam
~the bank is not subject to formal enforcement proceedings or order by the FDIC, OCC< or FRB
~no person acquired control of the bank during the preceding 12 months in which the last full-scope
examination was completed - Answer-When can examination schedules be extended to 18 months for a
state nonmember bank?
The FFEIC to issue guidelines establishing standards for the purpose of determining the acceptability of
state reports of examination. - Answer-Section 10(D)(9) ofthe FDI act requires what?
2 weeks - Answer-How much times notice should a bank be given for notice of an up coming
examination and provided enough time to complete pre-examination request
With the FDIC absorbing 80% of injured losses (up to a stated threshold) and receives 80 percent of
recoveries - Answer-How are shared-loss agreements generally written?
,5 years for losses and 8 years for recoveries - Answer-How many years are commercial, shared loss
agreements generally cover how many years for losses and recoveries?
10 years for both - Answer-For residential mortgages, shared losses agreements generally cover how
many years for losses and recoveries?
The assets should be adversely classified (sub, doubt, loss) and be reduced by the applicable coverage
rate stated in the SLA (often 80% or 95%) - Answer-How should an asset covered under a shared loss
agreement be classified?
All deficiencies and supervisory recommendations that will be cited in the ROE. - Answer-During an exit
meeting, management should be made aware of what?
~36 months or more have elapsed since the last such meeting
~the management component is 3 or worse
~two component ratings are 3 or worse
~or any other CAMEL rating is 4 or 5 - Answer-When is a board meeting required?
Uniform Interagency Trust Rating System; composites 1-5. - Answer-What system was devised to rate a
Trust department and what composite ratings are established?
~management
~operations, internal controls, and audits
~earnings
~compliance
~asset management - Answer-What five critical areas are evaluated in a Trust exam?
, To determine confidentiality, integrity, and availability of records produced my automated systems -
Answer-What is the primary purposed of an IT exam?
The Uniform rating System for Information Technology (URIST) - Answer-IT operations are rated in
accordance to?
~Management
~Audit
~Support and Delivery
~development and acquisition - Answer-What four areas are evaluated in an IT examination?
To ensure U.S. financial institutions maintain appropriate records and file certain reports involving
currency transactions and customers relations. - Answer-What is the purpose of a BSA examination?
Section 501(b) of the Gramm-Leach-Bailey Act - Answer-Examiner information ,may contain non-public
customer information defined by what?
1 examination cycle - Answer-How long should line sheets be retained
10 years, indefinitely when irregularities are discovered or suspected. - Answer-How long should risk
management and trust questionnaires be retained?
Composite 1 - Answer-Financial institutions in this group are sound in every respect and generally have
components rated 1 or 2. Any weaknesses are minor and can be handled in a routine manner by the
board of directors and management. These financial institutions are the most capable of withstanding
the vagaries of business conditions and are resistant to outside influences such as economic instability in
their trade area. These financial institutions are in substantial compliance with laws and regulations. As a
result, these financial institutions exhibit the strongest performance and risk management practices
relative to the institution's size, complexity, and risk profile, and give no cause for supervisory concern.
ALLL up to 1.25% of risk-weighted assets
qualifying preferred stock
Subordinated debt
Qualifying tier 2 minority interest, less any deductions in the tier 2 instrument of an unconsolidated
financial institution. - Answer-What is included in tier 2 capital?
To ensure public confidence in the banking system and to protect the DIF - Answer-What is the purpose
of the FDIC conducting bank examinations?
Contact the regional office to discuss with the CM or the ARD - Answer-What should examiners do
before discussing proposed ratings of a 3 or worse rated bank?
Empower examiners to make thorough examination of the banks affairs - Answer-Sections 10(b) and
10(c) of the FDI do what?
The quality of management - Answer-What is often the single most important factor of a successful
operation of an insured institution?
Part 309 of the FDIC rules and regs - Answer-Examination findings, including the composite and
component ratings, are subject to confidentiality under which regulation/rule?
for any bank newly assigned a CAMELS composite 3 or worse - Answer-When should an examination
letter be delivered to the CEO/President during an exit meeting?
,every 12 months - Answer-Under Section 10(d) of the FDI act, how often must insured branches of
foreign banks be examined?
18 months - Answer-Section 347.211 of the FDIC rule and regs states that domestic branches of foreign
banks can be considered for examination every ___________ months?
6 months - Answer-Limited scope examinations should be performed how many months after an
enforcement action is issued?
~the bank has total assets of $3 billion or less
~ the bank is well capitalized as defined in 323.403(B)(1) of FDIC rules and regs
~the ban was assigned a management rating of 1 or 2 at the last examination
~the ban was assigned a composite rating of 1 or 2 at the last exam
~the bank is not subject to formal enforcement proceedings or order by the FDIC, OCC< or FRB
~no person acquired control of the bank during the preceding 12 months in which the last full-scope
examination was completed - Answer-When can examination schedules be extended to 18 months for a
state nonmember bank?
The FFEIC to issue guidelines establishing standards for the purpose of determining the acceptability of
state reports of examination. - Answer-Section 10(D)(9) ofthe FDI act requires what?
2 weeks - Answer-How much times notice should a bank be given for notice of an up coming
examination and provided enough time to complete pre-examination request
With the FDIC absorbing 80% of injured losses (up to a stated threshold) and receives 80 percent of
recoveries - Answer-How are shared-loss agreements generally written?
,5 years for losses and 8 years for recoveries - Answer-How many years are commercial, shared loss
agreements generally cover how many years for losses and recoveries?
10 years for both - Answer-For residential mortgages, shared losses agreements generally cover how
many years for losses and recoveries?
The assets should be adversely classified (sub, doubt, loss) and be reduced by the applicable coverage
rate stated in the SLA (often 80% or 95%) - Answer-How should an asset covered under a shared loss
agreement be classified?
All deficiencies and supervisory recommendations that will be cited in the ROE. - Answer-During an exit
meeting, management should be made aware of what?
~36 months or more have elapsed since the last such meeting
~the management component is 3 or worse
~two component ratings are 3 or worse
~or any other CAMEL rating is 4 or 5 - Answer-When is a board meeting required?
Uniform Interagency Trust Rating System; composites 1-5. - Answer-What system was devised to rate a
Trust department and what composite ratings are established?
~management
~operations, internal controls, and audits
~earnings
~compliance
~asset management - Answer-What five critical areas are evaluated in a Trust exam?
, To determine confidentiality, integrity, and availability of records produced my automated systems -
Answer-What is the primary purposed of an IT exam?
The Uniform rating System for Information Technology (URIST) - Answer-IT operations are rated in
accordance to?
~Management
~Audit
~Support and Delivery
~development and acquisition - Answer-What four areas are evaluated in an IT examination?
To ensure U.S. financial institutions maintain appropriate records and file certain reports involving
currency transactions and customers relations. - Answer-What is the purpose of a BSA examination?
Section 501(b) of the Gramm-Leach-Bailey Act - Answer-Examiner information ,may contain non-public
customer information defined by what?
1 examination cycle - Answer-How long should line sheets be retained
10 years, indefinitely when irregularities are discovered or suspected. - Answer-How long should risk
management and trust questionnaires be retained?
Composite 1 - Answer-Financial institutions in this group are sound in every respect and generally have
components rated 1 or 2. Any weaknesses are minor and can be handled in a routine manner by the
board of directors and management. These financial institutions are the most capable of withstanding
the vagaries of business conditions and are resistant to outside influences such as economic instability in
their trade area. These financial institutions are in substantial compliance with laws and regulations. As a
result, these financial institutions exhibit the strongest performance and risk management practices
relative to the institution's size, complexity, and risk profile, and give no cause for supervisory concern.
