Bank Analysis School April 2025

Internal Use Only

11 Evaluation of an institution’s lending policies, credit administration, and the quality of the loan portfolio is among the most important aspects of the examination process. To a great extent, the quality of an institution's loan portfolio determines the risk to depositors and to the FDIC's insurance fund. Conclusions regarding the institution’s condition and the quality of its management are weighted heavily by the examiner's findings with regard to lending practices. ” - FDIC Risk Management Manual

11

Internal Use Only

How do Banks Fail?

Interest rate risk materializes

Asset quality issues

Fraud

or

or

Weak earnings

Capital

Liquidity

12