Trust Examiner School - September 2023

Trust Dept./Trust Co.

Date of Exam

Charter #

Prepared By

#4 –FIDUCIARY EARNINGS ( Risk Focused ) ASSIGNMENT OVERVIEW

Fiduciary earnings review encompasses an evaluation of the institutions operating results and earnings trends, and the probable effect thereon of the volume and character of present and anticipated future business. Profit and cost accountability, and the institution’s understanding of it, are of considerable importance and will directly or indirectly affect the long-term viability of the institution. Each institution has its own unique mix of accounts and circumstances to be analyzed and monitored for profitability. In conducting any analysis of this area, examiners should recognize that conclusions will be effected by such factors as management’s attitude toward the trust function, the limited abilities of smaller institutions, policies on allocation of credits for deposit balances, and the current lack of uniform accounting or profit measurement standards. INSTRUCTIONS Examiners must follow the requirements in the Examiner Bulletin addressing Guidelines for Procedures and Work Paper Documentation for Commercial Examinations. All examiners performing these procedures must be listed above in the “Prepared By” section. All of the CORE ANALYSIS PHASE should be completed. Comments and findings for each step should be made in the comment box below each question. Reference to work paper documentation should also be included here. Documentation is to be sufficient to allow an audit trail of the examiner’s thought process and all significant findings. Based on any significant/critical findings in the CORE ANALYSIS PHASE or as directed by the EIC, the applicable SUPPLEMENTAL ASSESSMENT PHASE (SAP) should also be performed. Responses should be entered in the SAP. Conclusions from performing the SAP should be added to the corresponding CORE ANALYSIS comment section. Indicate if the SAP is performed, in the comment section. The Summary of Findings page contains strengths, weaknesses, and management’s response to the weaknesses. The SEIC/EIC should determine which comments on the Summary of Findings will be included in the Report of Examination. The EIC/AEIC should review this procedure when complete. Acknowledgement that this procedure has been reviewed by the EIC/AEIC will be indicated on the SCOPE FORM. E XAMINERS ARE RESPONSIBLE FOR EXERCISING SOUND JUDGMENT AND UTILIZING REASONABLE INVESTIGATIVE AND ANALYTICAL SKILLS TO ARRIVE AT AN ACCURATE ASSESSMENT OF THE RISK PROFILE OF THIS SEGMENT OF THE INSTITUTION ’ S OPERATIONS . P ERFORMING ALTERNATE PROCEDURES NOT LISTED WITH THESE GUIDELINES MAY BE NECESSARY TO COMPLETE THIS RISK ANALYSIS .

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RF-T04-Fiduciary Earnings (9/20/19)

Texas Department of Banking