NEW! Bank Financial Modeling

Construct a bank financial model by building a bank balance sheet and derived income statement. Project gross loan balance, provisions for credit losses, gross charge-offs, recoveries, net charge-offs, net loan balance based on important key trends and ratios. Predict the critical funding requirements on the liability side of the balance sheet to support the loans and asset side. Learn the techniques and best practices to balancing the bank model. Examine different techniques to estimate the crucial interest-earning assets and interest-bearing liabilities. Estimate asset yield, funding costs and net interest spread to minimize forecasting error. Identify line items that constitute non-interest fee revenue beyond using simple percent growth rates. Incorporate and integrate provision for credit losses. Calculate compensation and overhead expenses and leave with a completed balance sheet and income statement.

Prerequisite: Complete grasp and understanding of a bank’s financial statements. The class will not cover certain operating assumptions such as mix of loan portfolio growth and detailed build-up of reserves provisions, nor will it build a fully integrated cash flow statement.
Note: Bring your PC laptop with Microsoft Excel installed and a CD-ROM drive. Mac applications may not be as effective.

Recommended: Analyzing and Interpreting Bank Financial Statements Primer on April 20 is highly recommended for the new bank analyst.