Hello you brave souls that are looking forward to returning to the grounds of SMU for Level II of the Bank Operations Institute!!

To learn more about risk management and to prepare you for the BANKdynamics bank simulation you will use during the Level Two year, you will now be involved in an exercise involving “Maverick Bank”. This exercise will ensure that you are ready to hit the ground running on Sunday, October 10th, in the simulation which will employ all of your banking knowledge.

To accomplish this, you will be completing a pre-course assessment based on Maverick Bank & Trust. Attached you will find the Executive Report on Maverick Bank and Trust for the period ending December 31, 2020. The attached information related to the assets, liabilities, income, expense, capital, and trends for MB&T, along with your recent mastery of UPBR information, will provide you with the basis for completing your assessment. You are expected to document the results of your assessment using the attached form.

The results of your assessment will need to be submitted by the due date of September 13th. As you are completing your assessment, you should be working to identify (based on current and historical performance) the strategy MB&T’s management should employ in the future. During the week on campus, you and your team mates will be MB&T’s management. Keep in mind, a large part of the in-class exercise will be graded against how well your bank performs against the goals your team sets regarding asset quality, liquidity, interest rate risk, earnings performance, growth/trends, and capital adequacy.  Quick example- a previous year’s banks placed the heaviest weighting on growth, and selected as their measurement criteria “balanced growth”. While they had the heaviest loan growth for much of the exercise, deposit growth lagged significantly and a high volume of fed funds had to be purchased- clearly not balanced growth. Therefore, the team did not score well regarding this goal.

After the initial exercise is complete (remember, due date is September 13th!) and results have been evaluated, Brad Olson with Olson Research will host a Webinar on the BANKdynamics simulation. Your teams will have been assigned at that point, and you will have access to the model during and after the webinar, until shortly before the start of school. The webinar will be presented twice in order to manage group size, and is tentatively scheduled for Tuesday, September 28th and Tuesday, October 5th at 12:00 noon CDT. An additional time for questions and any refresher about navigating the model will be held later the second week, on Thursday, October 7th at 12:00 noon, CDT. This review of the BANKdynamics model, and how we will be using it during your week at SMU, should help finish preparing you for the kick-off on Sunday, October 10th. Please make note of any questions that may arise during your initial assessment so you can discuss those during the webinar. If you have questions during the assessment, please email them to lwalden at mybankersbank dot com. Once you’ve completed the assessment form, please send it to Lyle at this same email address.

Greetings! Knowing that you are anxiously awaiting the arrival of your second BOI case study, I am pleased to report that you wait has ended!

Your case study is attached in three files. Start by opening the one entitled, “BOI Case Study #2” and it will guide you through the exercise. Your solutions will be due on August 1 and should be sent to the following e-mail addresses:
•  jay at cerfis dot com
•  mlange at ibat dot org
•  jcourtney at ibat dot org

There will be an area of the discussion board set up for you to help each other. Lyle Walden, who will be guiding your bank simulation, will be available there to answer your questions and make suggestions. Please remember that part of the honor graduate designation will be based on your class leadership so use the discussion board as a place to lead (remember…silent reading does not a leader make J)! As a reminder, you access the discussion board by going to http://www.cerfis.com and clicking on the “Discussion Board” tab.

Most of you have little familiarity with the investment portfolio so use this as an opportunity to learn and NOT an opportunity to increase stress. If you approach it positively, it will be a positive experience…trust me and have fun!

Jay

R. Jay Phillips
Cerfis Group, Inc.
4037 Herschel Avenue
Dallas, TX   75219
214-455-8846
214-559-2352 (f)

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2010/fil10018.html

Summary:  On September 9, 2009, the FDIC Board of Directors approved a rule to finalize: (1) the deposit insurance coverage regulations to reflect the extension of the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 through December 31, 2013, and (2) the 2008 interim rules regarding revocable trust accounts and mortgage servicing accounts. 

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2009/fil09053.html

Summary:  On May 22, 2009, the FDIC adopted a final rule imposing a 5 basis point special assessment on each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009. The amount of the special assessment for any institution will not exceed 10 basis points times the institution’s assessment base for the second quarter 2009. The special assessment will be collected on September 30, 2009. An additional special assessment of up to 5 basis points later in 2009 is probable, but the amount is uncertain. 

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2009/fil09023.html

Summary:  On May 20, 2009, President Barack Obama signed the Helping Families Save Their Homes Act, which extends the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 per depositor through December 31, 2013. This extension of the temporary $250,000 coverage limit became effective immediately upon the President’s signature. The legislation provides that the SMDIA will return to $100,000 on January 1, 2014. 

Distribution:
All FDIC-Insured Institutions

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2009/fil09022.html

Summary: On March 17, 2009, the FDIC adopted an interim rule that extends the debt guarantee component of the Temporary Liquidity Guarantee Program and imposes surcharges on existing rates for certain debt issuances. 

Highlights:

All participating entities that are insured depository institutions (IDIs) and all other participating entities that have issued guaranteed debt before April 1, 2009, may issue guaranteed debt during the extended issuance period that ends on October 31, 2009, without having to apply to do so.
Other participating entities must apply to the FDIC by June 30, 2009, to issue guaranteed debt during the extended issuance period.
For entities that are eligible to issue FDIC guaranteed debt after June 30, 2009, the guarantee on debt issued on or after April 1, 2009, will expire no later than December 31, 2012. However, the guarantee on debt issued before April 1, 2009, will expire no later than June 30, 2012.
A surcharge will be added to existing fees for certain guaranteed debt that has a maturity of one year or greater. Surcharges will be placed directly in the Deposit Insurance Fund, which should enable the FDIC to reduce the special assessment announced by the Board on February 27th.
For such one-year-or-greater debt that is issued on or after April 1, 2009, and on or before June 30, 2009, and that matures on or before June 30, 2012, the annualized assessment rate will be increased by 10 basis points for debt issued by an IDI and 20 basis points for debt issued by other participating entities.
For such one-year-or-greater debt that either is issued on or after April 1, 2009, and matures beyond June 30, 2012, or is issued after June 30, 2009, the annualized assessment rate will be increased by 25 basis points for debt issued by an IDI and 50 basis points for debt issued by other participating entities.
A participating entity that has paid the nonrefundable fee to issue non-guaranteed debt with a maturity after June 30, 2012, may apply to issue shorter-term non-guaranteed debt after June 30, 2009.
Any other participating entity that wishes to issue any non- guaranteed debt (regardless of maturity) after June 30, 2009, must also apply to do so.

With banks and the economy in the news so much lately, many people are thinking more about the safety of their money. The good news for consumers is that federal insurance coverage has significantly increased, primarily as a result of a temporary boost in the basic insurance limit from $100,000 to $250,000.  That’s also why the Federal Deposit Insurance Corporation has issued an explanation of the new changes along with tips and information to help bank customers better understand their insurance coverage and how to be sure all their deposits are fully protected.

The advice was published as a special edition of the agency’s FDIC Consumer News (the Fall 2008 issue) entitled “Your New, Higher FDIC Insurance Coverage: How You Can Be Fully Protected,” which can be read or printed at http://www.fdic.gov/consumers/consumer/news/cnfall08.  To order up to two free paper copies, use the online form on that same Web page or call the Federal Citizen Information Center toll-free at

1-888-8- PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time and ask for Department 89. 

The FDIC encourages financial institutions, government agencies, consumer organizations, educators, the media and anyone else to help make the tips and information in FDIC Consumer News widely available.  The publication may be reprinted in whole or in part without advance permission.  Organizations also may link to or mention the FDIC Web site.  See the Web site above for more details.

The goal of FDIC Consumer News is to deliver timely, reliable and innovative tips and information about financial matters, free of charge. Current and past issues of FDIC Consumer News, including previously published special editions, are online at http://www.fdic.gov/consumernews.

Temporary Liquidity Guarantee Program
FDIC Board of Directors Adopts Final Rule FIL-132-2008
November 21, 2008

Summary:  On November 21, 2008, the FDIC adopted the attached Final Rule implementing the Temporary Liquidity Guarantee Program (TLG Program) inaugurated October 14, 2008. The TLG Program consists of two basic components: a guarantee of newly issued senior unsecured debt of banks, thrifts, and certain holding companies (the debt guarantee program) and full guarantee of non-interest bearing deposit transaction accounts, such as business payroll accounts, regardless of dollar amount (the transaction account guarantee program). The purpose of the guarantee of transaction accounts and the debt guarantee is to reduce funding costs and allow banks and thrifts to increase lending to consumers and businesses. As the result of more than 700 comments received, the Final Rule makes several important improvements. 

Distribution:
All FDIC-Insured Institutions

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2008/fil08132.html