Freshmen Preparation: Bank Accounting
Pre-Session Assignment/GoToMeeting Class
As part of Asset/Liability Management for freshmen, students will attend two one-hour sessions through GoToMeeting with opportunities to ask questions. The sessions will be held one week apart and about two weeks prior to going to school at Fort Lewis College. Students will receive an invitation to participate (mandatory), be sent a useful handout, and attend the pre-sessions which are designed to help students participate more effectively in Mr. Rowley’s Asset/Liability Management class on campus.
The objective of this course is to first provide a detailed understanding of the dynamics of a financial institution’s balance sheet and resultant income. Once those dynamics are presented, the areas of interest rate risk and liquidity are discussed by demonstrating methods to measure those risks. Because the Federal Reserve Bank is instrumental in setting interest rates which affect a bank’s interest rate risk position, the monetary tools of the fed will be discussed to enable the students to have a better understanding of interest rate risk. Once those risks are identified strategies will be presented to manage the risks to the benefit of the institution while staying in compliance to the policies approved by its board of directors. Both on- and off-balance sheet practical interest rate risk tools to mitigate these risks will be presented. Students will be expected to participate in an exercise to create their own balance sheet strategies in a hypothetical bank presented in class. In addition to the asset/liability management concepts presented, the Uniform Bank Performance Reports will be reviewed as a means to analyze individual banks against their peer group of banks across the country.
Concepts presented in the first year session of Asset/Liability Management will be used to complete an intersession project. The students will be expected to present clear and concise strategies to a realistic bank situation where the problem bank is out of compliance to asset/liability management policies as established by the hypothetical bank’s board of directors. Included in the response from the students will be a need to understand the ramifications of their strategy on all aspects of the bank to include: capital considerations, what steps need to be taken to implement the strategy and the positives and negatives to the resultant earnings of the bank.
The students will also be required to do a financial analysis of their own bank’s financials based upon a peer analysis developed by them using the Uniform Bank Performance Reports (UBPR). An understanding of the UBPR is presented in the Asset/Liability Management class that will assist the students in this portion of the intersession project.
Phill S. Rowley is President & Chief Executive Officer of Treasury Management Services, Inc., specializing in asset/liability management services for start-up to mid-sized financial institutions and is a founding director of Hurdle Group, Inc., specializing in loan pricing models for financial institutions. He has asset/liability management experience in both small and large financial institutions since 1970, having worked in various financial positions at First Interstate Banks of Arizona, Denver, and Des Moines. He also managed Capital and Financial Risk Management at U.S. Bancorp in Portland, Oregon, prior to the position of Treasurer of Northwest National Bank, Vancouver, Washington. Phill graduated with a BBA from Eastern New Mexico University, an MBA from Arizona State University, and is a graduate of the ABA Business of Banking School and Pacific Coast Banking School. Rowley has been teaching WSSB students since 2007.