COURSE DESCRIPTIONS

Students are required to complete all of the following core courses:

Asset & Liability Management I (CBE) (CPEL 9) (Class Hours 9)
Edward Krei
Asset & Liability Management I examines the responsibilities of a bank’s Asset Liability function from a practical and performance oriented perspective.   Topics to be discussed include interest rate risk management, liquidity and funding, pricing decisions, and capital management.  The selection and use of A/L models, outsourcing decisions, staffing and managing the A/L process, and organizational issues will be addressed as well. 

Upon completion of this course, the participant should understand the basic financial issues addressed by ALCO and how alternative strategies are effectively assessed and implemented with an objective of maximizing sustained long-term performance while managing risk.   Students should gain an understanding of the Asset Liability management process as it relates to assessing and implementing financial and risk management strategies with particular focus on interest rate risk, liquidity risk, funding alternatives, capital management and the securities portfolio.  Students should gain a basic working knowledge of the ALCO process in his/her institution.  After completing this course, you will have developed your skills to:

• Assess your bank's net interest margin potential
• Evaluate, develop, document and implement financial strategies to better manage risks and improve your bank's overall profitability
• Determine your institution's appropriate balance sheet structure given your risk tolerance
• Learn how to measure interest rate risk for your securities portfolio and the entire bank and prepare for   rising interest rates
• Turn your ALCO into a performance-focused 'financial mission control center

Bank Financial Analysis (CBE) (CPEL 9) (Class Hours 9)

Michael L. Stevens
The course explains the principles of analyzing a bank’s performance and financial condition.  Utilizing the Uniform Bank Performance Report, students will be able to develop a risk profile of a financial institution; evaluate funds management practices; identify and quantify significant changes in a bank's net interest margin; identify credit, market, liquidity, operational, legal, & reputation risks.  Key learning objectives of the course are to:

• Understand the key risk and performance drivers of your bank
• Connect asset quality issues with other risk areas like earnings, liquidity, and capital
• Learn how to perform a comprehensive analysis of your bank’s condition and performance
• Evaluate management’s impact on bank performance

Business Law in Financial Institutions (CBE) (CPEL 9) (Class Hours 7)
John Norwood, JD
This course provides a detailed look at the law affecting banks and bank operations.  The course begins with an overview of law and the legal system and then proceeds to the following topics:  Contracts under common law and the Uniform Commercial Code (UCC), Negotiable Instruments under Articles Three and Four of the UCC, Secured Transactions under Article Nine of the UCC, and Bankruptcy.  Emphasis is on the practical application of established legal principles. Upon completion of this course, students will better:

• Understand the nature of business law and its practical application in banking

• Avoid legal problems caused by a misunderstanding of the applicable law
• Understand the legal process and its impact on banking

Commercial Lending - Level 1 

Making the Commercial Credit Decision (CBE) (CPEL 9) (Class Hours 9)
Jeff Judy
Focus of this session will be on loan transactions and their impact on the institution's asset quality. The session will discuss the Quantitative and Qualitative analytical tools for determining business borrower's creditworthiness. If deemed creditworthy, a borrower must be risk-rated and appropriate loan structure established. As part of loan structuring, the session will discuss collateral, covenants, pricing, and documentation. Monitoring of the borrower should lead to early detection of opportunities for new business or deteriorating asset quality. Intended outcome of the session will be increased awareness of, or more comfort with, commercial credit analysis. Anticipated participants would be anyone not directly involved in credit management or experienced loan officers wishing to get a refresher.

Commercial Lending - Level 2

Managing Commercial Credit Risk (CBE) (CPEL 9) (Class Hours 9)

Jeff Judy
In this session, the focus will be on managing "pools of risk" created through the approval of individual loan transactions. Initial discussion will cover the "Strategic Credit Risk Management Framework". This topic will include discussions of establishing / communicating credit risk controls. From the Risk Framework, the discussion will move to the key components of the Credit Process Framework. Discussion will include the functions involved in portfolio management, portfolio acquisition and portfolio maintenance. Intended outcome is an expanded awareness of credit risk management issues and the tools for management of those risks. Anticipated participants would be anyone involved in the management of credit portfolio or responsible for credit risk management.

Economics for Community Bankers (CPEL 9) (Class Hours 9)
Scott Hein
This course develops a better understanding of the current economic/business conditions in the U.S. and the World. It has four sections. First, basic macroeconomic theory is reviewed. The effects of fiscal policy (federal revenues and expenditures) and monetary policy (Federal Reserve policies toward interest rates and money supply) on the economy are reviewed. Second, recent business conditions and government policies are reviewed. Third, key issues and uncertainties affecting economic forecasts for the next year and beyond are discussed. Fourth, the course concludes by analyzing the effects of various current economic/political issues and problems and how they affect the economy. These issues will include: International economic conditions (Europe and Japan) and exchange rates, U.S. competitiveness, International trade policies and the effects of "free trade" and NAFTA, current U.S. labor market conditions, Health Care, Welfare and Education Reform.

Upon completion of this course, students will be able to:

• Understand the many dimensions associated with the cause and depth of today’s financial crisis.

1.       Recognize that the financial crisis has had the greatest adverse impact on the very large banks and financial institutions originally outside the banking industry.

2.       Be able to explain the major means by which the federal government and banking regulators have responded to mitigate major concerns and how this changed the financial landscape for your bank.

3.       Be able to explain the uniqueness of community banking and why this business model appears to have better weathered the financial crisis.

·         Understand that interest rates move with market forces associated with inflation/deflation, economic growth, risk factors, maturity and tax differences..

1.       Be able to articulate the current level and structure of interest rates in the US financial system and how this effects your bank.

2.       Be able to explain why community bankers should worry about the future course of inflation, and be able to explain the distinction between nominal interest rates and real interest rates and why this distinction is important for your bank to understand.

3.       Be able to explain how market interest rates should evolve if the economy stops declining and once again starts growing.

·         Understand and be able to explain the unique powers afforded the Federal Reserve System in the US Financial System.

1.       Be able to understand and explain the difference between the Federal Reserve and the US Treasury and why this matters for your bank.

2.       Be able to explain how the Fed has responded to the financial crisis and how the Fed’s balance sheet has changed and how this has impacted your bank.

3.       Be able to explain why the expansionary forces of the Fed over the last year has not caused inflation yet, but might in the future.  Be able to explain what to look for as to whether the Fed will succeed or not in preventing inflation over the next five years and how to position the bank to respond.

·         Be able to explain the most important ways that your bank has been impacted by the unexpected changes in the economy.

1.       Be able to explain the major reasons that your institution’s net income has changed from 2009 to 2010.  Explain if there is an economic link or not.

2.       Explain how both credit losses and loan demand for your institution have changed over the last year and why.  Explain if there is an economic link or not.

3.       Explain how your institution’s capital base has changed over the last year and why.  Explain if there is an economic link or not

·         Be able to look forward and develop thoughts as to how the economy will evolve over the next five years.

1.       Be able to articulate the major economic matters facing the country and the current plan to deal with these matters.

2.       Be able to differentiate economic matters and policies from political matters and policies. Explain why this distinction is important to your bank.

·         Develop leadership skills by being knowledgeable about the key economic questions of the day and to be able to speak authoritatively on these matters.

Marketing Financial Services (CPEL 9) (Class Hours 7)
Rex Bennett, Ph.D.
This course focuses on competitive strategies that banks can use to attain strategic, sustainable advantage and achieve superior profitability over the long-term in spite of competitor actions, customer/market shifts, and even the incredible industry and business environment changes of past year. Customer-driven differentiation is the essence of such strategies. This course will focus on competitive advantage strategies, the profit implications of market strategies, factors affecting customer satisfaction/dissatisfaction, creating and sustaining high value-added experiences and identifying and reducing the three major GAPS that prevent a bank from achieving exceptional financial performance. The emphasis is on specific, practical techniques that bank managers can use to achieve competitive advantage and increased profitability for their branches, departments, or bank.

Achieving a Sustainable Competitive Advantage emphasizes the importance of developing effective strategies to enhance advantage and profitability in the increasing competitive and dynamic banking and financial industry.

Technical and financial skills remain essential components of successful bank management; but, increasingly, skills in strategic and competitive analysis, organizational and market assessment, differentiation, and delivery of high-value added products/service which create exceptional customer satisfaction are critical for bank success and even survival.

The purpose of this course is to provide understanding of the profit implications of strategies and to develop skills in assessing and implementing these strategies for competitive advantage.  After successfully completing this course, students will be able to:

• Describe a sustainable competitive advantage and identify the most important components for achieving it
• Examine strategies for customer acquisition and retention via advertising, websites, and the use of social media
• Understand the factors that affect profitability and a bank’s ability to achieve superior profitability
• Recognize the negative impacts on profits associated with poor customer satisfaction and understand how to estimate these costs for your individual bank
• Use data gathering and models to estimate customer loss ratios and their impacts of profitability
• Understand and be able to measure and evaluate the three major GAPS that contribute to a bank’s failure to achieve customer satisfaction, competitive advantage, and superior profitability

How to Make the Retail Bank Work for You (CPEL 7) (Class Hours 7)

Kate Stackhouse

What business are banks really in? This four day comprehensive course provides managers with valuable ways to differentiate your bank and create institutions that are fiercely competitive even in the toughest of markets. The course examines the vital role of defining a company culture, creating a customer experience and redefining what a bank can be. This course will give you tools to…

• differentiate yourself from the competition
• retain loyal customers and attract new ones
• enhance the bottom line
• remain competitive as customer preferences change

The course further explores explore the perils of this changing industry and what banks need to be aware of if they are to survive.

Using Myers-Briggs to Better Understand Yourself and Others (CPEL 7) (Class Hours 7)

Allyson Aragon-Fenton

In this course the Myers-Briggs Type Indicator (MBTI) will be used to provide students with an accurate picture of their personality type. The MBTI instrument determines preferences on four dichotomies: - Extraversion–Introversion: describes where people prefer to focus their attention and get their energy—from the outer world of people and activity or their inner world of ideas and experiences - Sensing–Intuition: describes how people prefer to take in information—focused on what is real and actual or on patterns and meanings in data - Thinking–Feeling: describes how people prefer to make decisions—based on logical analysis or guided by concern for their impact on others - Judging–Perceiving: describes how people prefer to deal with the outer world—in a planned orderly way, or in a flexible spontaneous way We will look at how the combinations of these preferences result in 16 distinct personality types and how the characteristics unique to each personality type, provides insight on how they influence an individual’s way of communicating and interacting with others.

Upon completion of this class, students will:

•          Increase self-awareness and confirm self-perception

•          Discover normal differences in people concerning:

–         Energy Source

–         Information Gathering

–         Decision Making

–         Life Style

•          Appreciate their gifts and strengths as well as those of others

•          Learn how to capitalize on their strengths and the strengths of others

•          Supplement and augment those areas that they may overlook or those areas that do not come easily to them

•          Apply the knowledge about personality type

Students are required to complete all of the following core courses:

Asset and Liability Management II - Level 1 (CBE) (CPEL 9) (Class Hours 9)
Timothy W. Koch, Ph.D.
This course builds on the foundation provided in Asset and Liability Management I by examining in detail the various components to bank profits and aspects of risk management at community banks. The primary focus is on the management of net interest income and economic value of equity, deposit strategies, alternative funding strategies, liquidity planning and the management of capital. Specific topics include how to incorporate current economic data in planning, GAP and earnings sensitivity analysis, duration and economic value of equity sensitivity analysis, core deposit analytics, managing liquidity via balance sheet measures and cash flow measures, the choice of maturities in funding decisions and the choice of loans and securities, and external capital management. The course also introduces the basics of interest rate swaps, caps and floors. Particular emphasis is placed on the nature of policy statements and their use in managing risk. Participants will engage in several exercises requiring risk management decisions with a comprehensive case study of a bank’s ALCO information and risk management practices.

Upon completion of this class, students will be able to:

• Assess the importance of key economic indicators for managing interest rate and liquidity risk,
• Understand how to measure and manage interest rate risk according to GAP and earnings sensitivity analysis,
• Understand how to measure and manage interest rate risk according to duration-based measures of risk and economic value of equity sensitivity analysis,
• Evaluate the strengths and weaknesses of balance sheet measures of liquidity risk and cash flow measures/models of liquidity risk,
• Evaluate funding strategies involving FHLB advances and other leverage alternatives,
• Critique the costs and benefits of different forms of external capital,
• Evaluate the implied value of options embedded in callable bonds and mortgage-backed securities,
• Critique specific policy objectives and policy targets for interest rate risk and liquidity risk.

Asset and Liability Management II - Level 2 (CBE) (CPEL 9) (Class Hours 9)
Timothy W. Koch, Ph.D.

This course is intended for participants with a strong background in finance and/or asset and liability management. It will examine detailed models of interest rate risk analytics in order to identify key underlying assumptions, requirements for back testing outcomes, and the implications for policies. It will document the nature of options embedded in balance sheet items and demonstrate applications of interest rate swaps, caps and floors for pricing and risk management purposes at community banks. The course also addresses issues related to transfer pricing, measuring product or line of business profitability, contingency funding, and option-adjusted spread analysis applied to a community bank’s bond portfolio. Emphasis will be on identifying and measuring risk, monitoring risk, and setting policy targets.

Upon completion of this class, students will be able to:

• Assess the importance of key economic indicators for managing interest rate and liquidity risk,
• Understand how to measure and manage interest rate risk according to GAP and earnings sensitivity analysis,
• Understand how to measure and manage interest rate risk according to duration-based measures of risk and economic value of equity sensitivity analysis,
• Evaluate the strengths and weaknesses of balance sheet measures of liquidity risk and cash flow measures/models of liquidity risk,
• Evaluate funding strategies involving FHLB advances and other leverage alternatives,
• Critique the costs and benefits of different forms of external capital,
• Evaluate the implied value of options embedded in callable bonds and mortgage-backed securities,
• Critique specific policy objectives and policy targets for interest rate risk and liquidity risk.

Banking Small Business (CPEL 9) (Class Hours 9)
Kyle Enger
This class is unique because it is both sales and credit training together and is tailored for all bankers who have contact with business owners. It discusses how to call on and effectively serve small business clients and build and sustain relationship banking. It is both practical and hands-on, as it uses actual case experiences and role plays to reveal the problems of entrepreneurs and gives bankers the tools to understand and communicate with non-financially oriented owners or managers of businesses with sales under $15 million. This course provides insights into small business owners' expectations and attitudes that will help create the ability to add value to customer relationships.

Loan Portfolio Management (CPEL 9) (Class Hours 9)
John Barrickman

This five-day course introduces participants to a strategic framework for portfolio credit risk management focusing on the integration of priorities, culture, risk strategy, and risk controls. Risk management consists of two components - the types and magnitude of risks assumed and how the institution manages the risk.  Students will have the opportunity to develop a subjective credit risk profile for their institution integrating transaction, intrinsic and concentration risk. The profile will allow students to assess their bank's vulnerability to the three deadly sins of portfolio management. Students will then have an opportunity to benchmark their bank's credit risk management practices against best practices.

Understanding Your Firm's Corporate Culture for Strategic Alignment (CPEL 9) (Class Hours 9)
David Nowling
This course will offer insight into what today’s top leaders and managers do to align their strategies with their culture.  Do you understand your bank’s culture and how it affects your leadership strategies?  Do you know how to attract and retain top talent that is right for your bank?  How do you change and align your culture with your strategies and the markets in which you operate?  What is your sense for the urgency for change and your readiness to change?  These are just some of the questions that will be discussed in this course.  This course will include the completion of several assessment tools, as well as discussion around essential competencies required in today’s changing economy.  It will provide the student with proven strategies for building your bank into a true “premier employer of choice”.  It will also serve as the building block for your own continued personal assessment and development.

Second year students will select two of the following courses:

Commercial Real Estate Lending (CPEL 9) (Class Hours 9)

Richard Hamm

Commercial real estate (CRE) loans are a large and important component of the total loan portfolio of most banks.  In their purest form, CRE loans involve income-producing properties where rent received from unaffiliated third parties is the primary source repayment.  Other forms of CRE loans involve manufacturing plants and warehouses for use by the business that owns the property-where the income of the business is the bank’s analytical focus.  Still other CRE situations involve hotels, convenience stores and churches.  This diverse range of lending requires special skills and experience, centered around the six “keys” to successful CRE lending.  Accordingly, by the end of this class participants will be able to:

1.      Identify the major risk areas in CRE lending, along with ways to mitigate or reduce the risks

2.      Differentiate the CRE analysis and underwriting process by property or project types

3.      Explain the concept of sponsorship (guarantor experience)

4.      Identify appraisal and environmental policies and regulations

5.      Administer and monitor loans post-closing

6.      Identify the primary steps to maintain CRE portfolio diversification

In addition to the objectives based on the six keys, participants will also:

• Calculate and evaluate the net operating income (NOI) of an income-producing property, plus related ratios such as debt service coverage (DSC) and loan to value (LTV)
• Conduct and evaluate – at the transaction level – stress testing of the analytical ratios
• Determine a project’s supportable loan amount and break-even points for vacancy and loan interest rate
• Explain the capitalization (“cap”) rate and its function in valuing a commercial property

The class will include analytical cases and group exercises to achieve these objectives.

Leading Organizational Change in the 21^st Century (CPEL 9) (Class Hours 9)

David P. Nowling