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Bank and FIG Modeling

Developed for FIG-focused investment bankers, equity research analysts and corporate finance teams at banks, the bank modeling program guides trainees through a bank’s financial statements, unique drivers, and regulatory framework. Trainees then build a fully integrated financial statement model, a residual income (RI) model, and a dividend discount model (DDM) using Valley National Bank as a case study.

Course Manual and Modeling Samples

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WSP Course Manual

Bank Modeling Course Guide Sample

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WSP Course Manual

Bank Modeling Industry Primer Sample

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Sample Bank Modeling Template

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What You Will Learn

Section One: Building a bank forecast model

  • Build an advanced bank forecast model, projecting asset and liability balances, interest rates and spreads for key assets and liabilities, using industry best practices
  • Learn to effectively forecast the loan portfolio, investment securities, and deposits
  • Understand the modeling and forecasting of allowances for loan losses and net charge offs (NCOs)
  • Model regulatory constraints and analyze effects on leverage, capital ratios, and profitability
  • Forecast net interest income (NII), asset yields, funding costs and interest earning assets (IEA) and liabilities (IBL) using an approach that takes into account typical disclosure gaps, is internally consistent, and avoids common modeling pitfalls
  • Learn common forecast approaches for the non-interest income and expenses such as fees, and compensation
  • Identify the most appropriate “plugs” in a bank model to ensure the model balances, and address circular reference issues in the model

Section Two: Building a bank valuation model

  • Using the results derived from the forecast model, build a residual (excess returns) income model
  • Build an adjusted dividend discount model using the prevailing beset practices for banks (not the same as non-banks)
  • Analyze how regulatory capital constraints effect valuation
  • Develop assumptions about return on equity (ROE), risk weight assets (RWA), cost of equity, and minimal capital ratio that are internally consistent for a multiple stage model
  • Compare the other valuation approaches such as comps and DCF and identify strengths and limitations of each approach

Bank Modeling Highlights


  1. Real World “On the Job” Investment Banking Training

    The Bank Modeling Self Study Program bridges the gap between academics and the real world to equip industry professionals with the practical financial skill set they need on the job. The program utilizes a case study format, as students follow their tutorial guide alongside the Excel model templates, and are directed to the appropriate external documents (SEC filings, research reports, etc.) in order to build complex O&G Financial & Valuation models the way they would on the job.


  2. Support Center

    Upon enrollment, students gain 24-month free access to Wall Street Prep’s Online Support Center, where they receive answers to questions, free downloads, and important updates.


  3. CFA Institute PD Credits

    Wall Street Prep is registered with CFA Institute as an Approved Provider of professional development programs. This program is eligible for 35 PD credit hours as granted by CFA Institute.


  4. Boost Add-In for Excel

    Free Access to Boost, an all-in-one suite of time-saving tools designed for people who build financial models in Excel. Key features include: Easily assign custom shortcuts to all of Boost’s features; Easily understand long formulas with the powerful ‘Precedents’ and ‘Dependents’ Tool; A fully functioning classic 2003 menu (in ’07 and ’10 Excel); And much more!

Prerequisites

The course is self-paced and anyone is welcome to enroll. It does not assume a prior background in Bank and FIG Modeling. However, those who select this course should possess knowledge in:

  • Accounting: The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement). Students with no prior background in Accounting should enroll in the Accounting Crash Course.
  • Excel: Basic introductory Excel knowledge is highly recommended. Students with limited or no experience using Excel should enroll in the Excel Crash Course.
  • Financial Modeling: Some basic financial modeling experience is presumed in this course.  If you have never built financial models, consider enrolling in the Basic Package or Premium Package.