Financial Compass E-Learning Series. How to Make Basel III Adjustments in Compass

Transcription

1 Financial Compass E-Learning Series How to Make Basel III Adjustments in Compass

2 Additional Information: Basel III Changes in Financial Compass Available in Client Area (Learning Center) or Capital Management Webinar Call for access FDIC Presentation (Regulatory details) 2

3 Why Customize Compass? Incorporate detailed Basel III changes Easily reconcile to Call Report line items 3

4 Customization Methods Three ways to customize: 1. Change account property settings 2. Adjust Risk Weights for asset accounts 3. Add adjustment accounts, if needed 4

5 New Folders Chart of Accounts The grey folders and the blue accounts noted on the left are automatically burst out to all plans opened in the latest version of Compass Blue account numbers are automatically calculated by Compass and cannot be edited Ratios are calculated using the grey folder sub-totals 5

6 New Folders Adjustment Accounts EXAMPLES of accounts that can be added to the grey folders to house custom adjustments No accounts must be added 6

7 Ratio Summary 7

8 Why Customize Compass? Incorporate detailed Basel III changes Easily reconcile to Call Report line items 8

9 Customization Methods Three ways to customize: 1. Change account property settings 2. Adjust Risk Weights for asset accounts 3. Add adjustment accounts, if needed 9

10 Capital Class Options Use the Account Wizard to choose the Capital Class for all accounts within the highlighted folders Common Stock 10

11 Review the Account Properties for each account in the Capital folder Verify the Capital classification for each account 11

12 Customization Methods Three ways to customize: 1. Change account property settings 2. Adjust Risk Weights for asset accounts 3. Add adjustment accounts, if needed 12

13 Custom Risk Weighting Options o Use the Account Wizard to choose a Custom RBC Factor; OR o Use the Account Wizard and choose Custom by Month to open the RBC Factor tab. Input RBC Factors that vary by month; OR o Create an Adjustment Account under the Total Risk Weighted Assets grey folder 13

14 Custom Risk Weighting Options o Use the Account Wizard to choose a Custom RBC Factor; OR o Use the Account Wizard and choose Custom by Month to open the RBC Factor tab. Input RBC Factors that vary by month; OR o Create an Adjustment Account under the Total Risk Weighted Assets grey folder 14

15 Custom Risk Weighting Options o Use the Account Wizard to choose a Custom RBC Factor; OR o Use the Account Wizard and choose Custom by Month to open the RBC Factor tab. Input RBC Factors that vary by month; OR o Create an Adjustment Account under the Total Risk Weighted Assets grey folder 15

16 Custom Risk Weighting Options o Use the Account Wizard to choose a Custom RBC Factor; OR o Use the Account Wizard and choose Custom by Month to open the RBC Factor tab. Input RBC Factors that vary by month; OR o Create an Adjustment Account under the Total Risk Weighted Assets grey folder 16

17 Customization Methods Three ways to customize: 1. Change account property settings 2. Adjust Risk Weights for asset accounts 3. Add adjustment accounts, if needed 17

18 Risk Weights for Off-Balance Sheet Items - Create an Adjustment Account under the Total Risk Weighted Assets folder for each category of off-balance sheet exposure - Enter the amount of the risk weight (balance of the category times the Credit Conversion factor) 18

19 Why Customize Compass? Incorporate detailed Basel III changes Easily reconcile to Call Report line items 19

20 Compass & Call Report Comps Call Report Compass 20

21 Total Assets for the Leverage Ratio Part 1 - Continued Prior to 3/31/15, Total Assets for the leverage ratio was on line 27. Common Stock 21

22 Total Risk Weighted Assets Common Stock Note: Prior to 3/31/15, Risk Weighted Assets before deductions was on line

23 Total Tier 1 Capital Part 1 - Continued Common Stock Note: Prior to Tier 1 Capital was on line

24 Common Equity Tier 1 Capital Part 1 - Continued Common Stock Note: Prior to 3/31/15 there was no line item for Common Equity Tier 1 Capital in Part 1.A 24

25 Tier 2 Capital Part 1 - Continued Common Stock Note: Prior to 3/31/15, Tier 2 capital was on line

26 New and Revised Reports in Compass Capital Adequacy Report revised and expanded Capital Ratios Report NEW; can be used as audit trail Income Statement Report revised to include new ratios 26

27 Capital Ratios Part 1.A - Continued

28 In Summary: Two reasons to customize Compass: Align Compass with Basel III rules Reconcile to Call Report line items 28

29 In Summary: Three ways to customize: 1. Change account property settings 2. Adjust Risk Weights for asset accounts 3. Add adjustment accounts, if needed 29

30 THANK YOU IF YOU HAVE QUESTIONS, PLEASE CALL: