Bank & Financial Institution Modeling teaches you how to model and value banks and insurance companies and how they’re different from normal companies.

You’ll start with a crash-course on accounting, credit losses, and regulatory capital for banks, and then you’ll create a detailed operating model for JP Morgan based on its loan portfolio. Then we’ll move into a full valuation and the dividend discount and residual income models.

Next, you’ll create a bank merger model for JP Morgan’s hypothetical acquisition of SunTrust Banks, and you’ll learn about bank-specific items such as core deposit intangibles and deposit divestitures; we conclude with a bank buyout model where you’ll learn how to modify the traditional LBO framework for commercial banks.

On the insurance side, we’ll cover accounting and valuation, build a 3-statement operating model for a brand-new insurance company, and then go through several examples of valuation for both P&C and Life Insurance companies, including concepts such as embedded value and the dividend discount model.

Here’s the full run-down:

• Prerequisites: Excel & Financial Modeling Fundamentals or equivalent (this is an advanced course).
• Lessons cover accounting and regulatory capital for banks, 3-statement projections, valuation (public comps, precedent transactions, dividend discount model and residual income model), merger models, buyout models, and insurance accounting and valuation (comps, multiples, NAV, dividend discount model, embedded value).
• 71 videos total (26 hours of footage).
• 5 quick reference guide PDFs on key topics – from accounting through valuation.
• Bank Overview lessons cover a bank’s financial statements, interest-earning assets and interest-bearing liabilities, how to calculate the provision for credit losses and allowance for loan losses, and how to determine risk-weighted assets and key metrics such as the Tier 1 Capital Ratio.
• Operating Model lessons teach you how to project JP Morgan’s loan portfolio and credit losses, and how you use those to drive its balance sheet, IEA and IBL, and income statement and cash flow statement; advanced topics such as the circular calculation for dividends and share repurchases are also covered.
• Valuation course covers public comps and precedent transactions for a bank, the key metrics and multiples to use, and both simplified and complex versions of the dividend discount model and residual income (excess returns) model.
• Merger Model course covers core deposit intangibles, deposit divestitures, and how to set up transaction assumptions differently; you’ll also learn how to take into account cost synergies, restructuring, changes to federal funds and regulatory capital, and how to analyze the IRR of a bank M&A deal.
• LBO Model course shows you why the traditional LBO model doesn’t work for banks, how to set up an alternative model properly, and how key variables such as the ROE improvement and P / BV multiple expansion impact the IRR.
• Insurance Overview lessons show you how insurance-specific accounting works, how to link and project the 3 statements, how P&C and Life Insurance differ, and how to value both types of companies, from comps and multiples to intrinsic valuation (dividend discount model, NAV, and embedded value).
• You receive instant access when you sign up because everything is delivered online – no shipping charges or physical products to worry about.
• Free lifetime updates and support.
• Sample Operating Model Video – Dividends Issued & Shares Repurchased.
• Sample Valuation Video – DDM: Calculating Dividends Issued & Present Value.
• Sample Merger Model Video – Deposit Divestitures.
• Sample Insurance Video – Premiums and Commissions (Operating Model, Part 1).
• Full Course Outline & Offer.