Bank & Financial Institution Modeling: Program Outline

This is the condensed version of this outline. Click Here for the full version.

How to Master Bank and Financial Institution Valuation and Financial Modeling, Dominate Your Investment Banking Interviews, and Succeed On The Job.

The topics in Bank & Financial Institution Modeling teach you everything you need to know about accounting, regulatory capital, operating models, valuation, and merger models and LBO models for banks, insurance firms, and other companies that make money… with money.

  • In total, there are 91 lessons with accompanying Excel files as well as 5 quick reference guide PDFs on key topics. That amounts to over 40 hours of video altogether – but you also get full transcripts (over 300,000 words total), so you can quickly skip to anything you need to review.
  • All the content is downloadable to your preferred device (works with all media players and on common devices, including desktops, laptops, tablets, and smartphones).
  • Easily keep track of your progress: As you move through the lessons, you can check off what you’ve completed and what’s still on your “to-do” list.
  • Fast answers to all your questions: Our expert support team is standing by to answer any questions you have about any of the content, 365 days a year.
  • Quizzes and Certifications. After you have completed the course, you will be eligible to take our challenging Certification Quiz. Once you pass the Quiz, you’ll be issued a Certificate that you can add to your resume / CV and refer to in interviews.
  • Included Lifetime Access: You also get lifetime access, so you can come back to the course whenever you need it – whether that’s in 1 month, 1 year, or 10 years.

What Others Are Saying About Our Modeling Courses...

"I interned at a BB bank this past summer in the Financial Institutions Group and the material that I have learned in the Bank & Financial Institution Modeling course is incredible. Not only do I recommend this course for FIG- focused interviews but also I recommend this course for incoming FIG analysts. If you want to be ranked as the top analyst, you need the modeling skills that even internship cannot offer."

Module 1: Overview, Bank Accounting & Regulatory Capital
  • In this module, you’ll learn why and how banks operate differently from normal companies, and why you can’t rely on traditional metrics or modeling when analyzing them.
  • We’ll compare the financial statements of a bank to a normal company, and you’ll learn how the balance sheet drives everything for a bank; then you’ll learn about the provision for credit losses and loan loss reserves, which are critical to a bank’s finances.
  • We conclude the module with an overview of regulatory capital, risk-weighted assets, and key metrics like Tier 1 Capital, Total Capital, and the Leverage Ratio.
Module 2: Bank Operating Model
  • In this module, you’ll construct a detailed operating model for JP Morgan, starting with its loan portfolio and loan loss reserves and moving onto its balance sheet, interest-earning assets and interest-bearing liabilities, and then its income statement and cash flow statement.
  • Everything is linked to JPM’s real SEC filings and equity research from RBC and Morgan Stanley so that these projections are grounded in the real world.
  • You’ll also learn about advanced topics like the circular calculation of stock repurchases and dividends based on regulatory capital requirements that other training programs do not cover at all.
  • At the end, we’ll create a summary page that presents the key operating metrics for a bank and directly ties into the valuation in the next module.
Module 3: Bank Valuation
  • In this module, you will create a full-fledged valuation model for JP Morgan based on public company comparables, precedent transactions, and dividend discount and residual income models.
  • We’ll begin with an overview of how relative and intrinsic valuation is different for banks, and then learn how to select comps and transactions and which metrics and multiples to use for banks.
  • Next, we’ll go into the dividend discount model and you’ll learn different approaches for calculating the present value of equity, including a complex model based on JP Morgan’s real data and a simplified one you can use in interviews.
  • Finally, we’ll conclude with a residual income (excess returns) model and you’ll learn the intuition behind the model as well as how to build a complex model for JP Morgan and a simplified version you can use for interviews.
Module 4: Bank Merger Model
  • You’ll create a detailed merger model for two commercial banks in this lesson as we look at JP Morgan’s hypothetical acquisition of SunTrust Banks – a regional bank based in the Southeastern part of the US.
  • We’ll begin by creating an operating model for SunTrust and then jump into the key assumptions and setup for a bank merger model – and you’ll learn how it is fundamentally different from a merger model for two normal companies.
  • You’ll then learn how to factor in bank-specific acquisition effects, such as the creation of core deposit intangibles and deposit divestitures, and also how to account for the impact of cost synergies and restructuring on the combined company’s financial statements.
  • Next, we’ll allocate the purchase price and make pro-forma adjustments to the combined company’s balance sheet, federal funds requirements, and regulatory capital and you’ll learn how to adjust dividends to meet the target capital requirements as well as how to create a combined income statement.
  • Finally, we’ll conclude by providing commentary on the JP Morgan / SunTrust deal via a relative contribution analysis, an internal rate of return (IRR) calculation, sensitivity tables, and a transaction summary page.
Module 5: Bank LBO Model
  • You will learn how to create a “bank LBO model” – really just a buyout model – in this module, and why the traditional LBO framework does not apply to commercial banks.
  • Once we explain an alternative approach to private equity buyouts of depository institutions, we’ll go through the key assumptions and model drivers when contemplating the acquisition of a fictional bank.
  • Then, you’ll learn how to allocate the purchase price, create a Sources & Uses schedule, adjust the balance sheet and regulatory capital, and project the income statement in a bank buyout.
  • We’ll conclude by calculating the internal rate of return (IRR) and creating sensitivity tables so that you can see how key variables such as the Return on Equity improvement, purchase price, and exit multiple expansion impact the feasibility of the deal.
Module 6: Insurance Overview
  • You’ll get a crash-course in all things insurance in this set of lessons. We begin by explaining the business model of insurance companies and then walk through accounting, the financial statements, and valuation.
  • We start off by showing you how premiums work, from Gross Written Premiums down to Ceded and Assumed Premiums and Net Written Premiums and Net Earned Premiums. On the expense side, we then walk you through key concepts such as the Loss & LAE Ratio, the Loss Reserve, and Deferred Acquisition Costs.
  • After that, we’ll delve into the financial statements of 2 real insurance companies – MetLife (Life) and Travelers Companies (P&C) – and you’ll learn how to construct a 3-statement operating model for a brand-new insurance company.
  • Finally, you’ll learn about valuation for both P&C and Life Insurance companies and you’ll see how to apply comps, valuation multiples, and intrinsic valuation. We’ll also cover how methodologies such as the dividend discount model work differently, and how to use insurance- specific methodologies such as Embedded Value.

Our Promise To You...

  • Get Immediate Access. The instant you sign up, you'll have immediate access to 91 lessons, 40 hours of video and 5 PDF Quick Start Guides.
  • Unlimited, 365-Day Per Year Support. We have a team of experienced bankers standing by to respond to your questions, comments, and emails 365 days per year, for as long as you need.
  • Money-Back Guarantee. Breaking Into Wall Street is the first and only financial modeling training program that comes with an unconditional 12-Month Money-Back Guarantee.
  • Course Certifications. After completing the course material, you’re eligible to take our Certification Quiz. Once you pass the quiz, you’ll be issued a Certificate that you can add to your resume / CV and refer to in interviews.

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