General Examination

A general examination is a regulatory measure set up to give a detailed examination of all aspects of a bank. The examination is conducted by the governing body of different levels of banks. For example, state banking regulators would provide an overview of all state-run banking institutions. More than 2,000 bank examiners operate in the United States, evaluating the management processes and activities of national banks to ensure that these banks are in compliance with laws and regulations, and that they’re operating in a sound manner.

The general examination is generally conducted every two years. The bank examiners conducting the exam will take an in-depth look at the bank in question, focusing a lot of time on the bank’s financial statements, and interviewing staff and managers on policies and procedures. The examiners will look at the bank’s supervisory guidance, recommendations and issues. They’ll delve into the bank’s overall financial state, and examine its trust operations. They’ll also evaluate the health and efficiency of the bank’s electronic systems, and its performance in terms of meeting the credit needs of the community in which it operates. The examiners will further assess whether or not the bank is in compliance with state and federal regulations.

Information that bank examiners request during the process of a general examination includes:

• The bank’s written policies and procedures
• Income statements
• Balance sheets
• The bank’s most recent board packet
• Minutes of board meetings
• Reports of audits, past-due accounts, problem loans and similar

Reviews associated with a general examination can occur both on and off-site. Examiners may go over written information and reports off-site, but will perform detailed interviews with management and staff off-site. Once the general examination has been completed, the examiners will hold an exit meeting with the bank’s management at which they will present their findings, and give the bank its ratings; the examiners may hold a similar meeting with the bank’s board of directors. Finally, the FDIC will issue a Report of Examination.

At the end of each general examination, the bank examiners will assign ratings to the bank. The composite rating is an overall rating based on the bank’s safety, soundness and regulatory compliance. The component ratings are specific to the bank’s safety and soundness components. Each type of rating is assigned on a scale of one to five, with one being the highest or strongest, and five the lowest or weakest.