PIP STATUS REPORT
MEMORANDUM TO:
Employee
Title
FROM:
Supervisor
Title
SUBJECT:
Performance Improvement Plan (PIP) Status Report
This memorandum is to review your progress under the Performance Improvement Plan
dated_________. During the past 30 days, we have held meetings to discuss your
progress under the PIP on __________.
From _________ through __________, you were assigned liquidity, earnings, and
sensitivity to market risk (SMR) responsibilities at the Bank of Mingo. You were
specifically tasked with analyzing and providing written report comments and
Examination Documentation (ED) modules for each of the three core areas. This was
your first experience performing the earnings function and the second experience with
liquidity and SMR since being placed on the PIP. I provided one-on-one training for
liquidity and SMR, and coach ________ provided one-on-one training for the earnings
core area.
Technical and Analytical Skills
Unsatisfactory technical and analytical skills were demonstrated in your written report
comments and workpapers. Upon review of your SMR and liquidity workpaper folders,
it quickly became evident that the internal reports used in your analyses were inaccurate.
In fact, it is apparent that you did not conduct any verification of the internal reports
before completing your first draft written comments. Significant report inaccuracies were
identified in the dollar volume of rate sensitive assets reported on the internal GAP
analysis, and in the investment portion of the internal liquidity calculation. How can you
assess how management identifies, measures, monitors, and controls these risks if no
such verification takes place?
Work products produced for the earnings analysis indicate a significant lack of
understanding of even the most basic technical and analytical skills required of a bank
examiner. Your earnings analysis lacked any discussion of 1998 performance, although
the bank made significant provision expenses that reduced ROA to a weak .61 percent at
December 31, ____. Your comments also indicated that “high loan yields are generating
increased interest income….” However, net interest income has been declining every
year for the past two years. Your earnings comments provide an incomplete reason for a
moderate overhead ratio, stating the level was “from maintaining three branch facilities.”
It is very unclear from your statement as to what impact these branches, positive or
negative, have had on the bank’s noninterest expenses.
In conjunction with the earnings analysis, you were asked to complete the ROA and NIM
calculations for June 30, ____, as UBPR information was not yet available. A review of
your worksheet indicates material calculation errors. Errors included the use of an
incorrect formula, incompatible dollar amounts, failure to estimate tax equivalent
benefits, failure to annualize income data, and use of incorrect average asset and average
earning asset amounts. These errors occurred even though detailed instructions on how
to calculate these ratios are readily available in the User's Guide for the Uniform Bank
Performance Report (available on the examiner reference CD). It is also important to
note that you asked for no help from your coach before submitting your calculations.
Written Communication Skills
Written report and ED comments continue to contain numerous grammatical and spelling
errors, unclear or incomplete sentences, and technical inaccuracies. Copies of your draft
comments are attached. Noted below are several specific examples of written
communication skills that do not meet expectations for an Associate with your tenure and
level of recent written communications training.
In your first draft of the SMR comment you state “A review of the Board minutes
indicates that the ALCO have fail to document and report for the April and June in the
Board minutes regarding Interest Rate Risk.” This sentence is unclear and grammatically
incorrect.
On question C.5 of the earnings core ED decision factors, you state, “Although the bank
continues to epxerience asset quality promblems and this will hamper earnings into the
forseeable future.” This is not only a grammatically incorrect sentence, but there are also
three misspellings.
Based on the performance detailed in the above comments, you have not met the
requirements for these three core areas.
Attachments
___________________________
Employee
___________
Date