New York Bankers Association Trust & Investment Conference OCC Asset Management Compliance Perspectives on Unique or Hard to Value Assets New York Bankers Association Trust & Investment Conference Cooperstown, New York September 22, 2016

Disclosure The views and opinions expressed in this presentation are my own, and do not necessarily represent those of the Office of the Comptroller of the Currency, Large Bank or Midsize/Community Bank Supervision, or of the Chief National Bank Examiner. I will periodically refer to national bank and federal savings association regulations and guidance. Although I generally reference Regulation 9 citations, Regulations 9 and 150 apply to national banks and federal savings associations, respectively. These regulations are in most respects identical.

OCC’s Structure and Industry Data OCC Supervision OCC’s Structure and Industry Data

OCC – National Bank and Federal Savings Association AM Supervision Asset Management Statistics OCC – National Bank and Federal Savings Association AM Supervision OCC regulates 1,032 national banks & 395 Federal savings associations. They range from large complex banks with global footprints to local community banks. Includes 56 limited purpose national trust banks and 18 trust only thrifts. Approximately 41% of all national banks and 25% of federal savings associations have Asset Management (AM) activities, which include fiduciary and custody services as well as retail brokerage services. Source: Call Report 6/30/2016

OCC Asset Management Over 150 examiners with specialized Asset Management expertise perform ongoing supervision both on and off bank premises for Large Banks, Midsize/Community Banks and National Trust Banks. AM Policy Group in D.C. works extensively with examiners on policy guidance for the industry, internal training, and addressing specific bank issues, including potential violations and MRAs. AM Policy also works closely with OCC Legal, National Risk Committee and other internal and external groups on matters including Dodd Frank (Volcker Rule); FSOC issues (including identification of systemically important AM activities and risks); and interpretations of Regs 9 and 12.

Asset Management Statistics National Banks & FSAs Combined Fiduciary and Custody Assets are over $43 trillion. Source: Call Report 6/30/2016

Asset Management: Unique and Hard to Value Assets

Common Unique & Hard to Value Assets Overview Common Unique & Hard to Value Assets Real Estate Business Entities Life Insurance Natural Resources – Oil & Gas Loans & Notes / Intellectual Property Other

Unique Asset Administration Overview Unique Asset Administration Accommodation vs. Product Risk Tolerance Expertise to administer Systems to administer 3rd party service providers

Real Estate Unique Assets Evidence of ownership Maintenance and Condition Productive Inspections Taxes & Insurance (liquidity) Environmental issues Valuations

Life Insurance Unique Assets Administration Review and Assessment Responsibility

Unique Assets Business Entities Closely-Held Business Corporations General Partnership/ Limited Partnership / Family Limited Partnership Sole Proprietorships LLC’s

Business Entities / Closely-Held Business Unique Assets Business Entities / Closely-Held Business Financial statements Proxies Valuation Management Competence Ability Succession planning Dividends Board fees Environmental protection

Oil and Gas Properties Unique Assets Title transfer Environmental issues Valuation Principle and income accounting Royalty Working interest Depletion allowance

Notes & Loans / Intellectual Property Unique Assets Notes & Loans / Intellectual Property Documentation Structure Responsibilities Valuation Collateral

Other Unique Assets Unique Assets Collectibles Jewelry “Perishable” Assets

Initial-Post Acceptance Unique Assets Reviews Expectations for all managed assets but the first review also applies to non-managed unique assets… Pre-acceptance Initial-Post Acceptance Annual Reviews

OCC Contact Information Joel Miller Director, Asset Management Market Risk Division Joel.Miller@occ.treas.gov 202.649.6417 William Pagliarulo, NBE Asset Management William.Pagliarulo@occ.treas.gov 202.649.7825