c. myblog

April 4, 2013

Shrinking Margins Yet Higher ROAs? The Sustainability Question…

Unsurprisingly, many credit union leaders continue to watch their net interest margins erode in this continued, low rate environment. In fact, net interest margins have dropped to levels not experienced in over 20 years, dropping below 3% throughout all of 2012 trending down to 2.93% as of December 31, 2012 according to NCUA aggregate data. […]

March 28, 2013

Investment Decisions: Prepayment Assumptions Can Drive the Results

Yield tables provide a wealth of information to evaluate prospective investment purchases.  Take the example below.  The screen shows the coupon and the prices as well as possible prepayment speed, yield and average life depending on the rate environment. Not unlike the IRR process, decision-makers should asses the reasonableness of the assumptions being presented in […]

March 22, 2013

“My investment portfolio is not working for me!”

This is a statement heard more frequently in the past couple of years.  For those thinking it, here are some questions worth considering. Question 1:  Is my lending process working for me? The economy shows glimmers of improvement, with home values up and consistent increases in new auto sales as some evidence.  Before turning to […]

March 14, 2013

Have You Looked in the Mirror Lately?

As members continue to adopt online channels, the online “face” of your credit union may be the only face many of your members see on a regular basis. Is that online/mobile experience on par with the branch or phone experience you strive for? In the rush to keep up with expensive technology advances, credit unions […]

March 7, 2013

Interest Rate Risk Prepayment Assumptions Vs. Observed Behavior

When you or your examiner are evaluating assumptions used in your A/LM model to quantify interest rate risk (IRR), is the objective to prove the assumptions are right?  Or, is it to prove that the assumptions are reasonable and (when possible) supportable?  According to NCUA’s IRR Questionnaire, the answer is you and the examiner “should […]

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