c. myblog

July 6, 2016

NCUA – Rethinking NEV

It’s no secret that the NCUA is planning to implement new guidance for net economic value (NEV) testing this year. From NCUA’s recent open meeting, some key elements of the new guidance include: Non-maturity deposit (NMD) values will be capped at a premium, not to exceed 1% in the current rate environment. NMD benefit will […]

May 19, 2016

CECL’s Threats To Your Business Model: Six Questions To Consider

CECL is a new set of rules that every credit union eventually will have to play by. While it may not be in effect until 2021, many credit unions could find that they need all that time to reposition their business models to prepare for its impact. Keep in mind that the impact being discussed […]

May 12, 2016

5 Things Not To Do With Your Investment Strategy

1. Don’t manage investments in a silo. Investments are an integral component of the business strategy. Investment strategy should be developed in light of a credit union’s unique financial structure and strategic objectives. Understand how the whole financial structure works together. For example, if the lending portfolio includes a significant amount of long-term loans, investments […]

April 29, 2016

Of Bulls and Bears – Margin Impact from Changing Yield Curves

After the blog published on April 21, 2016, we have received a number of comments regarding why we were silent on the industry “conventional wisdom” that a wider yield curve can provide stronger net interest margin, and that a narrower yield curve can squeeze the margin. This can be true, but often is not. All […]

April 21, 2016

Of Bulls and Bears – Twisting the Yield Curve Is More Than Just a Stress Test

If you’re a financial institution, you need to understand how changes in market rates could affect your financial well-being. That’s what A/LM analysis is for. Traditional A/LM analysis has revolved around simple, instantaneous, and parallel shifts in rates. But in reality, rates have rarely shifted in parallel (not to mention instantaneously). As an example, using […]

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