c. myblog

April 19, 2017

HELOC Considerations in a Rising Rate Environment

With the recent increase in short-term interest rates, specifically Prime rate, many credit unions are taking a closer look at the impact of higher rates on their HELOC portfolios. Anything is possible when it comes to future market interest rates but a continued increase in Prime means members will have higher interest rates and higher […]

March 23, 2017

Interest Rates Have Risen – Now What?

The 3-month Treasury rate has moved more in the last 8 months than it has in the preceding 8 years.  For many who think of A/LM in a time of rising rates, it can be time to calibrate pricing strategies, non-maturity deposit withdrawal assumptions, or loan prepayment speed assumptions.  Others may begin to consider strategic […]

March 15, 2017

Investment Strategy: Consider Income Volatility vs. Yield

Increase in loan-to-asset ratios along with the potential for higher market interest rates and tighter liquidity heighten the importance of the investment strategy and its role in supporting a credit union’s overall business strategy. Understanding income volatility versus yield can be valuable in establishing investment strategy. Below we are illustrating the point using two investment […]

March 9, 2017

Interest Rate Risk Policy Limits: One Big Misconception

We initially published the blog below on January 28, 2016.  With interest rates having increased recently – and more increases seemingly on the horizon – we thought this a good topic to revisit as it has been coming up in model validations we complete. We often see interest rate risk policy limits that rely too […]

February 23, 2017

Don’t Just Focus On Interest Rate Risk – Yield Matters

While interest rates have been fluctuating over the last few months, some feel rates will consistently begin to move up based on indications from the Fed. But what if they don’t? As you discuss your earnings and interest rate risk, it is important to not just look at the risk. Credit unions should pull it […]

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