c. myblog

January 30, 2014

A/LM MODELING: NEV and NII Assumptions: Things to Consider

Market interest rates have been sitting at or near record low levels for almost five years. As a result, credit unions are booking assets at very low rates and, in many cases, lengthening their balance sheet to slow the decline in yield. From a business perspective, it makes sense for credit unions to be especially […]

January 16, 2014

Net Economic Value: What is a Reasonable Value for Non-Maturity Deposits?

When approaching net economic value (NEV) analyses, the issue of valuing non-maturity deposits has been a point of contention for practitioners and regulators alike.  The focus traditionally is on the question:  What is the final maturity of a deposit that contractually never matures?  In the end, the nature of the question of maturities needs to […]

August 15, 2013

Borrowing Rates Are Up – Other Impacts to NEV

Continuing with our message from last week, if you are running NEV, there are some other changes you will notice as a result of borrowing rates increasing. As pointed out last week, NEV calculations for the current rate environment will result in shares showing increased value as “market rates” (generally represented by borrowing rates) have […]

August 9, 2013

Borrowing Rates Are Up– Now My Credit Union Has Less Risk?

Net economic value (NEV) is often cited as one way to quantify the interest rate risk exposure of a financial institution. While there are many concerns with relying upon NEV to provide good decision information, this discussion focuses on recent changes in interest rates and the resulting impact to the NEV of credit union shares. […]

May 3, 2013

NCUA’s Interest Rate Risk Questionnaire – Starting the Conversation

More institutions are being presented with NCUA’s Interest Rate Risk Questionnaire in advance of examinations and being asked to fill them out. During the preparation for an examination, this may seem like the last thing a busy management team should be concerned with, but it should be taken as an opportunity to refresh credit union […]

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