5 minute read – As rates have increased materially, and liquidity pressure continues to build, leaders are faced with hard and timely decisions. We feel reposting our blog on decay rates will help decision-makers keep critical ALM modeling issues top of mind. The weight of important decisions is always present – don’t lose sight of … Continued
7 minute read – As rates have increased materially, and liquidity pressure continues to build, leaders will continue to be faced with high-impact decisions that can have longer term consequences. Reliable and timely financial decision-information is a huge component of a successful decision-making process. This blog on Static Balance Sheet Analysis (sometimes referred to as … Continued
6 minute read – The NCUA recently released an update to its Interest Rate Risk Supervisory Framework that specifically addresses the NEV Supervisory Test. In short, while the update provides some relief for credit unions, it also increases the amount of judgement in the exam process. This will require credit unions to make sure they … Continued
3 minute read – With inflationary pressure and rapidly changing interest rates creating a lot of earnings uncertainty, leadership teams are laser-focused on increasing revenue streams to help support the bottom line. As important revenue opportunities are explored, frequently refreshing and assessing where to potentially take more risk will be key. A helpful exercise is … Continued
7 minute read –“Wait…What? My balance sheet structure really hasn’t changed in the last few months, yet the NCUA NEV Supervisory Test now shows that we went from low/moderate risk to high risk, teetering on extreme. Why is there such a dramatic shift in results?” This is an example of recent conversations with credit union … Continued
3 minute read – With the Federal Reserve using monetary policy and increasing rates to combat inflation, there will be different winners and losers. Every financial institution has a unique exposure to rising interest rates. Some financial structures will experience an increase in earnings from higher fed funds and prime rates while others could see … Continued
4 minute read – As many leadership teams are in the process of building their 2022 budget, a common theme is emerging and that is an expectation for lower earnings next year. With the potential for less profit, no stone is being left unturned for important revenue generating opportunities. One way to increase Return on … Continued
4 minute read – Every day, leadership teams are evaluating what to do with all their liquidity. Discussions often include setting aside dollars for investment purchases, holding more mortgages, and being positioned to meet pent up consumer loan demand. But before plans are put into motion, help paint a picture for your team by using … Continued
6 minute read – Has your team had a chance to take a close look at your ALM modeling recently? COVID has certainly created a lot of distractions, so it may not have been at the top of your ALCO’s priority list. However, this low-rate environment has created some unique pressures on EVE/NEV and NII … Continued
4 minute read – A few months ago, we posted an investment strategy blog, touching on the importance of understanding risk versus return trade-offs when evaluating high-premium investments. As investments carrying a premium continue to be evaluated, we thought it would be worthwhile to circle back, considering purchase premiums are not exclusive to the investments. … Continued
