ALM Solutions

“Corporate Central and FIMAC’s ALM Solutions provided us with an excellent cost/benefit analysis. It provided sufficient detail to model our different scenarios, while not burdening us with a solution that was too complex and too costly.” -- $115M Credit Union
 

“We were pleased to find a bond accounting solution that was partnered with Corporate Central.  The conversion from our previous bond accounting provider to FIMAC was simple and well-organized, with training based upon the needs of our credit union.” -- $1.2B Credit Union    

“We were very happy with the service and are working on going over the ALM Validation results. The validation has satisfied all examiner requirements.” -- $40M Credit Union 

 

Our Solution

In today’s changing interest rate environment and volatile economy, proactive balance sheet risk management is more important than ever. Analyzing the impact of interest rate risk on your credit union’s balance sheet through the use of income simulation and net present value of equity analysis is just one step of an effective asset liability management (ALM) process. Your balance sheet and its complexity will normally dictate the level of involvement and assessment that is needed to fully understand and measure the inherent balance sheet risk.

With increasing earnings pressures and mounting regulatory changes, a properly managed and executed ALM process is becoming a more daunting and time consuming task. To assist our members with this task, Corporate Central partnered with FIMAC, an experienced developer of risk management and profitability software for credit unions, to offer ALM Solutions. FIMAC’s full array of interest rate risk consulting services provide credit unions with access to a centralized source of expertise to enhance your overall ALM process.

Whether you prefer a one-time ALM model validation or ongoing advisory services, Corporate Central and FIMAC can tailor a level of assistance to meet your needs and objectives. Here are just a few options available through Corporate Central and FIMAC’s ALM Solutions:

ALM Risk Analytics

The Risk Analytics ALM Model provides credit unions with an understanding of how changes in interest rates - and the resulting changes to the cash flows of their balance sheet instruments - affect future earnings as well as the value of their capital. This model has several important features providing an accurate modeling experience for today’s ALM Manager. The tools provide:

  • User-controlled processes, including modeling assumptions and rate stress tests
  • Independent securities pricing and cash flow analytics from nationally recognized third-party sources to accurately forecast earnings and price volatility under all your rate stress scenarios automatically embedding those cash flows in the model so you don’t have to
  • Easy installation and setup with a relationship manager to help you through the process
  • Graphical displays of key information; choose from many charts and graphs

A/L Reporter - A robust ALM solution for CUs < $40M

A/L Reporter adapts the core technology of the sophisticated Risk Analytics model to a product that is designed and priced specifically for small credit unions. Through a service-bureau approach, the software provides dynamic income simulation projections for net interest income as well as NEV under nine different rate stress scenarios. Reports are compiled from the 5300 Report and AIRES data with limited additional information from the credit union. A/L Reporter clearly demonstrates to credit union managers how changes in interest rates and the resulting changes in the cash flows of their balance sheet instruments affect future earnings and the value of their capital.

A/L Reporter provides the sophistication of the most expensive models at a much lower cost and with less time and effort. The tools provide:

  • Dynamic income simulation and NEV model that provides results under nine rate stress tests and up to 400 basis points
  • Graphical displays of key information, choose from many charts and graphs
  • Easy installation and setup

The reports include:

  • Executive Summary - designed for board members and ALCO
  • Full disclosure of all modeling assumptions - for management, regulators, and auditors
  • Back Testing Report - to assess the model's accuracy over time and interest rate changes

Budget Models

Our Budget models provide an easy and effective way to build, test, and implement your institution's budget. The model provides incredible functionality while remaining extremely user-friendly. This Cloud-based platform allows you to enter or retrieve your data anywhere you have access to the world wide web. Everything is user-defined, so you can use only what you want. Drag and drop functionality drastically reduces any learning curve problems, allowing unit managers the ability to create their own budget without the institution spending time and resources to train each manager. Of course, there are multiple user access levels if you need the extra layers of security. We don't believe there is a budget tool as powerful as this that is so quickly and easily implemented.

Bond Accounting

Fixed Income Accounting (FIA) provides your institution with an easy-to-use platform for accounting and reporting related to your bond portfolio. FIA generates monthly reporting utilizing the most current, independent bond pricing and cash flow information. This data comes from nationally recognized providers, commonly accepted as the providers of the default “Market” pricing. Results are provided in multiple report sets geared towards Accountants, Management, Board, Regulators, or Portfolio Managers. It will integrate with any ALM Model through the custom report functionality.

ALM Validation Services

Given the current regulatory and management emphasis on the overall risk management process, ALM validation services are critically important and particular interest to those without internal audit departments or those internal audit departments unfamiliar with the requirements of ALM/IRR modeling. Our ALM Validation Services consider the model utilized, balance sheet complexity, data process integration, workflow, checks and balances, policies, ALCO and other areas. The service also provides evidence that the ALM model has been reviewed for reasonableness in conjunction with your credit union’s risk profile. The work is conducted be experienced professionals with excellent industry credentials.

Credit Stress Analytics

Credit Stress Analytics (CSA) brings incredibly robust stress testing together with an ease of use not often seen in today’s software. CSA caters to your specific needs by allowing users to select the appropriate modules for their loan portfolio; Commercial Real Estate, Commercial and Industrial, or Construction and Development. If your focus is on only one area today, you can always scale up into the other modules later if you choose.

The Credit Stress Analytics model allows you to stress test one loan at a time, a sector of loans or your entire portfolio. The concentration analysis features allow you to sort or filter your portfolio by virtually any field input or calculated in the model. Key features of our Credit Stress Analytics:

•             Gauges vulnerability to default and loss with user defined stress ratings codes

•             Fosters early problem loan identification by allowing you to run the model at any time

•             Assists in strategic decision making with loan level analysis of the effects of stress inputs

•             Strengthens decisions about key loans

 

Please contact your Relationship Development Officer or visit fimacsolutions.com to learn more about ALM Solutions.

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    6262 South Lowell Place, Muskego, WI 53150
    (800) 242-4747
    (414) 427-3700