Bond Analytics (PARs)
We are fortunate enough to work with many community banks in several states.
We would like to relay an interesting conversation we had with a banker from late July.
We hear many times throughout any given month that loan competition is really tough and that is why loan offering rates are staying low.
The word of the day is “Liquidity.”
Have you been in this situation before? The examiners recently came in for a review and left you with some recommendation that says that you should set reasonable policy limits on your income simulation results calculated by your interest rate risk model
Fear is a great motivator
Does your model provide you with the most accurate picture of your balance sheet?
Balance sheet management has always been difficult but never more so than in today’s extended low rate environment.
We have added a new report to the Executive Summary of the BancPath report.
The report looks at ratios examiners commonly compare to certain guidelines or benchmarks.
Regulators, at times, can be focused on locating those “red flags” within your financials that can identify an area of concern on your balance sheet.
AMG provides ALM consulting services and reports to community banks in 22 states
The days are getting shorter, the nights are getting cooler, and the leaves are changing color.
Recently, we discussed the growing importance of not only developing institutionally relevant assumptions derived from your bank’s own historical data
Since March 31, 2015, the 10-year Treasury has moved from 1.934 percent to 2.478 percent on June 10, 2015.
Do you have questions about how the new Basel III rules are going to affect your bank? You’re not alone.
Banking regulators seem to be increasingly focused on liquidity
Model assumptions are the most important factor relating to accuracy and meaningful IRR analysis in any Asset/Liability report.
Bankers live by the old 3-6-3 rule. Pay 3 on deposits, charge 6 on loans, and be on the golf course by 3 o'clock
I have heard that tired old joke more times than I can count.
Optimism among bankers is slowly increasing, as a steeper yield curve and gradually thawing loan markets give a glimmer of hope for net interest margins
One of the first arguments against community financial institutions using interest rate swaps (usually made by those offering an alternative product) is that hedge accounting is too complex.
We noted in a post a couple of months ago that swaps use has increased dramatically in smaller banks.
As the regulatory scrutiny of interest rate risk has increased, the criticism of ALM model inputs and assumptions has soared as well.
The committee reiterated that they are likely to begin tapering the asset purchases of QE3 "in coming months," a phrase that sparked a sell off in longer dated Treasuries.
Learning about swaps and how they work in community financial institutions starts with a basic definition.
We designed this tool to solve some of the recurring problems we see in fixed rate loan pricing in community banks.
Is the big move up in rates finally here?
Market Value of Equity (MVE), Economic Value of Equity (EVE), Net Portfolio Value (NPV) are all names for a measurement of the volume and volatility of Capital in various Shock Rate Environments.
We have mentioned this trend briefly in other posts, but since it seems to be becoming ever more prevalent, I thought it deserved its own post.
One of the core asset liability management questions that a community bank must answer is whether they should run a model in house
In our discussions with clients, prospects, and regulators, we get a look at a lot of interest rate risk models
Today the Federal Reserve released the results of the October Senior Loan Officer Opinion Survey
As we have discussed in other posts in this series, the primary way that banks measure short term interest rate risk is via an income simulation:
Federal regulators on Monday plan to unveil a major overhaul of an under-used mortgage-refinance program
This pretty much sums up my experience running ALCO/pricing meetings!
Community financial institutions have two primary methods for measuring interest rate risk
Although the title may be a bit inflammatory, questioning the future of community banking seems to be gaining popularity.
We have had several instances, just in the last few months, where certain field examiners have either verbally criticized or written up clients
Beta calculations can sometimes be confusing, both in terms of how they are actually calculated and what the impact is
When talking to clients, one of the first questions we ask is, "Have you read the FFIEC Advisory on Interest Rate Risk?
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