September 1, 2024—In addition to the other supervisory priorities of Bank Secrecy Act Compliance, Information Security, and Consumer Financial Protection, the NCUA has indicated balance sheet risks of credit, liquidity, and interest rate will receive additional focus this year. A strong Asset Liability Management (ALM) program will accurately measure and monitor interest rate risk. The NCUA expects to see adequate, unbiased assessments of assumptions and scenarios as well as projected risk position analysis. The expectation is that a credit union proactively manages its interest rate risk and the related risks to capital, asset quality, earnings and liquidity.
At EasCorp, we built our ALM solutions around this very principle: intelligent business decisions depend on reliable information and knowledgeable decision makers. EasCorp’s ALM Modeling Service brings together sophisticated analytical tools and multiple data sources in order to perform complex calculations. We align the model to your credit union’s size and complexity; adjusting tests, analyses, and narratives as your institution grows and changes. And, we collaborate with you to develop key modeling assumptions. We then test these assumptions regularly through core deposit analyses and routine assumption sensitivity testing. EasCorp provides in-depth reports and executive summaries, identifying areas of strong and weak performance that can be addressed and fixed promptly.
If you already have an ALM provider but need an outside independent view of your modeling program, please consider our ALM Model Validation service. We offer two types of validation reports. We can run a full validation model calculation with your member data to compare results, or we can test the integrity of your ALM Modeling results for accuracy and reasonability given your model assumptions.