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INVESTMENT SERVICES
What is the value of this service?

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COMPREHENSIVE A/LM

Interest rate risk analysis and consultation to provide credit union management with improved expertise in managing balance sheet risk and structure

The Comprehensive A/LM Service produces a clear and concise report package that monitors financial performance and measures earnings fluctuations under a broad range of plausible interest-rate scenarios. Southwest Corporate Investment Services utilizes the BancWare® Model, a sophisticated and robust asset/liability management system with the following features:

  • Sophisticated data management/download that provides account-by-account modeling
  • Extensive validation of all data - ensures integrity of data input
  • Ability to define and observe the behavior of any financial instrument
  • Embedded prepayment options captured based on collateral type
  • Non-term share valuation utilizing regression analysis
  • Calculation of an option adjusted spread (OAS)
  • Lattice-based valuation using the Hull and White term structure model

Comprehensive A/LM Analysis includes:

  • Quarterly assessment of future earnings, capital adequacy, and interest-rate risk exposure
  • Measurement of the credit union's interest-rate risk including: income simulation, net economic value analysis (NEV), and gap analysis
  • Income simulation over a two year horizon and NEV analyses, both run under seven interest-rate shock scenarios
  • Reports ready for presentation to the credit union's ALCO or Board of Directors
  • Presentation by SCIS A/LM specialist of the first analysis to verify all assumptions and to ensure results are understood
  • "What-if" analyses performed to confirm business plans and/or test the impact of new products

A/LM Consulting includes:

  • Personal attention and hands-on guidance from experienced A/LM specialists
  • Quarterly risk assessment, including interest-rate risk measurement, in-depth performance analysis and commentary
  • Assistance with the development of A/LM policies
  • A/LM education and consulting

    To determine which service is right for your credit union, email Investment Services at contactis@swcorp.org or call 800.301.6196.

 
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Southwest Corporate Investment Services is a wholly owned subsidiary of Southwest Corporate Federal Credit Union
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