Leverage our seasoned team of experts to perform essential balance sheet analysis and alignment, essentially enlarging your pool of objective asset/liability experts and bringing an alternate viewpoint to bear. If your credit union’s executive leadership, asset/liability committee (ALCO), and board would benefit from additional insight and support, our Balance Sheet Analytics Program is one of the most comprehensive and cost-effective services of its kind.

Mindful of shifting economic and market forces, our analysts will scrutinize your credit union’s balance sheet, identify areas of risk, and locate ways to potentially improve risk-adjusted returns. We will observe your credit union’s risk position, use industry-leading tools to analyze it under various market pressures, and align your credit union’s portfolio to not only accommodate these shifts, but also to capitalize on them.

This program bundles our most popular balance sheet services – Share Sensitivity Analysis, Asset/Liability Management (ALM), and Portfolio Benchmarking – offering them together for increased value and reduced pricing. What is most compelling about the program, however, is the sweeping nature of these services. Working in tangent, they provide a clear view of your credit union’s balance sheet, reveal unforeseen risks, and note unrealized opportunities in a highly systematic fashion.

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Program Structure

The Balance Sheet Analytics Program’s primary objective is to measure your credit union’s net risk position and identify potential fluctuations in net income.

Anticipate, Address
Understand your members’ behavior in changing interest rate environments so you can anticipate cash flow patterns with our Share Sensitivity Analysis.  We statistically measure member savings/withdrawal behavior, and your credit union’s dividend rate pricing behavior, and compare them to overall national statistics.  The data can then be further leveraged in the ALM reporting system. 

Align
Ensure that your credit union’s investment portfolio is structured to complement the net risk position of its balance sheet with the Risk Management Portfolio Alignment component of this program.

Manage
We take a disciplined approach to your credit union’s assets and liabilities via our Balance Sheet Management System. Together with your executive leadership team and board, we establish a suitable investment and funding portfolio to which your credit union’s financial officer can adhere.

The Process

Step 1 – Plan

Join us for a comprehensive planning session in which we:

• Reinforce the supporting role we play for your CEO, board, and executive financial officer
• Outline the implementation process
• Introduce the Balance Sheet Solutions professionals responsible for each segment
• Establish an implementation calendar

Step 2 – Execute

Our in-depth program implements the following analytics (in order of completion).

• Investment and ALM Policy Review - at inception
• Share Sensitivity Analysis - annually
• Asset Liability Management - quarterly
• Portfolio Benchmarking - annually
• Portfolio Analytics, including Total Rate of Return Scenario Analysis - monthly

*Our evaluation and maintenance analytics employ a rigorous set of industry leading tools including Derivatives Solutions’ Fixed Income Manager®, Intex®, AD&Co Prepayment Model® and Bloomberg®.

Step 3 – Review and Consultation

Establish a Benchmark Portfolio. We will work closely with your credit union’s ALCO, board and management team to agree on a benchmark portfolio that meets income needs without introducing excess volatility.

Measure Progress. Once each installment of our Balance Sheet Analytics program has been completed, a review with your credit union is undertaken. The initial review will be done with your credit union’s executive financial officer, but it can be expanded to include your credit union’s ALCO and board.

Education and Training. Guidance sessions are provided to your credit union’s staff, management committee, and board (as prescribed by Balance Sheet Solutions).

Additional Services. This program was designed as a comprehensive stand-alone solution, however, analytics and reporting can be purchased separately. Other services, Parallel Modeling for example, can also be added. Please inquire.

Advantages

• Supportive Resources. The Balance Sheet Analytics Program can be an essential resource for your credit union’s executive financial team, supporting the role of the following individuals.
  • Your CEO – The objective nature of our Balance Sheet Analytics assists your CEO in maintaining a proper segregation of duties and can promote the CEO’s responsibility to advance profitability.
  • Your Board Members – Establishing performance objectives helps your board carry out its fiduciary responsibilities.
  • Your Financial Officer – Access to sophisticated balance sheet analysis and planning strengthens the role of your financial officer by extending this individual’s inventory of leading-edge tools.
• Expertise. Our team includes experienced asset/liability analysts and investment advisory representatives who bring their combined decades of experience in the financial industry to the credit unions they serve. These individuals populate the models, develop the analysis, and guide you in understanding the reports. View their biographies online.
• State-of-the-Art. Our use of industry-leading analytic tools to assess risk, introduce change, and measure value, offering a best practices approach to balance sheet management.
• Flexibility. Our Balance Sheet Analytics can accommodate the size and complexity of any balance sheet. Our range of clients include small- to mid-size credit unions using our services to supplement their system, to credit unions with assets in the billions, seeking objective analytics for comparison purposes.

Getting Started

To learn more about this program, contact an Investment Advisory Representative at Balance Sheet Solutions at 888-796-6389.