What is ALMPro®?
ALMPro® is a quarterly analytical service that includes interest rate risk (IRR) analysis and forecasting. It’s offered exclusively to credit unions nationwide. It provides important asset and liability management and funds management information to credit union chief executive officers, CFOs, directors, and other key financial decision makers. The analysis is compiled each quarter from a database maintained for each client. It provides management with useful financial information including IRR analyses and forecasting in a format which is simple and straight-forward. The ALMPro® Dashboard is included with each report. The dashboard is a concise two-page synopsis of the credit union’s whole ALM-IRR picture and is presented with cross-references so that one can see the big picture on the Dashboard and immediately turn to the supporting information in the body of the report.
Does ALMPro® meet the requirements of the new NCUA IRR Regulation advanced in Letter 12-CU-05?
Yes, the income simulation analysis and NEV analysis are the two most commonly used methods to estimate IRR and are included as acceptable methodologies in the regulation. We will guide you through the process of reviewing the adequacy of your IRR Policy. If you don’t have a policy we can provide a template and help you craft a policy and set IRR risk limits suitable for the size and complexity of your credit union. As advisors, we can suggest solutions but in the end it’s your credit union and you make all of the decisions.
Is support available for ALMPro®?
Yes, client support is an area where we excel. We provide extensive initial training using several methods such as one-on-one report review, online webinars, ALCO training, GoToMeeting Training, board meeting support and more. This training is individually tailored for each client’s unique needs and circumstances. We will train the executive officers, ALCO and Board of Directors until they feel confident using the IRR analysis. We will provide refresher training as needed and repeat the effort when new employees or volunteers come on board. Free, unlimited, and timely telephone support is included at no extra charge. We welcome follow-up calls with questions regarding your reports, not only because we believe in training, but because these questions give us insight as to how you use our service. This helps us in upgrading our service to meet your needs.
We offer an extensive series of webinars at no charge. Lastly, one of our senior analysis will travel to your location and train on sight if you request. On-site training is also included at no additional charge. We do ask to be reimbursed for out of pocket travel expense.
Does the ALMPro® Report include IRR estimates and analysis?
Yes, each quarter we run multiple IRR what-if scenarios to test the credit union’s sensitivity to interest rate risk (IRR). Scenarios are customized to the needs of the individual credit union. The model allows us to forecast future interest rate spreads, net interest income (NII), net income and the net economic value (NEV) value of net worth.
Does ALMPro® provide IRR rate shocks and stress testing?
Yes, we perform stress testing on multiple scenarios at various stress magnitudes simulating interest rate movements up and down. The client determines the level of stress and the nature of the scenarios to be tested. Most commonly we construct a benchmark scenario and then run multiple scenarios and compare them to the bench mark.
Why is the ALMPro® IRR & liquidity risk report important?
The management of every credit union is charged with the responsibility of operating in a safe and sound manner. In today’s complex financial and economic environment, that means making difficult and complex financial decisions including an estimate or quantification of IRR and liquidity risk. We have found that often small and mid-sized credit unions do not have the time to perform the complex financial analyses which need to be done, yet management has the responsibility to make sound financial decisions, and a strong financial analysis is vital in this effort.
Why not just sell the software?
There are many excellent ALM-IRR software packages available. However, our clients have discovered that even the best software requires a significant time commitment in which to learn and effectively use the software. Additionally, the use of software requires financial and analytical expertise that some small and midsized credit unions do not have on staff. We offer an alternative to the increased workload of software by performing the work required and offering timely analyses and information ready to use in the decision-making process.
Do I have to research my historical data?
No, we’ll pull all of the historical information from the Form 5300 Call Reports, which we download from NCUA’s website.
Has ALMPro® been approved by NCUA or the State?
To the best of our knowledge, neither NCUA nor any state officially approves vendors’ services. I can say that we have informally received very positive responses from NCUA examiners and various state examiners. If NCUA or your state regulator raises issues as to the adequacy and appropriateness of your IRR analysis, it would be our responsibility to make any corrections or adjustments to the content of the report at our expense.
Is the ALMPro® service guaranteed?
Yes. We make every effort to satisfy each client. If for any reason you feel our work is not acceptable, please return within 30 days we will redo the work to your satisfaction.
Is there a long-term commitment?
No. All agreements are (new-clients one year then) quarter-to-quarter basis. You can change your service at any time. If you wish to terminate your service, all that is needed is to provide a written notice of cancellation.
Can I talk with some ALMPro® users?
Yes. We have approximately 325 clients nationwide. Please follow the link below to obtain a Client Referral List based upon your credit union’s asset size and location.
Do I have to reformat or map my general ledger?
No. We will take your data in whatever format. Our objective is to make your life easier. We will take the information that you have that is readily available and make it work.
How do you set up the scenarios?
We will work with you to customize the scenarios to fit your particular needs and circumstances. We do not use one-size-fits-all scenarios.
How do you arrive at prepayment speeds?
We will work with you to arrive at estimated prepayment speeds which are suitable for your credit union’s individual circumstances. We will test your loan portfolio turnover, implement industry averages, and take advantage of your insight and experience as a CEO or CFO.
How do you classify non-maturity shares?
We will work with you to arrive at a realistic evaluation and assumptions for your non-maturity shares.