What is a Deposit Analysis and How Does It Work?
A deposit analysis studies the behavior of non-maturity deposits over time and provides institution-specific results needed to accurately estimate and manage interest rate and liquidity risk.
A Comprehensive Deposit Analysis from Mark H. Smith, Inc. employs an account level study to provide the highest quality analysis which includes the following:
- Average Lives –The primary function in performing this analysis is to estimate decay for non-maturity deposits.
- Rate Sensitivity Factor and Lag –A historical beta coefficient is estimated for each account type. The historical data also provides an average delay period or lag.
- Surge Deposits –Estimate of deposit increases contrary to longer-term historical balances and growth trends.
- Rate Comparison –Compare rate sensitivity factors and lags to regional, state, and national average rates.
- strong>Summary –A written summary of the results. Phone consultation regarding the results and addressing questions.