If you prefer, many of our services are also available a lá carte. From reviews of your asset liability management process to total return investment management, our team of experts can help save time and expense while delivering extremely useful financial information and insight.
ALM Validation
ALM First will perform an unbiased, onsite review of your financial institution’s entire asset liability management process, including your methodology and assumptions, prepayment and re-pricing procedures, rate indices, and reporting formats. We’ll look for possible improvements in the reports prepared for senior management and board members. We’ll also conduct a full array of ALM reports, including a gap analysis, net interest income (NII) simulation, and a net economic value (NEV) analysis. Then, we’ll write a comparative review of your ALM reports versus those performed at ALM First. At your request, we’ll present our findings to your board of directors or other parties.
Balance Sheet Risk Assessment
This service offers a third-party review and analysis of your financial institution’s balance sheet and investment portfolio. We’ll use technologically advanced analytical models to perform a complete asset liability management assessment, including a gap analysis, net interest income (NII) simulation, and net economic value (NEV) analysis. The service also includes an investment analytical summary that complies with all regulatory requirements. At your request, we’ll present our findings to your board of directors or other designated parties.
Total Return Asset Management
This service involves discretionary asset management by ALM First with respect to all or part of your financial institution’s portfolio. Your senior executives establish the parameters by which the portfolio will be managed. Total return asset management includes investment policy review, investment execution and management, investment product education, and portfolio monitoring and reporting.
Loan Profitability Analysis
ALM First's Loan Analysis shows the profitability of your loan portfolio by analyzing each loan in detail then summarizing the results according to parameters that you define, such as loan type, credit tier, region, etc. Each loan is modeled individually, accounting for all cash in and cash out and the timing of those cash flows over the life of the loan. The service provides a better measure of profitability than current yield, and it gives you the detailed information needed to set loan pricing parameters and to decide how resources should be allocated among various loan programs.
Mortgage Servicing Rights Valuations
ALM First offers services for valuing and accounting for mortgage servicing rights. We generate a valuation at the individual loan level and present the results by risk tranche. The valuation can be as detailed as you desire with components including ancillary income, servicing costs, delinquency history, payment amounts, and other data by loan. In addition, we can track book value by risk tranche over time and account for impairment.
Liquidity Forecast Model
The ALM First developed liquidity forecast model uses the results from the client’s latest ALM modeling as a starting point and incorporates the client’s input for growth projections for the next 12 to 24 months. One of the distinguishing characteristics of the model is the sophistication involved in projecting cash flows. Traditional liquidity models tend to be static and may not adequately account for changes in key variables. We integrate projected cash flows that are already incorporated in the ALM income simulation.
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ALM First On-Demand
ALM First On-Demand lets you analyze “what if” scenarios instantly via our Web site. It combines the complexity of ALM First’s modeling assumptions with the ease of a Web browser that is tailored to suit your individual needs. Simply change a dividend rate and add balances to a loan type, and you can instantly see the change in ROA, net interest income, and the percent change in economic value. This feature gives you a quick and general sense of the incremental risk versus earnings of balance sheet changes.
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Hedging with Derivatives
Transferring risk to a third party through hedging can be an effective tool in certain situations. The foundation of our hedging program is the analysis of a financial institution’s balance sheet and identification of its inherent risk through net economic value (NEV) analyses. We use this information, as well as our years of experience with derivative instruments, to determine appropriate hedging strategies, build effective hedge transactions, and achieve desired risk profiles.
Ongoing Education and Training
Each year for clients, educational and performance review sessions are held onsite, providing an excellent opportunity for your executive management and board of directors to review balance sheet performance and formulate strategies. ALM First also sponsors two outstanding annual events - the Financial Forum and Financial Institute - that feature some of the finest speakers in the industry, and provide many networking opportunities. Periodic webinars and quarterly newsletters also give you valuable information about industry news and trends.
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