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Financial institutions are clearly seeing higher rates and a flatter curve in 2018. With the market expecting one more rate hike in December, it is important to look at your depository’s current financial conditions and hedging strategies with today’s rate environment...read more
High performing institutions understand the importance of evaluating all asset classes when constructing their balance sheets, including whole loans. Just like a securities investment or loan origination, incorporating the secondary whole loan market into balance...read more
Often, institutions are more willing to accept credit risk in their loan portfolio but avoid it in the bond portfolio. Adding credit exposure to an investment portfolio gives investors an opportunity to improve expected returns, as well as diversify risk at the...read more
Hedging programs come in a variety of forms and are used in many industries. Hedging is defined as procedures that adjust, reduce or mitigate negative effects of possible market movements. Many financial institutions use hedging to manage risk, gaining them more...read more
When it comes to product pricing, adhering to a disciplined approach is critical. Often, institutions use an economic transfer price as a benchmark for performance and product pricing, also known as a funds transfer pricing (FTP) framework. Returns based on economic...read more
As we transition out of a record low rate environment, many institutions are looking for answers. Do we have an adequate funding strategy? Are we allocating that funding to the right asset classes? While many questions like this are top-of-mind, one important question...read more
Financial markets have seen significant change since the beginning of 2018. In anticipation of the Federal Reserve’s recently announced rate hike, and predictions of two or three more this year, swap and treasury securities were sold off following a severe flattening...read more
Liquidity Risk Management: “the risk that an institution’s financial condition or overall safety and soundness is adversely affected by an inability (or perceived inability) to meet its obligations.” – Bank for International Settlements (BIS) Liquidity Risk...read more
Mortgage pipeline hedging falls under the broad umbrella of secondary marketing. The goal of pipeline and secondary marketing risk management is to consistently deliver loans profitably to investors while minimizing risk to the institution. How can an institution...read more
As many are aware, employee benefit costs continue to rise. As is the case with any problem, putting it off, though probably the easiest approach, is dangerous. There are many ways to offset these expenses, and a prudent management team recognizes the need to address...read more
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“ALM First” is a brand name for a financial services business conducted by ALM First Group, LLC (“ALM First”) through its wholly owned subsidiaries: ALM First Financial Advisors, LLC (“ALM First Financial Advisors”); ALM First Advisors, LLC (“ALM First Advisors”); and ALM First Analytics, LLC (“ALM First Analytics”). Investment advisory services are offered through ALM First Financial Advisors, an SEC registered investment adviser. Balance sheet advisory services are offered through ALM First Advisors. Financial reporting services, loan introduction services, and other special project services are offered through ALM First Analytics. Neither ALM First nor any of its subsidiaries provide legal, tax, or accounting advice.
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