Risk Manager

The Asset/Liability Total Package

The right Asset/Liability system is a combination of comprehensive measurement and reporting, combined with a level of complexity that is right for you. The ICBA Securities Risk Manager is the total package. Asset/Liability management is not a one size fits all prospect. The complexity of the processes used is dependent on your needs, the time and resources available, and the level of risk being managed.

Software

Using the BASIS software from Darling Consulting Group, ICBA Securities Risk Manager provides a powerful solution to your A/L needs. The system allows for virtually unlimited scenarios and “what ifs” to provide our clients the tool necessary to adequately manage the balance sheet, no matter what the size. The ICBA Securities Risk Manager allows quick and easily run alternate scenarios. These scenarios can be structured to answer a variety of “what if” questions, such as “What happens to earnings if I do not realize my expected growth?” or “What happens under different rate scenarios?” If it can be imagined, it can be modeled. The possibilities are almost endless, providing you with the power you need without the headaches of maintaining your own systems.

Flexibility

Our service provides you flexibility. With the ICBA Securities Risk Manager, you set the level of model complexity to be consistent with your needs! Your level of complexity is dependent upon your modeling desires, not limitations of your software. For example:

Rate Scenarios – Interest rates unchanged? Rates shocked or changed over time? Rates changed parallel or dynamic? With the Risk Manager, your performance is forecast over 7 rate scenarios of your choosing. Whether rate shocks for a “worst case” measurement, or ramp rate changes over time, the choice is yours! You decide whether to use parallel shifts in rates, or a more “realistic” rate path, or both!

Growth – One of the major components of any A/L model is the changing composition of the balance sheet. Using the Risk Manager, you project what your balance sheet will look like in the future by controlling the growth rates for each account. Do you have loans on the balance sheet no longer being replaced? No problem! Under our standard service, you can elect to have each account grow by whatever percentage you wish, or not grow at all.

Compliance – As you evaluate your A/L position, one the key aspects is compliance with key ratios approved by your ALCO and directors. Most of these ratios can be tracked by our system and included with your standard report set. Not just net interest income at risk (NII), and economic value of equity at risk (EVE), but liquidity ratios, balance sheet calculations, and most other ratios defined by your policy. Your reports each quarter include a page just for compliance and include only those ratios you request. The end result is a clear presentation of your position relative to your policy limits.

Power

Track your Progress
To help you track your trends and progress, our reports include a comparison to your previous ratios and balances. Additionally, we include selected ratios vs. your peer group, either nationally, regionally, or a peer group you select. The result is a report set that assists your management in evaluation of your current asset/liability position. To assist you, we even include an Executive Scorecard that numerically rates your positions against peer ratios to give you a quantitative measure of your overall risk.

Reporting
Standard reports are delivered each quarter via electronic mail. Detailed files are also provided for your records, listing specifics for each scenario processed. The package includes an executive summary, designed to assist you in evaluating risk positions. The report includes full color charts and graphics of your current positions, historic data, and peer data. The Risk Manager provides risk evaluation for net interest income and balance sheet composition under each scenario processed. We also include a full evaluation of the economic value of equity (EVE) and the risk to that economic value under your processed rate scenarios. This measure helps you assess the potential to degradation of capital ratios, and long-term exposure to changes in interest rates. The Risk Manger also evaluates the changes in cash-flow for each of your balance sheet sectors, using your defined assumptions. An analysis of the effects of this optional cash-flow (optionality) helps you evaluate your interest rate risk due to those changes.

Support
Through the years, our customers have learned to rely upon us for un-paralleled service and customer support. Whether you need assistance in documenting your assumptions, understanding of the result implications, or presentations to your board, our trained staff will be here to assist you. Our customer support is available as often as you want, as much as you need. Our only goal is to insure you receive reliable timely data in a format you can use and understand. Through our strategic partnership with Darling Consulting Group, ICBA Securities offers the full scope of Asset/Liability consulting services, including balance sheet management and advisory services, strategy development workshops, management and director education, ALM model and process reviews, and core deposit studies.

Contact your account representative or Sheri Davis at (800) 422-6442 for additional information.