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ALM

In today’s regulatory environment, Asset/Liability Management (ALM) is a major point of emphasis for credit unions of all sizes.

As credit union balance sheets continue to grow, so too does the need to manage increasingly complex investment and loan portfolios. As such, ALM is less of a luxury and more of a necessity.

Since 1992, the Asset & Investment Management (AIM) Team has consulted with credit unions of all asset sizes, providing sound, practical and impartial financial advice. With AIM, you can join a trusted partner who will help manage your assets and meet your targets.

ALM Risk Modeling and Reporting provides your credit union with a robust report that goes far beyond regulatory requirements. Your credit union will receive ratio analysis with peer comparisons, detailed income simulations with the ability to run customized what-if scenarios, and a suite of tools to measure exposure to interest rate risk (IRR). These reports are presented in an easy-to-understand format on a schedule that is customized to your preferences. 

The ALM modeling process has become more complex over the years due to new products, technological advancements and regulatory requirements. Understanding these more complex models requires a level of expertise that is beyond the scope of most internal audits.  The AIM Validation service offers credit unions an unbiased, third-party review of the entire ALM process.  Whether a validation is requested by regulators or sought for your own peace-of-mind, our thorough review will answer any questions and highlight areas that may need improvement.

Understanding your credit union’s deposit behavior is essential to enhancing ALM modeling and making informed deposit decisions. The AIM team can provide a thorough analysis of relevant patterns through both our Core Deposit Study and Rate Sensitivity Analysis. Working alongside you, we will use this information to determine appropriate assumptions that are both realistic and conservative so you can feel confident when using IRR modeling results to make decisions.

The short-term nature of credit-unions' liabilities has long been an important risk factor to consider. A liquidity stress test from AIM can help make that risk more quantifiable and actionable. Our detailed analysis provides a full sources and uses report and a range of stress events that is customizable to the size and complexity of your institution. This analysis will help identify shortfalls, establish liquidity trends, and provide guidance in finding solutions.

Education and Training is at the heart of what we do. As part of the ALM Risk Modeling service, each periodic review of the ALM Report offers an opportunity for direct training with the credit union’s management team, Board of Directors, ALCO, and staff. In addition, specific training and education on ALM topics is always available on an as needed basis with our subject matter experts. 

There are many supplemental reports that AIM can provide on an ad hoc or ongoing basis. Some of these supplemental services include merger analysis, cashflows, fair value reporting, prepayment modeling, budget preparations, policy review, and peer analysis. If a report that you are looking for is not listed here, contact AIM and we would be happy to make a determination on whether we can assist. 

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