FinPro’s Asset Liability Management Service utilizes FinPro’s proprietary ALM model to provide the analytics necessary to define, measure, monitor, and manage interest rate risk.

Managing Risk is a Key to Success

Managing interest rate risk is not just a regulatory requirement but an essential element to the overall success of your institution. With FinPro, you’ll receive the most accurate analytics possible, in a format that is easy to comprehend, so you can make informed decisions more efficiently. Our service will analyze the key elements to managing interest rate risk including GAP and Net Portfolio Value (NPV) analyses, as well as a Net Interest Income Simulation over a 24 month time period. We can also incorporate internal policy limits and compare each of these ratios against those limits.

Precise Analytics

Reliable and accurate information is the key to managing interest rate risk. Our independently audited model enables our analysts to: Measure interest rate risk in account-by-account detail for all investments, loans, deposits, and borrowings.

Incorporate specific product details including call options, prepayment speeds, deposit decay rates, beta values, and actual repricing information. Produce customized interest rate scenarios to capture “realistic” rising and falling interest rate environments, as well as instantaneous rate shock scenarios.

Save Time and Money

By outsourcing the ALM process, management can focus on implementing the strategies necessary to manage interest rate risk while maximizing value at their institution. The FinPro ALM process includes:

Data collection and manipulation

Consultation with the institution to customize analysis and report

ALM modeling and analysis

Report presentation

Sophistication Made Simple

Once the data is compiled, a FinPro consultant will analyze the data and produce a report with commentary in a format that is easy to comprehend. Our interest rate risk report includes:

Current and projected interest rate risk analysis including Gap, NPV, and Net Interest Income analysis.

Historical trend analysis of investments, loans, deposits and borrowings in account level detail

In-depth analysis of the time deposit portfolio including remaining maturity balance and repricing of maturing time deposit balances

Peer comparisons

External interest rate environment report

Threats, opportunities, and strategies.

A True Service Partner

At FinPro, we’re tied to the overall success of your institution. As such, our service also includes periodic presentations to the Board and Management to discuss interest rate risk as well as any other banking topics. At the client’s request, we can also provide investment advice, balance sheet restructuring recommendations, IRR and ALM training, and interest rate risk and ALCO policy review.