Strategic Advisory Services
The Director of Strategic Advisory Services is Jim Fugitte. With his
extensive community banking and entrepreneurial experience, he’ll
help your bank discover its unique strengths and how to use them
to increase your revenue. These services are most effective when
combined with StrategyGPS.
Market Analytics Services
The Brains behind Market Analysis is Kevin Stang. For over 20 years he has been assisting financial institutions develop revenue enhancing market strategies. Advanced market analysis and your own performance metrics are blended into actionable objectives. Key areas of focus include branch expansion/reduction, M&A, Branch Plans/Goal Setting, Product Design, and investment decisions related to customer-facing and digital banking services. Plansmith offers 3 Market Analysis Plans to fit your needs.
Asset Liability Management Services
Dave Wicklund, former Senior Bank Examiner and Capital Markets
specialist, oversees all of our asset liability management services.
Receive guidance on aspects of your business such as outsourced
IRR modeling, IRR sensitivity, stress testing, board training, and
decay rate studies. Click here for our ALM Advisory Services Video Series.
Each quarter, a Plansmith consultant will meet with management (via teleconference) to:
- Comprehensively review all model results
- Provide input to management on the magnitude of current Interest Rate Risk (IRR) and liquidity risk positions
- Monitor compliance with Client’s policy limits
- Provide input on current Regulatory areas of concern
- Discuss factors unique to Client that impact policy specifics
Capital Planning and Stress Testing
Plansmith will develop a Capital Maintenance Plan and Policy for Client which will include a management development session and comprehensive risk profile assessment. The Plan will address the following areas:
Capital Stress Testing
- Client’s Risk Profile
- Capital Requirements
- Capital Alternatives
- Reporting Requirements and Policy Exceptions
- Policy Review
Plansmith will develop three separate stress test scenarios, conduct the noted stress tests, and perform reverse stress testing. Client will be provided with a Capital Stress Test summary narrative report documenting the stress test, including methodology, assumptions, and assessment of results.
Cash Flow Model Stress Scenario Development
Plansmith will assist in the development of cash flow model stress scenarios, including Client-specific and systemic events as required by the FFIEC’s 2010 Interagency Policy Statement on Funding and Liquidity Risk. Plansmith will also provide a written narrative detailing the stress scenarios, and suggestions for policy parameters for each scenario.
Contingency Funding Plan Review & Development
Plansmith will develop a comprehensive CFP detailing three cash flow model stress scenarios, including Client-specific and systemic events as required by the FFIEC’s 2010 Interagency Policy Statement on Funding and Liquidity Risk. The CFP will address the following areas:
- Stress Events
- Monitoring Framework for Contingent Events
- Levels of Severity and Timing
- Funding Sources and Needs Projections
- Potential Funding Sources
- Liquidity Event Management Process
- Testing of Standby Liquidity
- Review of Plan
Decay Rate Studies
Plansmith will develop and provide documentation of Client-specific non-maturity deposit (NMD) decay rates for Demand Deposits, Negotiable Order of Withdrawal (NOW), Money Market, and Savings accounts. The analysis will also incorporate a full surge deposit analysis using historical institution-specific data.
IRR Assumption Development & Documentation
Plansmith will develop Interest Rate Risk (IRR) model assumptions (decay rates, loan prepayments, deposit re-pricing, and driver rate selection) to ensure consistency between current Regulatory guidance and Client’s pricing and funding strategies.
Plansmith will develop a Client specific “Assumption Documentation Report” summarizing and supporting all of Client’s key model assumptions as required by the 2010 FFIEC Advisory on Interest Rate Risk Management. Plansmith will also assist during Client’s next Regulatory examination regarding any issues arising from Interest Rate Risk model assumptions, mechanics, and output.
Plansmith will conduct Interest Rate Risk (IRR) backtesting for the Client and will provide Client with a written report summarizing the procedures and results. The backtesting will include the earnings at risk model results and selected key model assumptions.
IRR Independent Review
Plansmith will conduct an independent review of Client’s Interest Rate Risk (IRR) program, addressing the following areas:
- The adequacy of, and personnel’s compliance with, the bank’s internal control system
- The appropriateness of the bank’s risk management system given the nature, scope, and complexity of its activities’
- The accuracy and completeness of the data inputs into the bank’s risk measurement system’
- The reasonableness and validity of scenarios used in the risk measurement system
- The validity of the risk measurement calculations. The validity of the calculations is often tested by comparing actual versus forecasted results (in periods of changing market rates)
IRR Policy Review & Development
Plansmith will develop comprehensive Interest Rate Risk (IRR) policy guidance to ensure compliance with Regulatory expectations. Plansmith will also assist Client in developing appropriate limits for Interest Rate Risk measurements. The policy guidance will address the following:
- The Interest Rate Risk Management System
- Board & Senior Management Oversight
- Risk Measurement and Modeling
- Risk Limits
- Risk Monitoring and Reporting
- Review and Validation
IRR Sensitivity & Stress Testing
Plansmith will conduct three separate sensitivity tests on the Regulatory identified key model assumptions of asset prepayments, non-maturity deposit repricing, and non-maturity deposit decay rates. Plansmith will separately stress test the assumptions in each area, rerun the model under the revised assumptions, and provide a narrative report comparing the original output to the sensitivity tested results.
Liquidity Management Independent Review
Plansmith will conduct an independent review of Client’s liquidity risk management program, addressing the following areas:
- Corporate governance/management oversight
- Policies, procedures, and risk limits
- Risk measurement and monitoring systems
- Management of intraday liquidity
- Contingency funding plans (CFP)
- Internal controls
Liquidity Policy Review & Development
Plansmith will develop comprehensive liquidity policy guidance to ensure compliance with Regulatory directives and will assist Client in developing appropriate limits for liquidity measurements. The guidance will address the following areas:
- Liquidity and Funding Oversight
- Liquidity and Funding Issues
- Overall Funding Strategy
- Measurement of Liquidity and Funding Risk
- Reporting Procedures and Corrective Action
- Contingency Funding
- Independent Review
Loan Prepayment Studies
Plansmith will develop Client-specific dynamic loan prepayment assumptions. The prepayment assumptions will be based on Client-specific data and include prepayment rates for stable, rising, and falling rate shock scenarios.
Outsourced IRR Modeling
Client will be provided with quarterly Interest Rate Risk (IRR) reports addressing all Regulatory required reporting scenarios. Plansmith will develop and document all key Interest Rate Risk model assumptions (decay rates, loan prepayments, deposit repricing, and driver rate selection). The service also includes complete examination and audit support.
Plansmith will deliver Board training focusing on the Client’s Interest Rate Risk management report. Training will cover the primary measurement and risk methodologies, key model assumptions, Regulatory expectations for Interest Rate Risk (IRR) and liquidity management, and the Client’s risk profile.