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Headline: CU-ALM Report: The Long Route - NCUA's Long-Awaited IRR Policy Regulation

Examining Your Liquidity Risk Before
the Regulators Do

liquidity risk

By Mark H. Smith
CEO, Mark H. Smith Inc.

After several years of consternation and handwringing, the NCUA has finalized its requirements for analyzing, estimating, and managing liquidity risk. Every federally insured credit union is impacted—small credit unions to a lesser degree than larger ones.

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NCUA Unfurls New Net Worth Proposal

By Mark H. Smith
CEO, Mark H. Smith Inc.

On January 23rd the NCUA released its 198 page risk based net worth (capital) proposal which if enacted will dramatically alter the way in which credit unions manage their balance sheets. The proposed rule applies only to NCUSIF insured credit unions with assets greater than $50 million.

Learn more about NCUA's new proposal.

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Accessing the Fed Discount Window

By Jason Williams
Financial Analyst, Mark H. Smith, Inc.

Federal Discount Window

If there is one thing that we learned from 2008 and the ensuing financial crisis it is that market conditions can combine very quickly to deplete a financial institution's liquidity reserve.

Up until a few years ago a functioning and tested liquidity facility was not even on the radar for most credit unions. Most credit unions relied on the corporate credit union system and it's access to emergency funding from the US Central Corporate Credit Union and its access to the Central Liquidity Facility (CLF). Typically this is as far as liquidity planning went. However, due to the failure of US Central and several of the large corporates, access to the CLF through the corporate system is unlikely.

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New Faces

Please join us in welcoming two new employees to the Mark H. Smith organization.

Matt J. has recently joined Mark H. Smith, Inc. as Senior Financial Analyst/Consultant. He has spent sixteen years working in treasury functions of both large and small financial institutions (banks and credit unions.) He has served as the compliance officer for a large credit union, and in several managerial roles overseeing treasury, investment, and funding of several firms. Matt has considerable experience in developing and performing IRR modeling for banks and credit unions with assets ranging upwards from $100 million.

Michelle Murdock has joined the Mark H. Smith family as Client Coordinator/Analyst. Michelle comes to the organization with a degree in Business Management with a focus on finance. She has been the finance manager for a small manufacturing company and, later, formed her own small business to help companies with cash flow and financial planning.

Welcome Matt and Michelle!

Click to read more about the Mark H. Smith's new team members.

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Economic Outlook – Life After the Taper

economic outlook

By Jason Williams,
Financial Analyst, Mark H. Smith, Inc.

The good news is that after five long years, it may be that the economy is ready to start moving again. Unemployment numbers are coming down. Automobile sales are up and the Congress and Senate appear to be headed towards passing a budget (no wonder as 2014 will be a mid-term election year). Who thought that an approved federal budget would be considered a luxury? If a budget compromise can be reached, it will remove some of the fiscal uncertainty that has plagued interest rate markets the last few years. In sum, we appear to be ready to enjoy better economic growth and consumer borrowing and spending in 2014.

Click to read the full article.

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Jan./Feb. 2014

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Client Corner

Frigid Weather

By Cynthia R. Walker, COO, Mark H. Smith, Inc.

There are many programs, assumptions and methods used to measure IRR risk. There is not one sure method or group of assumptions that will ensure prefect or absolute results. Therefore, it is important to have a good understanding of your analysis and assumptions. The more you understand the ALMPro report and its assumptions, the more confident you will be in relying on the results along with being able to defend the conclusions drawn from your IRR analysis, if they come under question.

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Podcasts
Come On Line

MHSI is excited to announce a new way to gain information about the latest in credit union consultation. Download podcasts created from MHSI's archived webinars. From ALM101 to Swimming with the Sharks, MHSI's top broadcasts are now available in easy-to-manage audio formats.

To access these podcasts, click here.


Complimentary Webinars

Implementing the NCUA Liquidity Risk Regulations
Thursday, February 6, noon MST

ALM 101 — Introduction to Interest Rate Risk and Liquidity Risk
Tuesday, February 11, noon MST

Managing Share and Deposit Costs as Interest Rates Rise
Tuesday, February 18, noon MST

Preparing for Risk Based Capital
Tuesday, February 25, noon MST

ALM 201 — Part I — Exploring Income Simulation
Tuesday, March 11, noon MST

Click here to see full webinar schedule.

Is ALMPro® Plus
Right For You?

This is a more robust IRR and Liquidity Risk solution with enhanced analysis and built-in Dashboard Synopsis. Learn More

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Salt Lake City, UT 84129
Toll-Free: (800) 268-7795
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