Regulatory Compliance

Solutions for regulatory compliance are most often solutions for sound financial management also. Thus MPS sees itself as a facilitator of both compliance and performance, often working with examiners and management. MPS services speak directly to key elements of compliance in many areas plus MPS often provides examiner and agency level education. Contact us whenever the need arises!

ALM Model Risk Assessment

Given the complexity of balance sheets, ALM model risk is not acceptable. MPS ALM Model Verification Reports verify the technical details of an institution's model - proving that the model can work - and then verify forecast data in multiple diagnostic formats-proving that the model does work. Other innovative components compare model forecasts to historic margin and stock price (inapplicable) trends to provide a "real world" examination of model accuracy. The conceptual fit of the model to institution needs, data audits, and evaluations of ALCO processes are also provided. Other financial models, e.g. mortgage pipeline software, are also verified by MPS.

Core Deposit and Loan Liquidity

Liquidity must be the first concern of a financial institution, as without adequate funds on hand it cannot operate. Liquidity arises from many sources, but it strongly depends on the behaviors of loans and deposits. Quantifying historic behaviors and their drivers, and projecting expected future behaviors, is vital to liquidity management. MPS advanced statistical assessments quantify core deposit behaviors and loan prepayments at the industry's highest level of precision.

FAS 141 Core Deposit Intangible Values

All of the valuations needed to establish and amortize the core deposit intangible (CDI), plus purchase accounting values for CD's and loans, are provided by MPS deliverables in this area. Average lives inputs based on recent statistical analyses of depositor behavior provide empirically based and documented inputs for CDI values and their amortization term and method.

National Benchmarks of Core Deposit Behavior/Value

The MPS Core Deposit Index Service provides low cost reports that provide measures of core deposit value and duration. The underlying average life data are averages of the MPS client base but balances, rate paid, and repricing inputs are provided by the institution. Bank/thrift and credit union report are provided.

Rate Ramps Income at Risk Tests

Smart Ramps are projections of future ALM model driver rates based on statistical analyses of historic interest rate behaviors. Multiple rate ramp and yield curve twist scenarios are provided to examine income at risk IRR from unique perspectives.

ALM Model Certification

ALM models users want to be assured that the fundamental forecast capabilities of their model are accurate.  The MPS ALM Model Certification service provides an independent assessment of model capabilities. This does not take the place of the verifications required of individual models, but provides a firm foundation upon which to both judge an ALM model and verify its specific implementation.

IRR Exposure Limits

IRR exposure limits define tolerances for interest rate related performance variability, as measured in defined tests.  They can be frustrating to set because there are many design elements involved and best practices are vague.  MPS has a solution that walks you through design issues and provides a simple spreadsheet tool to set best practice IRR exposure limits.