Solutions for regulatory compliance can be solutions for sound financial management also. MPS is 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!
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, such as liquidity management, allowance for loan and lease losses, VaR, and mortgage pipeline software, are also verified by MPS.
Quantifying historic balance sheet behaviors and forecasting their expected future paths is vital to liquidity and interest rate risk compliance. MPS advanced statistical assessments quantify your institution’s recent core deposit and CD supply, repricing, and term related dimensions and measure loan prepayments at the industry's highest level of precision. These best practice liquidity and ALM model inputs empower you to attain defensible regulatory compliance and enhanced business related applications.
FAS related valuations and impairment tests are now a part of many financial reports. The high visibility of these inputs mandates precise valuations and testing produced according to FAS guidance and complete independence. MPS provides high precision compliance solutions for core deposit intangible (CDI), CD, and loan valuations relating to ASC 825 (FAS 107), ASC 805 (FAS 141R), and ASC 820 (FAS 157), plus ASC 350 (FAS 142) goodwill and CDI impairment testing. Special valuations for TARP warrants and Preferred Stock are also available.
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 reports are provided.
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 earnings at risk from unique perspectives.
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 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.