There are many moving pieces involved in managing the balance sheet of a financial institution. MPS services add certainty and confidence to the financial management process by quantifying the behaviors that contracts don’t specify – such as core deposit supply, repricing, and maturity and loan prepayments and pay downs – and verifying that analysis tools such as ALM models are both theoretically capable and produce accurate forecasts.
MPS also meets unique needs such as specialized rate ramps for income at risk analyses, core deposit intangible (CDI) valuations and other purchase accounting information for FASB reporting, and index type core deposit values for equity at risk analyses.
Because MPS is an independent and objective expert, clients trust MPS solutions to call it straight. Regulators like that too, enhancing the compliance value of MPS services.
Balance Sheet Management Solutions
Specifying the right behaviors and values for core deposits and quantifying loan prepayments and pay downs are two of the toughest challenges in balance sheet management. MPS has the industry’s best practice solutions for both. MPS can also certify that in-house or out-sourced ALM models (or other financial tools, such as mortgage pipeline software) are appropriate for the institution, correctly defined and populated, produce accurate forecasts, and are well supported by current ALCO policies and procedures.
Regulatory Compliance Solutions
Good business solutions are usually also good regulatory compliance solutions as well. MPS designs its services to serve both roles, saving management time and money. Key MPS services speak directly to current regulatory mandates to accurately measure interest rate risk (IRR) and assess model risk in ALM and other financial models. Other MPS deliverables serve regulatory niche needs, such as non-linear rate ramp scenarios for use in income at risk analyses or national index core deposit present value and duration inputs for equity at risk analyses.
Deposit and Loan Valuation Solutions
Mergers and acquisitions create the need to move carefully: measure twice and cut once is the advice. MPS core deposit intangible (CDI) valuations for FAS 141 reporting and purchase accounting treatment valuations for CD’s and loans are independent and based on the industry’s most advanced assessment methodologies. MPS services can also pre-quantify both the buy and sell side values of a transaction’s deposits, empowering decision makers with dual insights into value. Institution specific deposit and loan prepayment/pay down analyses, representing the highest point of deposit value accuracy, can also be produced.