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Online ALM Training Series

Southeast Corporate is offering members a free asset liability management training series. This series offers a comprehensive training program that provides participants in-depth education about key ALM concepts, how to read an ALM report, and ultimately how to make better day-to-day ALM decisions for their credit union.

This series is comparable to expensive day long, on-site educational sessions without the tuition and travel costs. It is perfect for executives, board members and ALCO committee members. In the series our in-house experts explain, in easily understandable language, complex topics such as the various risk types, GAP, duration, options, NII, NEV and model assumptions.

The videos average 20-30 minutes in length. Because these topics are divided into manageable presentations, participants can complete each topic at their own pace and refer back to previous topics at their convenience in the future. The presentations feature ALM expertise from Southeast Corporate's Vice President of Interest Rate Risk Assessment Trey Rudder, Financial Strategist Tanya DeVlieger, and Peter Gibson, the Director of Accolade Investment Advisory, LLC.

ALM Educational Series:

Session One - Types of Risk click here

Session Two - Gap and Duration Analysis click here

Session Three - Net Interest Income and Net Economic Value click here

Session Four - Executive Summary click here

A Credit Union's ALM Checklist

Set Clear Goals – Part of your credit union’s strategic planning process is long range goal setting. Set clear goals and objectives that are understood and seen to be achievable by your ALCO committee and your employees. Remember clear goals are reasonable goals that are measurable and have a time frame attached.

Understand the ALM Process – Your ALCO and Board should have a good general understanding of ALM basics at the least, and likely will know a lot more. Since ALM is an area that is constantly changing, a sound education program for those in governance and management positions is paramount. ALM goes well beyond sound ALM policies and reporting on time, it is an ongoing process.

Your Asset Liability Policy – When you write an ALM policy you determine the acceptable risk and return levels for your credit union. Duties of the Board and ALCO are also outlined, as well as your credit union’s procedures for ALM. Simple, clear policies work best to give your credit union the guidance it needs.

Measuring ALM Risk and Returns – A means of reporting is necessary for your Board and ALCO to view the past, present and future ALM positions of your credit union. Your reporting method should clearly demonstrate if your credit union is in compliance with its ALM policy limits and point out opportunities. Southeast offers several affordable ALM modeling tools that can assist in this process. One of the best ways to manage ALM risk is to run ALM modeling based on your credit union’s risk profile. Regular review in this manner will provide a picture of where you stand in relation to the current interest rate environment.

Executing the Process- Effective ALM management means ongoing and consistent execution of your ALM process. You cannot simply measure and let it go. Your ALCO is responsible for implementing an ongoing ALM process. Periodically they summarize ALM results and report them to the Board. An attitude of taking ALM seriously must permeate your organization.

ALM Bottom Line – Remember, it is not your money you are managing; it is your members’ money. Interest rate risk looms large but you can help mitigate those risks with a vigilant ALM process.