> Full-Day: ALM Update 2014

Wednesday, March 19, 2014
10:00 AM Eastern Daylight Time
3:00 PM

Important Update: On January 23rd the NCUA released its proposal for overhauling the credit union net worth requirements. The proposed regulation represents a major overhaul of the capital required for credit unions over $50 million assets and those who may reach that threshold in the future. Although only a proposal at this time it seems certain that it will be approved in some form for 2014.

In our upcoming “ALM Update 2014” seminar on March 19th, asset & liability management expert Mark Smith will include a segment on the proposed Risk Based Capital Requirement.

He will:

  • Outline the major components of the proposal
  • Discuss the procedure for commenting on the proposal
  • Show how the proposed rule may impact credit unions under various circumstances.

The proposed regulation will have a major impact on the credit union system. We encourage you to attend.

Overview: This ALM class is broken down into two topic areas that will be covered including: Interest Rate Risk and Liquidity Risk. With historic low interest rates appearing as if they may move upward this year, both interest rate risk and liquidity risk in the credit union balance sheet may be impacted.

This seminar briefly reviews the basic concepts of interest rate risk and liquidity risk and then addresses the most current aspects of these two basic risks.

ALM Update: Interest Rate Risk
In the fall of 2012 the NCUA released its most recent rule which addresses the topic of interest rate risk (IRR). The rule requires that credit unions over $50 million in assets develop and adopt a written policy on interest rate risk management and a program to effectively implement that policy as part of their asset liability management responsibilities. Credit unions with less than $50 million assets are exempted from the rule. However NCUA has stated that all credit unions need to effectively manage IRR regardless of their asset size. In this course we will review IRR as is relates to the credit union balance sheet. We will explore the most common forms of IRR and present the two most common approaches to estimating and managing this risk.

With interest rates remaining at historic lows but poised to increase in 2014 based on the Fed’s intentions; this session will present a current economic outlook and scenarios in which rates may increase. The focus will be on strategies to increase loan yields as rapidly as possible while holding back on interest and dividend increases for deposits using segmentation strategies.

ALM Update: Liquidity Risk
This course serves as a refresher to liquidity management, with an emphasis on traditional models. By attending the program, participants will gain a basic framework to serve as a guide for developing and revising their own liquidity policy, including liquidity and funding principles and standards.

NCUA has recently completed its final rule on liquidity risk which impacts all federally insured credit unions. This session will review the rule and demonstrate methods to implement the rule at your credit union. Sample liquidity risk policies and contingency funding plans will be presented. The liquidity risk rule is effective for most credit unions on March 31, 2014.

Facilitator:  Mark H. Smith, CEO, Mark H. Smith
Mark, founder of the company, has studied Asset & Liability Management extensively for many years. He provides training and lectures nationwide on the subject. Mark is a graduate of the Weber State University, School of Business, with a degree in business administration/finance. He has over 35 years' experience in the financial services industry. In addition to 20 + years' experience as a consultant and auditor, his professional experience includes bank and credit union examiner and Deputy Supervisor of Credit Unions for the State of Utah, Assistant CFO at a mid-sized community bank, and CEO of a mid-sized community credit union. Mark has served as a member of the AICPA Credit Unions Committee where he played a key role in developing the AICPA Audit Guide for Credit Unions. He has been a speaker at credit union meetings nationwide. Mark is committed to the credit unions he serves. He believes credit union people are the best and deserve the best.

Locations: NJ Credit Union League "live" and via Video Conferencing at Atlantic FCU and Members 1st of NJ FCU.

NJCUL                                Atlantic FCU                    Members 1st of NJ FCU
299 Ward Street                 37 Market Street               37 West Landis Avenue
Hightstown, NJ 08520       Kenilworth, NJ 07033     Vineland, NJ 08360

Time: 10:00 a.m. – 2:00 p.m.


Over $150 Million                         $209.00
$50 Million to $150 Million         $149.00
Under $50 Million                        $  69.00

Note: A 50% discount is available for all CUs under $10 million in assets. Contact Mary Zelinsky at mzelinksy@njcul.org or 800-792-8861 ext. 100 for details.

To register and pay by check, send an email to Mary Zelinsky at mzelinsky@njcul.org and your credit union will be invoiced. To register and pay online, click here.