The Prediction Issue
No one can predict the rate and economic environment. Yet, we can make sure we have strong risk management cultures in place.
Translating the language of liquidity, interest rate risk, credit stress, capital planning, and earnings/NIM has never been more challenging or critical. DCG offers a robust array of asset/liability management solutions that empower institutions to better listen to their balance sheets, ensure policy appropriateness, and be best prepared to manage elevated regulatory scrutiny.
DCG’s core deposit analysis transcends the industry-standard components of a core deposit study. Beyond providing best-in-class quantitative support for key model inputs such as pricing betas and average life assumptions, DCG's analysis enables institutions to understand and explain the results, backed by actionable insights.
Arm your institution with a forward-looking risk assessment that provides immediate feedback regarding capital adequacy for current and ongoing credit risk. Receive detailed documentation, including loss estimates by portfolio for each of the Federal Reserve stress scenarios and under a range of expert economic forecasts.
Loan portfolio prepayments and optionality significantly impact risk models and lending strategies. Defending these behavior patterns is critical when preparing for examinations. Rely on DCG's holistic loan portfolio perspective and analysis tool to unlock strategic insight for ALCO and senior lenders.
A liquidity management process should help optimize a liquidity position and provide robust contingency planning support. DCG's comprehensive guidance and liquidity risk monitoring, stress testing, policy development, and “what if” simulation tool can help drive strategy beyond regulatory expectations.
Improved net interest income by 10% for $1B institution via execution and defense of portfolio lending strategy.
Devised and helped facilitate rising rate “de-risk” plan for $200M credit union under regulatory order without increasing funding costs or reducing interest income levels.
Developed cash deployment plan for $700M bank with over $100M in cash to optimize liquidity yield by an extra 130bps while maintaining asset sensitive preference over the longer-term horizon.
Recommended on and off balance sheet hedging strategies for $6B bank that reduced falling rate exposure by 50% and added millions of dollars of current and future earnings.
Provided $3B bank liquidity cashflow analysis and interest rate risk modeling foundation for investment strategies that increased NII by 15% and reduced falling rate risk.
How confidently are you executing on strategy? How well will your institution weather unanticipated challenges? DCG works with clients on comprehensive, executable capital plans that assess earnings and capital over a longer-term horizon, show the impact of institution-specific stress events, forecast capital ratios synchronized with business plans, and quantify the impact of potential relief strategies.
Institutions benefit from decades of experience with examiner-ready reporting output, which includes a clear and concise presentation of results as well as board-friendly, comprehensive documentation.
DCG's expert analysts are in ongoing collaboration with clients to develop comprehensive budgets for a range of institution types and sizes. Using the tailored dynamic models DCG builds, maintains, and updates as part of the quarterly interest rate risk and balance sheet management process, the team crafts detailed budgets specific to each client's goals.
Institutions can count on DCG's expert team of analysts and data modelers to help them meet all reporting requirements when it comes to compliance with ASC 825 Financial Instruments, including the credit losses standard issued in 2016.