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2021 Foresight with 20/20 Hindsight…What Lies Ahead for ALCOs to Consider

On-Demand Webinar (February 24, 2021)

Eric Poulin

Senior Consultant

Darling Consulting Group

Eric is a Senior Consultant at Darling Consulting Group where he assists community financial institutions with the delicate balance of optimizing earnings while prudently managing risk. In this role, he works collaboratively with ALCOs to develop comprehensive strategies related to all aspects of Asset Liability Management. Eric strives to distill complex concepts into actionable intelligence and delights in bringing education to the industry.

Frank Farone

Managing Director

Darling Consulting Group

Frank consults nationwide with CEOs and CFOs of financial institutions to increase earnings through the proactive management of capital, liquidity/funding risk, and interest rate risk. He is a frequent speaker and author on topics such as industry issues and trends, funding solutions, regulatory issues, interest rate risk management, capital management, and derivatives hedging techniques.

Frank was designated a “top-rated” speaker by FMS and is well known for his popular seminar “Turbo Charging Your ALCO Process” having helped thousands of bankers across the country.

Flying blind in the current economic storm is a not a desirable situation; in fact, it should be frightening. Never before in our careers have we been faced with a situation similar to what we are challenged with today: a pandemic the impact of which will forever reshape our lives, cash and deposits growing at unprecedented rates with no end in sight, historically low rates, and a transparent Fed suggesting we are down here for the foreseeable future, negatively impacting margins and earnings as far as the eye can see. Loan growth and related competition for loans continues to intensify as bankers are desperate for yield in a near-zero rate environment in the bond market.

The Antidote for Today’s Risk Management Ills

The solution to managing through the current malaise starts with bringing clarity to the risk management process. A strong interest rate risk (IRR) modeling process is the first step in providing clarity that leads to effective strategy execution. Foresight is never 20/20 in the banking world, but understanding what key variables are impacting your current risk profile and future risk position is critical. Key assumptions that influence the outcomes in our ALM models are fairly predictable and can be reasonably forecasted under various rate environments leading to valuable insights for strategy development.

Sorting Through the Clutter – the Dreaded ALCO Meeting

Though this process of building a model, digesting the information, and executing strategy sounds relatively straightforward, it can be quite complex – from data integrity, to assumptions, to analytics, to over one hundred pages of reporting, to the balancing act of strategy execution – it is no wonder many community financial institutions find this process to be overwhelming. This does not have to be the case! After decades of refining this exercise with hundreds of community financial institutions on a quarterly basis, we have found ways to make this process efficient and approachable.

Please join Managing Director Frank Farone and Account Manager Eric Poulin as they transform the complex ALCO meeting into a simple and comprehensible dialogue. Learn 5 key steps to make your ALCO the best it can be and what is required to develop and execute meaningful strategies for your institution today with conviction. 

This timely webinar will build upon the groundwork laid during Frank’s inaugural 2021 webinar, “Balance Sheet Strategies with 2020 Hindsight: The New Abnormal in Asset/Liability Management” and will cover the following critically important topics:

  • Having confidence in the foundational IRR model (common issues explored)

  • Utilizing data analytics for assumption development (hindsight leading to foresight)

  • Key considerations for strategy formulation

  • Keep it simple – consolidating reports into a digestible format

  • Reshaping the narrative at ALCO

  • Listening to your balance sheet

  • Policies designed for the new “abnormal” in balance sheet management

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