|New analytics provide core deposit reports|
Farin & Associates Inc. rolled out iPrice Core Analytics, which provides what it calls an easy-to-administer nonmaturity core deposit study service.
Farin will produce independent core deposit reports reflecting the degree of rate sensitivity in a financial institution's major account service lines, as well as the historical beta factors. The decay analysis will be conducted two ways: based on the dollar amount per balance and the number of accounts. This dual analysis will give the institution a much clearer picture of their true decay rates.
The Farin iPrice Core Analytics study will take approximately six to eight weeks to complete from the date that the required data is received in full by Farin, and will result in a refreshed perspective on the institution's deposit characteristics, deposit betas, and lag times, along with a renewed confidence in the institution's core deposit position while meeting regulatory compliance.
"The most important set of assumptions going into an A/L Model are those that affect the modeling of non-maturity deposits. To a great extent, small- to medium-sized institutions have relied on the assumptions used in the OTS Net Portfolio Value Model. That is because most A/L vendors use OTS assumptions as default model assumptions. The merger of the OTS and OCC is a blessing in disguise. Most institutions will find that they are more asset sensitive than they had originally thought. This will provide the bank or credit union with options to increase their earnings," says Tom Farin, president and CEO.
"We've been tracking core deposit data and behavior in our iPrice deposit service for years. By combining this experience with our asset/liability knowledge we've created a valuable core analysis service that can be turned around quickly. Yet the data is available for many other uses which will allow institutions to respond to current and future regulatory and planning needs without having to convert it. We think this is especially important to have available when we start to see another rising rate environment," says Darryl Mataya, chief development officer.
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