Insight, not estimate

We have made insight our habit. It’s not something that we just strive for – we live by this principle every day.

Cash-flows

Connected

Scenarios

Incorporate Cash-Flow at granular level

• Generate contractual cash-flows at instrument level

• Current book of business from individual Instruments are key to accurate margin forecasts

• The run-off & repricing profiles of the current book to business so the focus can be on new growth and accurate balance sheet and margin estimates

Reflect Customer Behavior

• Prepayment assumptions & early redemption

• Differing behavior of non-term products

• The seasonality of credit line utilization rates

• Changes in loan quality under various economic scenarios

Incorporate Funds Transfer Pricing

• FTP transfers isolates interest rate & liquidity risks to funding center (not treasury) to centrally manage.

• Immunizes the line units from market fluctuations and focus on what they can control

• Simplifies planning efforts and strengthens buy-in to the plan or forecast.

Apply Key Drivers in the Forecasting Process

• Connect expenses to portfolio & new business volume projections

• Precise understanding of cost drivers and closely align budgets with planned activity.

• Expense/Sales targets not based upon who is the best negotiator or by just adding a few dollars to last year’

Incorporate Market Interest Rates and Other Macroeconomic Variables

• No business is more affected by local and macroeconomic variables than a bank and banks balance sheets & profitability

• Future interest rate levels, economic activity and inflation each have significant influence over loan and deposit growth, portfolio re-pricing, bad debts, non-performing loans and bank expenses..

Differentiate Business as Usual From Strategic Initiatives

• Develop an approach that can differentiate individual strategies from business as usual

• Layer board-driven future bank initiatives & strategies to model multiple scenarios (e.g Climate Change)