Catch These Pre-Conference Workshops at the Eleventh Annual CUNA CFO Council Conference

CUNA CFO Council
March 3, 2005

This year’s pre-conference training workshops will deliver a one-two punch for asset/liability management modeling. Attendees will learn how to effectively back-test our ALM models in the first workshop, “Massage Therapy: Achieving Better Results through Effective ALM Back-Testing.” During the second workshop, “Best Practices in Conducting Your Own Core Deposit Study,” participants will explore the many uses for a good core deposit study and will learn the modeling criteria necessary to perform our own in-house study.

The facilitator of these workshops, John R. Molenda, Jr., is a frequent speaker at Sendero’s annual Path Conference and has served in treasurer, CFO, CIO, and COO capacities in institutions with assets as large as $1.8 billion.

The topics of back-testing and model validation are becoming increasingly important. With interest rates on the rise, regulators are becoming more stringent on institutions that are not back-testing their ALM models.

Institutions currently find themselves in a very good economic environment in which to test past assumptions using current financial results. This session will take a close look at model validation through back-testing in a best practices-type of environment. Emphasis will be placed upon testing previously generated “most likely” rate scenarios as compared to the actuals experienced during the various forecast cycles. Variances will be drilled down from the macro level to the assumptions level. Suggestions will include which ALM reports should be saved in current periods, to then be used in future periods to be used as the basis for future back-testing.

One of the most significant changes in financial institutions’ balance sheets over the past several years has been the influx of non-maturity deposit accounts (NMDAs). This session will show attendees how to perform a core deposit study. Analytics will include how to model cash flows and the separation of rate sensitive from non-rate sensitive non-maturity deposit accounts. This is a very “nuts and bolts” session as it will go over exactly how to perform these studies, and not simply review the theories behind the numbers. An emphasis will be placed upon compiling the best core deposit study possible with limited data criteria.

John R. Molenda, Jr. is CFO for Sandia Area Federal Credit Union in Albuquerque, New Mexico. John’s workshops will be held on Sunday, May 15, at the Capital Hilton in Washington, D.C. For more information, contact Cheryl Sorenson at csorenson@cuna.coop or 608-231-4393, or visit the council’s website at http://www.cunacfocouncil.org/events/conf05/conference05.html.