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All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Asset Management Group, Inc. Any material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Links to other sites should not be construed as endorsement of that site's advice and/or products. Although Asset Management Group, Inc. is a subsidiary of Country Club Bank, nothing presented here should be construed as either an offer to buy or sell securities, and does not represent a guarantee by the bank, implied or otherwise, of any financial asset.
Disclaimer

Disclaimer

All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Asset Management Group, Inc. Any material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Links to other sites should not be construed as endorsement of that site's advice and/or products. Although Asset Management Group, Inc. is a subsidiary of Country Club Bank, nothing presented here should be construed as either an offer to buy or sell securities, and does not represent a guarantee by the bank, implied or otherwise, of any financial asset.

Wednesday, June 29, 2016 Data Aggregation - The impact on your results
Does your model provide you with the most accurate picture of your balance sheet?  All asset liability models have to aggregate data at some point in the process.  The timing of that data aggregation can have an impact on the results you receive.  Most models in the market place today use instrument-level data from your core provider as a starting point for analysis.  However, what your model does with that information after it is received makes all the difference in the results.  Many models look for homogenous groups within the instrument-level data with which to perform the analysis.  The more categories that are used for analysis, the better.  However, the best solution and what is more unusual in the market place is a model that analyzes each instrument individually then aggregates the results for an easy to read report.

The charts above show the impact on income of a grouping of 10 commercial loans that re-price within 12 months.  Because timing is important of when each loan re-prices, being able to analyze each loan individually has a big impact in the results we have seen, even in the most simple balance sheet structures.  Models that are capable of this type of instrument level analysis are generally more expensive than models that aren’t capable of this analysis.  The above sample shows an income difference of 6.63% on just $3MM in loans, how big would the impact be on your portfolio? If you are making decisions on results that do not accurately portray your interest rate risk position, the cost could certainly be far greater with a “cheaper” model.

Note: All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Asset Management Group, Inc. Any material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Links to other sites should not be construed as endorsement of that site's advice and/or products. Although Asset Management Group, Inc. is a subsidiary of Country Club Bank, nothing presented here should be construed as either an offer to buy or sell securities, and does not represent a guarantee by the bank, implied or otherwise, of any financial asset.

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Disclaimer

All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Asset Management Group, Inc. Any material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Links to other sites should not be construed as endorsement of that site's advice and/or products. Although Asset Management Group, Inc. is a subsidiary of Country Club Bank, nothing presented here should be construed as either an offer to buy or sell securities, and does not represent a guarantee by the bank, implied or otherwise, of any financial asset.