Consulting and Risk Management Services

Provided through our subsidiary
Financial Institution Management Associates Corporation

We offer the following consulting services. Click on the topic for further details

Credit Risk Compliance Risk Internal Audit Interest Rate Risk and ALM Liquidity Risk Price Risk

Reguatory Risk Reputation Risk Shareholder Value Strategic Risk Credit Union Specific

Credit Risk

Commercial Loan Grading – Seasoned professionals conduct this critical piece of work, not entry-level staff. FIMAC utilizes an institution’s loan grading system to verify that a proper grade has been assigned to all loans, or to assist with grading loans for the first time when a system is adopted. From $200 per hour.

Commercial Loan Grading System – One of the more critical areas of risk in a lending institution is the true understanding of credit risk to the capital of the organization. Key to this understanding is a loan grading scale that captures the essence of risk in the commercial loan portfolio. FIMAC is expert in the development, implementation, and updating of this critical system. Project cost or $250 per hour.

Loan File Review – A key component of bank risk management. The experts at FIMAC will conduct a full loan documentation and file organization review to guard against potential loss. Missing documentation will be noted per file and any overall file organization comments delivered to management. Truth in Lending and full regulatory compliance reviews can be included. $150 per hour.

Compliance Risk

Director Education – An outside director often has difficulty grasping the full scope of the regulatory and business environment of a financial institution. From regulatory issues, to basic banking practices, financial compliance, to liability issues and beyond, FIMAC is adept at providing the knowledge and information base required, enabling all directors to participate fully and add value to the organization. From $2,500 per day.

Policy/Procedure Review – FIMAC conducts a third-party review of staff adherence to all policies and procedures within the organization. The work can be completed as a review only or as a review with suggestions to further facilitate compliance by the staff with the bank policies/procedures reviewed. This review is a key to risk management as polices and procedures are of little value if they are not followed by all employees. $200 per hour.

Regulatory Response – When a financial institution becomes involved in a regulatory action it, like most other financial institutions, is uncertain as to how to respond to the action, and what is actually expected. The professionals at FIMAC have many years of very successful experience in assisting clients in their response to regulatory sanctions. A quick, concise, and strategic response is critical to the speedy resolution of these actions, otherwise they may continue for many years. The FIMAC team will assist the institution’s management in providing the necessary response with minimal disruption to the day-to-day business activities. From $250 per hour.

Deposit Risk – Few banks have the ability to a conduct scientific pricing methodology of their deposit pricing, deposit trends, and to properly segment their deposit base. Key to this is the ability to model depositor behavior patterns. Through the use of our proprietary Deposit Analytics model, FIMAC provides the consulting to guide clients through the maze of understanding true Price Optimization modeling. Don’t’ pay too much for the deposit balance you need. Model cost plus $20,000 per year minimum.

Internal Audit

ALM/IRR Audit– A comprehensive review of the IRR process, this audit considers the model(s) utilized, complexity of the balance sheet, data processing integration, workflow, checks & balances, policies and procedures, staffing, ALCO and other relevant areas. Recommendations for needed improvement in the risk management process will be made in our internal audit report. Given the current regulatory and management emphasis on the overall risk management process, this product should be of interest to all, and is of particular interest to those without internal audit departments or those internal audit departments unfamiliar with the requirements of ALM/IRR modeling. $7,500 minimum or $250/hour.

Interest Rate Risk and ALM

ALM/IRR Audit – A comprehensive review of the IRR process. This internal audit considers the model(s) utilized, complexity of the balance sheet, data processing integration, workflow, checks & balances, policies and procedures, staffing, ALCO and other relevant areas. Recommendations for needed improvement in the risk management process will be made. Given the current regulatory and management emphasis on the overall risk management process, this product should be of interest to all, and is of particular interest to those with internal audit departments or those internal audit departments unfamiliar with the requirements of ALM/IRR modeling. $7,500 minimum or $250 per hour.

ALM/IRR Risk Limit-Setting Assistance – Provides assistance relative to the initial implementation of IRR risk limits consistent with current regulatory requirements. This service is of particular value to institutions that have recently begun utilization of a net present value IRR model. It is a key to prudent risk management under FDICIA #305 and all agencies’ examination guidelines. $200 per hour.

ALM Model Set-Up Assistance – Generally a one to two day, on-site project designed to assist in proper set-up of a new ALM model or IRR model, or corrected set-up of an existing model. Proper set-up assistance will generally save the operator multiple days of set-up time and allowing for correct modeling. $1,750 per day plus $150 hour in office completion.

Non-Maturity Deposit Study – Is a comprehensive statistically based body of work that reveals depositor behavior patterns. The service is designed for the institution that wishes a solid empirical foundation on which to base its IRR process. These studies provide a statistically defensible estimate of the effective maturity (effective duration) of these deposits. Not only is the sensitivity of these deposits to interest rates studied, but the impact of other variables is also considered. The effective duration of such deposits can have a dramatic effect on NPV (also known as NEV) and the volatility of IRR and often results in a dramatically different risk profile than previously demonstrated. Longer duration liabilities allow for longer duration assets, which generally increase profitability. $12,500 minimum.

Policy Development – Often an institution’s policies and procedures become stale or require updating due to regulatory or accounting changes. FIMAC’s broad view of the industry ensures efficient creation of the proper platform for development, saving management untold investigative hours toward the creation or recreation of effective and useful policies. $1,500 per policy minimum.

Strategic IRR Review – Prepared four times a year, this review is a written evaluation of the client’s interest rate risk position. The Report is prepared based on the results of the client’s ALM/IRR model, strategic plan, defined risk limits, and other factors. It provides recommendations relative to actions that can be taken to manage IRR, as well as profitability action steps that may be taken. $1,000 per quarter minimum.

Subjective Assumption Determination – This most critical study addresses the subjective assumptions utilized in the production of any ALM/IRR model output. These assumptions have a critical impact on the answers derived from a model, and are the subject of most disagreements between institutions and regulators regarding IRR. Subjective Assumption determination requires a minimum of one day, on-site work with key personnel, including a session with senior management. $1,500 and up.

Liquidity Risk

Alternative Liquidity Sources – The FIMAC team can help an institution uncover untapped liquidity sources. These projects range from solving temporary liquidity needs, to providing viable longer-term solutions, from both on and off-balance sheet sources. Many times, creativity is the password. We can also include a Liquidity Contingency Policy as a part of our work. $200 per hour or project cost bid.

Liquidity Policy Development – Often an institution’s policies and procedures become stale or require updating due to regulatory or accounting changes.  FIMAC’s broad view of the industry saves management untold investigative hours toward the creation or recreation of effective and useful policies. $1,500.

Price Risk

Asset Holdings Analysis – Embedded options held by borrowers, ever changing economic conditions, varying spread relationships, and many other factors can dramatically change the market price of an asset. The analysis conducted by FIMAC can help identify the risk and opportunities that may cause potential changes in price beyond the liner values often assumed. This becomes especially important in an era of asset securitization and asset production sales. FIMAC’s work can uncover potential risk to earnings or capital due to price risk. $1,500 and up.

Regulatory Risk

Situational Assistance – The FIMAC team has in depth experience in assisting institution’s that are facing regulatory challenges. From specific engagements to actually managing troubled institutions, FIMAC knows what the regulators expect and how to provide the most qualified and expeditious response to their demands while maintaining the status quo of the institution and work to protect and enhance shareholder value. From issues as simple as interpreting communications from regulators, to conducting analytics, to negotiating agreeable approaches and everything in between, FIMAC can be of immense assistance. We can often help resolve and work through issues in far less time than can institutions working independently. Our bank consulting professionals know that time is money and the faster regulatory issues are resolved, the quicker management and staff may return to their focus of earning profits. .From $250 per hour.

Reputation Risk

Strategic Plans/Business Plans – Any banking organization must have a clear view of its future and its position within its market. FIMAC works with the Board, management, and staff to develop detailed bank Strategic Plans based on the institution’s strengths and market opportunities. These detailed plans are empirically developed and designed to create long-term shareholder value.  Project bid or $200 hour and up.

Shareholder Value

CompVal ReportSM
FIMAC and affiliate, FiCap® Strategic Partners, LLC, help to answer the difficult questions that confront midrange financial institutions today. Our innovative CompVal ReportSM enables institutions to capitalize on their specific and unique qualities, providing continuing assistance to management and directors as they implement the strategies they have adopted.
FIMAC begins by conducting a strategic assessment of an institution. A complete review of the current competitive situation and shareholder value is analyzed first. The assessment also includes:

Customer relationships, demographics, and market share
Product profitability and costs
Delivery systems
Valuation of non-maturity deposits
Balance sheet structure and its present value
Interest rate risk to income and equity
Unique history, characteristics, and risk profile of the institution

This analysis often uncovers unrealized value, leading to the development of strategies to unlock such value. The strategic assessment also offers a fresh look at the institution’s legal underpinnings. The review encompasses the institution’s charter documents, governance arrangements, relationships with key shareholders, existing anti-takeover defenses, and regulatory issues that must be addressed.
The findings are synthesized in the CompVal ReportSM. The Report presents an unbiased analysis of the institution’s strengths and weaknesses, as uncovered by thorough research and analysis. It describes tangible measures that can be taken to unlock the value hidden within the institution and increase shareholder value. Perhaps most importantly, the Report presents FIMAC’s assessment of the institution’s true present and prospective value. This enables management and directors to view merger and acquisition opportunities objectively, and to negotiate from a position of strength without outside interference. Contact Greg Doner for negotiated price.

Strategic Risk

Strategic Plans – Any organization must have a clear view of its future and its position within its market. FIMAC works with the Board, management, and staff to develop detailed plans based on the institution’s strengths and market opportunities. These detailed Strategic Plans are empirically developed and designed to create long-term shareholder value. Project bid or $200/ hour and up.

Facilitation of Plans – Some organizations prefer an outside meeting facilitator to conduct their Strategic Planning sessions. We have experience and qualified individuals to conduct facilitate these Strategic and Business Plan development sessions these sessions. $1,500 per day for pre-planning and planning session days.

Business Line Acquisition – FIMAC’s clients often wish to purchase non-banking financial services organizations to add to their customer service options. FIMAC is adept at valuing the worth of many of these types of businesses, and structuring the purchase format so that the acquisition is viable and increases the chance for success. Our clients have told us that this is one of the most valuable services they have utilized. From $250 per hour.

Organization Structure and Charting – Strategically, an organization may be on the ideal path, but unless the organization is properly structured, achievement of a proposed strategy may not be possible. Accountability must be built into every organizational structure. FIMAC assists boards and management in the development and creation of an organization structure that brings accountability to the staff, and share value to stockholders. Negotiated.

Credit Union Specific

Financial Institution Management Associates Corporation and our consultants possess over 34 years of varied credit union management experience that can be relied upon for nearly any project or need. From temporary management skills to collections guidance, we can help. We offer quality consulting services at a fair price.

Branch Planning & Development – The branch planning process is critical to a successful branch system. The expert consultants at FIMAC will assist in the development of a Branch Master Plan and in the individual branch planning process. We can manage branch projects from inception to completion including contract management with third parties and completion and submission of branch applications with the regulators.

Business and Strategic Planning – Expert facilitation goes a long way toward a successful planning session. Follow up assistance is available to assist the credit union in development/modification of financial management and policies to meet the goals and objectives within the adopted Strategic Plans. Planning session facilitation is one of our strengths.

Core Processor Selection & Negotiation – Combine this with our experience in vendor management and hit a home run. It is critical for a credit union to select the correct vendor and to conduct negotiations that provide a win for the credit union. Our consultants are expert in identifying the correct vendor and conducting contract negotiations. Bring in an expert for this most critical of all selections and negotiations.

Indirect Auto Lending Programs – These programs can be fraught with risk and should be designed with quality in mind. Quality loans – Quality dealers – Quality returns, increase your ROA, diversify loans risks, set up the credit union’s own niche in auto financing. Gain the knowledge to control your own program and have that safety of mind that many seek in this type of lending initiative.

Credit Union Mergers – Whether the successor or the merged, have the confidence to move ahead and become the credit union that potential merger partners seek out. FIMAC has the experience that counts for natural person credit unions. Use a growth method that can bring immediate reward to your CU members and the CU community.

Mortgage Lending – Develop a well managed program that brings profitability and Best Practices risk management to the bottom line. Learn the process of setting up the CU’s own mortgage origination program that will add dollars to the bottom line, keep the regulators pleased, assure quality and maintain delinquency control, diversify risk, and manage the targeted risk level.

Regulatory – FIMAC has years of experience in assisting with the aftermath of regulatory examinations and appropriate DOR responses. We have experience in LUA workouts and related internal work to accomplish release from an LUA in a timely manner. We provide the assistance necessary to keep the staff focused on serving members and minimizing the internal day-to-day impacts of such situations.

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