preparing for a rising rate environment · the 90s prepped our wild ride with the...
TRANSCRIPT
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Preparing for a Rising Rate Environment: The Landscape Transformed
October 2015
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 2
ContentsIntroduction .......................................................................................................................................................................................................................3
Section 1: A look back over 15 years
Timeline ............................................................................................................................................................................................................................ 5-8
Banking Landscape: 2000 - 2015 .................................................................................................................................................................................... 9-10
Economy Landscape: 2000 - 2015 .......................................................................................................................................................................................11
Section 2: The Landscape Transformed
1. Are you currently in the process of developing a strategy for a rising rate environment or in discussion to do so? Results – Total Respondents ................................................................................................................................................................................. 13 2. What is your process for developing a strategy or having discussions with different lines of business to determine the risk and possible opportunities? Results – Total Respondents ................................................................................................................................................................................. 14 3. What business lines are included in your discussions? Results – Total Respondents ................................................................................................................................................................................. 15 4. Is developing additional products one of your strategies? Results – Total Respondents ................................................................................................................................................................................. 16 5. If so, what kind of products are you developing? Results – Total Respondents ................................................................................................................................................................................. 16 6. Are you quantifying your deposit risk? Results – Total Respondents ................................................................................................................................................................................. 17 7. If so, what are you doing to quantify your risk? Results – Total Respondents ................................................................................................................................................................................. 17 8. Have you started any changes to pricing in anticipation of possible rising rates in 2015? Results – Total Respondents ................................................................................................................................................................................. 18 9. When do you anticipate to start developing a strategy or having discussions on the topic? Results – Total Respondents ................................................................................................................................................................................. 18 10. When rates do change, what will you do? Results – Total Respondents ..................................................................................................................................................................................19
Section 3: Demographics
Institution Type, Assets, Region ...........................................................................................................................................................................................21
Appendix ..................................................................................................................................................................................................................... 22-56
References ........................................................................................................................................................................................................................56
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 3
Introduction
An impending Fed Funds rate change has many in the banking industry in unfamiliar territory and others feeling rusty. This has the vast majority of bankers taking a closer look at planning and seriously thinking about how to strategize for rising rates. Strategies range from keeping tabs on the economy and market conditions (keeping the pulse of when and how the industry may change) to analyzing current and historical competitor data and “what if” scenarios (helping to understand how changes will play out) to making some changes now such as raising loan rates (getting ahead of increasing deposit rates and limiting margin loss).
The following report shows a review of major events effecting and shaping the banking industry over the last 15 years, displays how the banking landscape has been changing over the last 15 years, and provides input from bankers regarding what they are doing in the face of a new era. For banker feedback, survey questions were distributed via email to approximately 9,100 financial institutions across the United States between July 27, 2015 and August 18, 2015. 765 unique responses were received.
Rates are about to rise, but added to that is a level of consumer awareness never before seen. Media coverage 24-7 with a 360 view gives consumers information they never knew they might want to know. They are watching with hawk like eyes waiting, some with anticipation, others with fear, for that first FOMC announcement that rates are increasing, putting that much more pressure on bankers to create the perfect rising rate plan.
“The GreaT recession”
BANKRUPT
occUPY WaLL sT.
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 4
A LOOK BACK OVER 15 YEARS
SectiOn
1
March 2000The dot-com bubble bursts.
September 11, 2001Terrorist attacks are carried out in NYC and Washington D.C.
October 26, 2001The USA PATRIOT Act is signed into law by President George W. Bush.
December, 2001Eight US Banks have at least 1 million online users.
19 million US households are accessing bank accounts online.
June 30, 2002The Sarbanes-Oxley Act of 2002 is signed into law in reaction to major corporate and accounting scandals. (Enron, WorldCom, and Tyco International)
For the first time, electronic payments (automatic transactions, credit cards, and
debit cards) totaling $44.5 billion outnumber paper checks which total $36.7 billion.
December 4, 2003The Fair and Accurate Credit
Transactions Act of 2003 (FACT ACT) is signed into law by
President George W. Bush.
October 28, 2004The Check Clearing for the 21st Century Act of 2003 (Check 21)
takes effect.
Both J.P. Morgan Chase and Bank of America report more than $1 trillion of bank and non-bank assets.
Initial shocks early in the decade reversed course as the Mid 2000s was a period of growth and prosperity. Unemployment and inflation were at stable levels and the economy was gaining momentum. Consumers had buying power and they used it. Mortgage rates were at historic lows and financial institutions were issuing more loans than ever before. Average home prices in the United States more than doubled between 1998 and 2006, the sharpest increase recorded in US history2. Homeownership rates hit a record high of 69%3. The introduction of Apples’ iPhone in January 2007 started a shift from banking via personal computer to banking via smartphone. In March of 2007 the Dow Jones Industrial Average hit a record high making it the longest Bull Run in 80 years. Life was good…
The Federal Reserve changes Prime Rate 8 times.
January 31, 2006Alan Greenspan steps down after more than 18 years as chairman of the Federal Reserve and is succeeded by Ben Bernanke.
February 15, 2006The Federal Deposit Insurance Reform Act
of 2005 increases the coverage limit for retirement accounts to $250,000.
October 19, 2006The Dow Jones Industrial Average closes above 12,000 for the first time.
January 9, 2007The introduction of Apples’ iPhone starts a shift from banking via personal computer to banking via smartphone.
March, 2007The Monthly House Price
Indexes for Census Divisions and U.S. peak at 226.96.
May 4, 2007The Dow Jones Industrial Average hits another record high, making this the longest bull run in 80 years.
The last fifteen years in the banking industry proved to be a roller coaster ride. With new innovations and extreme highs to crushing blows, the industry is now demonstrating its ultimate strength and commitment to rebuilding.
The 90s prepped our wild ride with the Gramm-Leach-Bliley Act1 permitting further consolidation in financial services. Commercial and investment banking subsidiaries were now allowed to be owned by umbrella Financial Holding Companies. Some experts say this may have played a role in the financial crisis of 2007 and 2008. Others say the new rules allowed buyouts to occur rather than bankruptcies.
By the mid to late 90s we were introduced to a new style of banking. Internet Banks operated completely online with no physical brick and mortar location to serve their clients. With this new threat, typical financial institutions now had to compete against institutions with little or no overhead.
After the world survived the Y2K scare, ecommerce and the Internet were booming. But by March of 2000 the leaders separated from those that jumped on the dot-com bandwagon. Then September of 2001 brought a sense of insecurity never experienced by most Americans on their soil. Our homeland was under attack. The USA Patriot Act created new investigative tools and ways to deter terrorist acts. While important, this new regulation caused headaches for Compliance and BSA Officers at financial institutions. An overhaul to account opening procedures and regular FinCEN list reviews were now required carrying steep penalties for noncompliance.
December, 2007The US economy
enters
BANKRUPT
March 16, 2008Bear Stearns is acquired
by JPMorganChase.
September 15, 2008Lehman Brothers files the largest
bankruptcy in U.S. history.
September 17, 2008The Federal Reserve loans $85 billion to
American International Group (AIG).
October 3, 2008The Troubled Asset Relief Program
(TARP) is signed into law.
October 11, 2008The Dow Jones Industrial Average caps its worst week with its highest volatility day ever recorded in its 112 year history.
December, 2008Quantitative easing begins.
December 19, 2008The U.S. auto industry bailout is approved.
March 2, 2009The Dow Jones Industrial
Average drops below 7000 for the first time since 1997.
December, 2009The Move Your Money Campaign launches in an effort to move money out of big banks and invest into small community banks.
July 21, 2010Insurance coverage for deposits is permanently raised to $250,000.
September 17, 2011
October 1, 2011The Dodd–Frank Wall Street Reform and Consumer Protection Act goes into effect.
November 5, 2011Bank Transfer Day, a consumer activism initiative, calls for a voluntary switch from commercial banks to not-for-profit credit unions.
March, 2012Credit Unions hit 1
Trillion in Total Assets.
October 11, 2012The nation’s foreclosures fall to a 5-year low.
July 11, 2013The Dow Jones Industrial Average and S&P 500 close at record highs of 15,460 and 1,675, respectively, with the NASDAQ hitting 3,578, its highest level in ten years.
October 1, 2013The Federal government shuts down for 16 days.
February 1, 2014Janet Yellen takes over as chairman of the Federal Reserve.
August 26, 2014The S&P 500 closes above 2,000 for the first time.
October, 2014Quantitative easing ends.
January 6, 2015WTI crude oil price falls to $48.46 a barrel, the first time it has been
below $50 since April 2009.
March 2, 2015The NASDAQ closes above 5,000
for first time since 2000.
September 17, 2015Amid much anticipation,
The Federal Open Market Committee (FOMC) decides not to increase the Federal
Funds Rate. Will they change in 2015?
The last two years have been a waiting game as the economy continues to improve slowly and the Federal Reserve has held the Fed Funds rate at near zero. It is not a question of if rates will move, but when. As of the most recent FOMC meeting September 17, 2015, committee members are still confident an increase will happen in 2015.
Financial institutions now had until October 1, 2011 to comply with the new regulations set forth in Dodd-Frank. This caused more than headaches, but near nightmares, for compliance departments. For those institutions not lucky enough to have an entire department to take on the burden, most had to hire additional staff. The reduction of interchange fee income, a result of the Durbin Amendment, was an additional damaging factor.
Things started looking up in 2012. Credit Unions hit $1 Trillion in Total Assets and by October the nation’s foreclosures fell to a 5-year low. Mortgage rates hit new all-time lows and the refinance market was growing. The stock market continued to rally, posting record highs.
And then it all came crashing down… In December of 2007 the US economy officially entered “the Great Recession”.
The chips begin to fall; teaser periods on mortgages came to an end, home values dropped, and mortgage defaults on subprime loans skyrocketed.
The financial sector started feeling the pinch with JP Morgan Chase acquiring Bear Stearns in March of 2008, followed by the Lehman Brothers bankruptcy and the American International Group (AIG) $85 billion bailout in September. On October 3, 2008 President George W. Bush signed into law the Trouble Asset Relief Program (TARP).
As Americans felt things couldn’t get any worse, they did… on March 2, 2009 the Dow Jones Industrial Average fell below the 7,000 level for the first time since 19974. A sense of panic set in as unemployment
continued to rise to a record high of 10%5 and inflation hit negative numbers. The Federal Reserve scrambled and infused an unparalleled amount of monetary assistance to ensure economic recovery. By the end of 2009 the light could be seen at the end of the tunnel. Growth was slow, but things were moving in the right direction. As the dust began to settle, all eyes turned to how to prevent this from happening again. Financial reform was in the spotlight again on July 21, 2010 when President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The goal of Dodd-Frank was to improve accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.
1 http://www.federalreservehistory.org/Events/DetailView/532 http://www.federalreservehistory.org/Events/DetailView/663 http://www.census.gov/housing/hvs/data/q215ind.html 4 http://www.bloomberg.com/bw/stories/2009-03-02/stocks-plunge-with-dow-falling-below- 7-000businessweek-business-news-stock-market-and-financial-advice5 http://www.usinflationcalculator.com/inflation/current-inflation-rates/
ends June, 2009
March 2000The dot-com bubble bursts.
September 11, 2001Terrorist attacks are carried out in NYC and Washington D.C.
October 26, 2001The USA PATRIOT Act is signed into law by President George W. Bush.
December, 2001Eight US Banks have at least 1 million online users.
19 million US households are accessing bank accounts online.
June 30, 2002The Sarbanes-Oxley Act of 2002 is signed into law in reaction to major corporate and accounting scandals. (Enron, WorldCom, and Tyco International)
For the first time, electronic payments (automatic transactions, credit cards, and
debit cards) totaling $44.5 billion outnumber paper checks which total $36.7 billion.
December 4, 2003The Fair and Accurate Credit
Transactions Act of 2003 (FACT ACT) is signed into law by
President George W. Bush.
October 28, 2004The Check Clearing for the 21st Century Act of 2003 (Check 21)
takes effect.
Both J.P. Morgan Chase and Bank of America report more than $1 trillion of bank and non-bank assets.
Initial shocks early in the decade reversed course as the Mid 2000s was a period of growth and prosperity. Unemployment and inflation were at stable levels and the economy was gaining momentum. Consumers had buying power and they used it. Mortgage rates were at historic lows and financial institutions were issuing more loans than ever before. Average home prices in the United States more than doubled between 1998 and 2006, the sharpest increase recorded in US history2. Homeownership rates hit a record high of 69%3. The introduction of Apples’ iPhone in January 2007 started a shift from banking via personal computer to banking via smartphone. In March of 2007 the Dow Jones Industrial Average hit a record high making it the longest Bull Run in 80 years. Life was good…
The Federal Reserve changes Prime Rate 8 times.
January 31, 2006Alan Greenspan steps down after more than 18 years as chairman of the Federal Reserve and is succeeded by Ben Bernanke.
February 15, 2006The Federal Deposit Insurance Reform Act
of 2005 increases the coverage limit for retirement accounts to $250,000.
October 19, 2006The Dow Jones Industrial Average closes above 12,000 for the first time.
January 9, 2007The introduction of Apples’ iPhone starts a shift from banking via personal computer to banking via smartphone.
March, 2007The Monthly House Price
Indexes for Census Divisions and U.S. peak at 226.96.
May 4, 2007The Dow Jones Industrial Average hits another record high, making this the longest bull run in 80 years.
The last fifteen years in the banking industry proved to be a roller coaster ride. With new innovations and extreme highs to crushing blows, the industry is now demonstrating its ultimate strength and commitment to rebuilding.
The 90s prepped our wild ride with the Gramm-Leach-Bliley Act1 permitting further consolidation in financial services. Commercial and investment banking subsidiaries were now allowed to be owned by umbrella Financial Holding Companies. Some experts say this may have played a role in the financial crisis of 2007 and 2008. Others say the new rules allowed buyouts to occur rather than bankruptcies.
By the mid to late 90s we were introduced to a new style of banking. Internet Banks operated completely online with no physical brick and mortar location to serve their clients. With this new threat, typical financial institutions now had to compete against institutions with little or no overhead.
After the world survived the Y2K scare, ecommerce and the Internet were booming. But by March of 2000 the leaders separated from those that jumped on the dot-com bandwagon. Then September of 2001 brought a sense of insecurity never experienced by most Americans on their soil. Our homeland was under attack. The USA Patriot Act created new investigative tools and ways to deter terrorist acts. While important, this new regulation caused headaches for Compliance and BSA Officers at financial institutions. An overhaul to account opening procedures and regular FinCEN list reviews were now required carrying steep penalties for noncompliance.
December, 2007The US economy
enters
BANKRUPT
March 16, 2008Bear Stearns is acquired
by JPMorganChase.
September 15, 2008Lehman Brothers files the largest
bankruptcy in U.S. history.
September 17, 2008The Federal Reserve loans $85 billion to
American International Group (AIG).
October 3, 2008The Troubled Asset Relief Program
(TARP) is signed into law.
October 11, 2008The Dow Jones Industrial Average caps its worst week with its highest volatility day ever recorded in its 112 year history.
December, 2008Quantitative easing begins.
December 19, 2008The U.S. auto industry bailout is approved.
March 2, 2009The Dow Jones Industrial
Average drops below 7000 for the first time since 1997.
December, 2009The Move Your Money Campaign launches in an effort to move money out of big banks and invest into small community banks.
July 21, 2010Insurance coverage for deposits is permanently raised to $250,000.
September 17, 2011
October 1, 2011The Dodd–Frank Wall Street Reform and Consumer Protection Act goes into effect.
November 5, 2011Bank Transfer Day, a consumer activism initiative, calls for a voluntary switch from commercial banks to not-for-profit credit unions.
March, 2012Credit Unions hit 1
Trillion in Total Assets.
October 11, 2012The nation’s foreclosures fall to a 5-year low.
July 11, 2013The Dow Jones Industrial Average and S&P 500 close at record highs of 15,460 and 1,675, respectively, with the NASDAQ hitting 3,578, its highest level in ten years.
October 1, 2013The Federal government shuts down for 16 days.
February 1, 2014Janet Yellen takes over as chairman of the Federal Reserve.
August 26, 2014The S&P 500 closes above 2,000 for the first time.
October, 2014Quantitative easing ends.
January 6, 2015WTI crude oil price falls to $48.46 a barrel, the first time it has been
below $50 since April 2009.
March 2, 2015The NASDAQ closes above 5,000
for first time since 2000.
September 17, 2015Amid much anticipation,
The Federal Open Market Committee (FOMC) decides not to increase the Federal
Funds Rate. Will they change in 2015?
The last two years have been a waiting game as the economy continues to improve slowly and the Federal Reserve has held the Fed Funds rate at near zero. It is not a question of if rates will move, but when. As of the most recent FOMC meeting September 17, 2015, committee members are still confident an increase will happen in 2015.
Financial institutions now had until October 1, 2011 to comply with the new regulations set forth in Dodd-Frank. This caused more than headaches, but near nightmares, for compliance departments. For those institutions not lucky enough to have an entire department to take on the burden, most had to hire additional staff. The reduction of interchange fee income, a result of the Durbin Amendment, was an additional damaging factor.
Things started looking up in 2012. Credit Unions hit $1 Trillion in Total Assets and by October the nation’s foreclosures fell to a 5-year low. Mortgage rates hit new all-time lows and the refinance market was growing. The stock market continued to rally, posting record highs.
And then it all came crashing down… In December of 2007 the US economy officially entered “the Great Recession”.
The chips begin to fall; teaser periods on mortgages came to an end, home values dropped, and mortgage defaults on subprime loans skyrocketed.
The financial sector started feeling the pinch with JP Morgan Chase acquiring Bear Stearns in March of 2008, followed by the Lehman Brothers bankruptcy and the American International Group (AIG) $85 billion bailout in September. On October 3, 2008 President George W. Bush signed into law the Trouble Asset Relief Program (TARP).
As Americans felt things couldn’t get any worse, they did… on March 2, 2009 the Dow Jones Industrial Average fell below the 7,000 level for the first time since 19974. A sense of panic set in as unemployment
continued to rise to a record high of 10%5 and inflation hit negative numbers. The Federal Reserve scrambled and infused an unparalleled amount of monetary assistance to ensure economic recovery. By the end of 2009 the light could be seen at the end of the tunnel. Growth was slow, but things were moving in the right direction. As the dust began to settle, all eyes turned to how to prevent this from happening again. Financial reform was in the spotlight again on July 21, 2010 when President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The goal of Dodd-Frank was to improve accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.
1 http://www.federalreservehistory.org/Events/DetailView/532 http://www.federalreservehistory.org/Events/DetailView/663 http://www.census.gov/housing/hvs/data/q215ind.html 4 http://www.bloomberg.com/bw/stories/2009-03-02/stocks-plunge-with-dow-falling-below- 7-000businessweek-business-news-stock-market-and-financial-advice5 http://www.usinflationcalculator.com/inflation/current-inflation-rates/
ends June, 2009
March 2000The dot-com bubble bursts.
September 11, 2001Terrorist attacks are carried out in NYC and Washington D.C.
October 26, 2001The USA PATRIOT Act is signed into law by President George W. Bush.
December, 2001Eight US Banks have at least 1 million online users.
19 million US households are accessing bank accounts online.
June 30, 2002The Sarbanes-Oxley Act of 2002 is signed into law in reaction to major corporate and accounting scandals. (Enron, WorldCom, and Tyco International)
For the first time, electronic payments (automatic transactions, credit cards, and
debit cards) totaling $44.5 billion outnumber paper checks which total $36.7 billion.
December 4, 2003The Fair and Accurate Credit
Transactions Act of 2003 (FACT ACT) is signed into law by
President George W. Bush.
October 28, 2004The Check Clearing for the 21st Century Act of 2003 (Check 21)
takes effect.
Both J.P. Morgan Chase and Bank of America report more than $1 trillion of bank and non-bank assets.
Initial shocks early in the decade reversed course as the Mid 2000s was a period of growth and prosperity. Unemployment and inflation were at stable levels and the economy was gaining momentum. Consumers had buying power and they used it. Mortgage rates were at historic lows and financial institutions were issuing more loans than ever before. Average home prices in the United States more than doubled between 1998 and 2006, the sharpest increase recorded in US history2. Homeownership rates hit a record high of 69%3. The introduction of Apples’ iPhone in January 2007 started a shift from banking via personal computer to banking via smartphone. In March of 2007 the Dow Jones Industrial Average hit a record high making it the longest Bull Run in 80 years. Life was good…
The Federal Reserve changes Prime Rate 8 times.
January 31, 2006Alan Greenspan steps down after more than 18 years as chairman of the Federal Reserve and is succeeded by Ben Bernanke.
February 15, 2006The Federal Deposit Insurance Reform Act
of 2005 increases the coverage limit for retirement accounts to $250,000.
October 19, 2006The Dow Jones Industrial Average closes above 12,000 for the first time.
January 9, 2007The introduction of Apples’ iPhone starts a shift from banking via personal computer to banking via smartphone.
March, 2007The Monthly House Price
Indexes for Census Divisions and U.S. peak at 226.96.
May 4, 2007The Dow Jones Industrial Average hits another record high, making this the longest bull run in 80 years.
The last fifteen years in the banking industry proved to be a roller coaster ride. With new innovations and extreme highs to crushing blows, the industry is now demonstrating its ultimate strength and commitment to rebuilding.
The 90s prepped our wild ride with the Gramm-Leach-Bliley Act1 permitting further consolidation in financial services. Commercial and investment banking subsidiaries were now allowed to be owned by umbrella Financial Holding Companies. Some experts say this may have played a role in the financial crisis of 2007 and 2008. Others say the new rules allowed buyouts to occur rather than bankruptcies.
By the mid to late 90s we were introduced to a new style of banking. Internet Banks operated completely online with no physical brick and mortar location to serve their clients. With this new threat, typical financial institutions now had to compete against institutions with little or no overhead.
After the world survived the Y2K scare, ecommerce and the Internet were booming. But by March of 2000 the leaders separated from those that jumped on the dot-com bandwagon. Then September of 2001 brought a sense of insecurity never experienced by most Americans on their soil. Our homeland was under attack. The USA Patriot Act created new investigative tools and ways to deter terrorist acts. While important, this new regulation caused headaches for Compliance and BSA Officers at financial institutions. An overhaul to account opening procedures and regular FinCEN list reviews were now required carrying steep penalties for noncompliance.
December, 2007The US economy
enters
BANKRUPT
March 16, 2008Bear Stearns is acquired
by JPMorganChase.
September 15, 2008Lehman Brothers files the largest
bankruptcy in U.S. history.
September 17, 2008The Federal Reserve loans $85 billion to
American International Group (AIG).
October 3, 2008The Troubled Asset Relief Program
(TARP) is signed into law.
October 11, 2008The Dow Jones Industrial Average caps its worst week with its highest volatility day ever recorded in its 112 year history.
December, 2008Quantitative easing begins.
December 19, 2008The U.S. auto industry bailout is approved.
March 2, 2009The Dow Jones Industrial
Average drops below 7000 for the first time since 1997.
December, 2009The Move Your Money Campaign launches in an effort to move money out of big banks and invest into small community banks.
July 21, 2010Insurance coverage for deposits is permanently raised to $250,000.
September 17, 2011
October 1, 2011The Dodd–Frank Wall Street Reform and Consumer Protection Act goes into effect.
November 5, 2011Bank Transfer Day, a consumer activism initiative, calls for a voluntary switch from commercial banks to not-for-profit credit unions.
March, 2012Credit Unions hit 1
Trillion in Total Assets.
October 11, 2012The nation’s foreclosures fall to a 5-year low.
July 11, 2013The Dow Jones Industrial Average and S&P 500 close at record highs of 15,460 and 1,675, respectively, with the NASDAQ hitting 3,578, its highest level in ten years.
October 1, 2013The Federal government shuts down for 16 days.
February 1, 2014Janet Yellen takes over as chairman of the Federal Reserve.
August 26, 2014The S&P 500 closes above 2,000 for the first time.
October, 2014Quantitative easing ends.
January 6, 2015WTI crude oil price falls to $48.46 a barrel, the first time it has been
below $50 since April 2009.
March 2, 2015The NASDAQ closes above 5,000
for first time since 2000.
September 17, 2015Amid much anticipation,
The Federal Open Market Committee (FOMC) decides not to increase the Federal
Funds Rate. Will they change in 2015?
The last two years have been a waiting game as the economy continues to improve slowly and the Federal Reserve has held the Fed Funds rate at near zero. It is not a question of if rates will move, but when. As of the most recent FOMC meeting September 17, 2015, committee members are still confident an increase will happen in 2015.
Financial institutions now had until October 1, 2011 to comply with the new regulations set forth in Dodd-Frank. This caused more than headaches, but near nightmares, for compliance departments. For those institutions not lucky enough to have an entire department to take on the burden, most had to hire additional staff. The reduction of interchange fee income, a result of the Durbin Amendment, was an additional damaging factor.
Things started looking up in 2012. Credit Unions hit $1 Trillion in Total Assets and by October the nation’s foreclosures fell to a 5-year low. Mortgage rates hit new all-time lows and the refinance market was growing. The stock market continued to rally, posting record highs.
And then it all came crashing down… In December of 2007 the US economy officially entered “the Great Recession”.
The chips begin to fall; teaser periods on mortgages came to an end, home values dropped, and mortgage defaults on subprime loans skyrocketed.
The financial sector started feeling the pinch with JP Morgan Chase acquiring Bear Stearns in March of 2008, followed by the Lehman Brothers bankruptcy and the American International Group (AIG) $85 billion bailout in September. On October 3, 2008 President George W. Bush signed into law the Trouble Asset Relief Program (TARP).
As Americans felt things couldn’t get any worse, they did… on March 2, 2009 the Dow Jones Industrial Average fell below the 7,000 level for the first time since 19974. A sense of panic set in as unemployment
continued to rise to a record high of 10%5 and inflation hit negative numbers. The Federal Reserve scrambled and infused an unparalleled amount of monetary assistance to ensure economic recovery. By the end of 2009 the light could be seen at the end of the tunnel. Growth was slow, but things were moving in the right direction. As the dust began to settle, all eyes turned to how to prevent this from happening again. Financial reform was in the spotlight again on July 21, 2010 when President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The goal of Dodd-Frank was to improve accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.
1 http://www.federalreservehistory.org/Events/DetailView/532 http://www.federalreservehistory.org/Events/DetailView/663 http://www.census.gov/housing/hvs/data/q215ind.html 4 http://www.bloomberg.com/bw/stories/2009-03-02/stocks-plunge-with-dow-falling-below- 7-000businessweek-business-news-stock-market-and-financial-advice5 http://www.usinflationcalculator.com/inflation/current-inflation-rates/
ends June, 2009
March 2000The dot-com bubble bursts.
September 11, 2001Terrorist attacks are carried out in NYC and Washington D.C.
October 26, 2001The USA PATRIOT Act is signed into law by President George W. Bush.
December, 2001Eight US Banks have at least 1 million online users.
19 million US households are accessing bank accounts online.
June 30, 2002The Sarbanes-Oxley Act of 2002 is signed into law in reaction to major corporate and accounting scandals. (Enron, WorldCom, and Tyco International)
For the first time, electronic payments (automatic transactions, credit cards, and
debit cards) totaling $44.5 billion outnumber paper checks which total $36.7 billion.
December 4, 2003The Fair and Accurate Credit
Transactions Act of 2003 (FACT ACT) is signed into law by
President George W. Bush.
October 28, 2004The Check Clearing for the 21st Century Act of 2003 (Check 21)
takes effect.
Both J.P. Morgan Chase and Bank of America report more than $1 trillion of bank and non-bank assets.
Initial shocks early in the decade reversed course as the Mid 2000s was a period of growth and prosperity. Unemployment and inflation were at stable levels and the economy was gaining momentum. Consumers had buying power and they used it. Mortgage rates were at historic lows and financial institutions were issuing more loans than ever before. Average home prices in the United States more than doubled between 1998 and 2006, the sharpest increase recorded in US history2. Homeownership rates hit a record high of 69%3. The introduction of Apples’ iPhone in January 2007 started a shift from banking via personal computer to banking via smartphone. In March of 2007 the Dow Jones Industrial Average hit a record high making it the longest Bull Run in 80 years. Life was good…
The Federal Reserve changes Prime Rate 8 times.
January 31, 2006Alan Greenspan steps down after more than 18 years as chairman of the Federal Reserve and is succeeded by Ben Bernanke.
February 15, 2006The Federal Deposit Insurance Reform Act
of 2005 increases the coverage limit for retirement accounts to $250,000.
October 19, 2006The Dow Jones Industrial Average closes above 12,000 for the first time.
January 9, 2007The introduction of Apples’ iPhone starts a shift from banking via personal computer to banking via smartphone.
March, 2007The Monthly House Price
Indexes for Census Divisions and U.S. peak at 226.96.
May 4, 2007The Dow Jones Industrial Average hits another record high, making this the longest bull run in 80 years.
The last fifteen years in the banking industry proved to be a roller coaster ride. With new innovations and extreme highs to crushing blows, the industry is now demonstrating its ultimate strength and commitment to rebuilding.
The 90s prepped our wild ride with the Gramm-Leach-Bliley Act1 permitting further consolidation in financial services. Commercial and investment banking subsidiaries were now allowed to be owned by umbrella Financial Holding Companies. Some experts say this may have played a role in the financial crisis of 2007 and 2008. Others say the new rules allowed buyouts to occur rather than bankruptcies.
By the mid to late 90s we were introduced to a new style of banking. Internet Banks operated completely online with no physical brick and mortar location to serve their clients. With this new threat, typical financial institutions now had to compete against institutions with little or no overhead.
After the world survived the Y2K scare, ecommerce and the Internet were booming. But by March of 2000 the leaders separated from those that jumped on the dot-com bandwagon. Then September of 2001 brought a sense of insecurity never experienced by most Americans on their soil. Our homeland was under attack. The USA Patriot Act created new investigative tools and ways to deter terrorist acts. While important, this new regulation caused headaches for Compliance and BSA Officers at financial institutions. An overhaul to account opening procedures and regular FinCEN list reviews were now required carrying steep penalties for noncompliance.
December, 2007The US economy
enters
BANKRUPT
March 16, 2008Bear Stearns is acquired
by JPMorganChase.
September 15, 2008Lehman Brothers files the largest
bankruptcy in U.S. history.
September 17, 2008The Federal Reserve loans $85 billion to
American International Group (AIG).
October 3, 2008The Troubled Asset Relief Program
(TARP) is signed into law.
October 11, 2008The Dow Jones Industrial Average caps its worst week with its highest volatility day ever recorded in its 112 year history.
December, 2008Quantitative easing begins.
December 19, 2008The U.S. auto industry bailout is approved.
March 2, 2009The Dow Jones Industrial
Average drops below 7000 for the first time since 1997.
December, 2009The Move Your Money Campaign launches in an effort to move money out of big banks and invest into small community banks.
July 21, 2010Insurance coverage for deposits is permanently raised to $250,000.
September 17, 2011
October 1, 2011The Dodd–Frank Wall Street Reform and Consumer Protection Act goes into effect.
November 5, 2011Bank Transfer Day, a consumer activism initiative, calls for a voluntary switch from commercial banks to not-for-profit credit unions.
March, 2012Credit Unions hit 1
Trillion in Total Assets.
October 11, 2012The nation’s foreclosures fall to a 5-year low.
July 11, 2013The Dow Jones Industrial Average and S&P 500 close at record highs of 15,460 and 1,675, respectively, with the NASDAQ hitting 3,578, its highest level in ten years.
October 1, 2013The Federal government shuts down for 16 days.
February 1, 2014Janet Yellen takes over as chairman of the Federal Reserve.
August 26, 2014The S&P 500 closes above 2,000 for the first time.
October, 2014Quantitative easing ends.
January 6, 2015WTI crude oil price falls to $48.46 a barrel, the first time it has been
below $50 since April 2009.
March 2, 2015The NASDAQ closes above 5,000
for first time since 2000.
September 17, 2015Amid much anticipation,
The Federal Open Market Committee (FOMC) decides not to increase the Federal
Funds Rate. Will they change in 2015?
The last two years have been a waiting game as the economy continues to improve slowly and the Federal Reserve has held the Fed Funds rate at near zero. It is not a question of if rates will move, but when. As of the most recent FOMC meeting September 17, 2015, committee members are still confident an increase will happen in 2015.
Financial institutions now had until October 1, 2011 to comply with the new regulations set forth in Dodd-Frank. This caused more than headaches, but near nightmares, for compliance departments. For those institutions not lucky enough to have an entire department to take on the burden, most had to hire additional staff. The reduction of interchange fee income, a result of the Durbin Amendment, was an additional damaging factor.
Things started looking up in 2012. Credit Unions hit $1 Trillion in Total Assets and by October the nation’s foreclosures fell to a 5-year low. Mortgage rates hit new all-time lows and the refinance market was growing. The stock market continued to rally, posting record highs.
And then it all came crashing down… In December of 2007 the US economy officially entered “the Great Recession”.
The chips begin to fall; teaser periods on mortgages came to an end, home values dropped, and mortgage defaults on subprime loans skyrocketed.
The financial sector started feeling the pinch with JP Morgan Chase acquiring Bear Stearns in March of 2008, followed by the Lehman Brothers bankruptcy and the American International Group (AIG) $85 billion bailout in September. On October 3, 2008 President George W. Bush signed into law the Trouble Asset Relief Program (TARP).
As Americans felt things couldn’t get any worse, they did… on March 2, 2009 the Dow Jones Industrial Average fell below the 7,000 level for the first time since 19974. A sense of panic set in as unemployment
continued to rise to a record high of 10%5 and inflation hit negative numbers. The Federal Reserve scrambled and infused an unparalleled amount of monetary assistance to ensure economic recovery. By the end of 2009 the light could be seen at the end of the tunnel. Growth was slow, but things were moving in the right direction. As the dust began to settle, all eyes turned to how to prevent this from happening again. Financial reform was in the spotlight again on July 21, 2010 when President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The goal of Dodd-Frank was to improve accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.
1 http://www.federalreservehistory.org/Events/DetailView/532 http://www.federalreservehistory.org/Events/DetailView/663 http://www.census.gov/housing/hvs/data/q215ind.html 4 http://www.bloomberg.com/bw/stories/2009-03-02/stocks-plunge-with-dow-falling-below- 7-000businessweek-business-news-stock-market-and-financial-advice5 http://www.usinflationcalculator.com/inflation/current-inflation-rates/
ends June, 2009
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 9Section 1: A Look Back Over 15 Years
2002
2011
2012
2013
2008
2007
2000
June 2
015
2014
2001
2010
2004
2003
2006
2009
2005
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
# of Institutions
Banks Credit Unions
2002
2011
2012
2013
2008
2007
2000
2015
2014
2001
2010
2004
2003
2006
2009
2005
255240225210195180165150135120105
907560453015
0
Banks
# of New Banks # of Failed Banks20
02
2011
2012
2013
2008
2007
2000
2015
2014
2001
2010
2004
2003
2006
2009
2005
3028262422201816141210
86420
Credit Unions
# of Federal Charters Issued # of Involuntary Liquidations20
02
2011
2012
2013
2008
2007
2000
2014
2001
2010
2004
2003
2006
2009
2005
550525500475450425400375350325300275250225200175150125100
755025
0
Mergers
Banks Credit Unions
Banking Landscape: 2000-2015
Closures overtake openings
Closures overtake openings
# of banks out paces # of credit unions
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 10Section 1: A Look Back Over 15 Years
2002
2011
2012
2013
2008
2007
2000
2015
2014
2001
2010
2004
2003
2006
2009
2005
10.09.59.08.58.07.57.06.56.05.55.04.54.03.53.02.52.01.51.00.5
0
Year
ly Av
erag
e Rat
e
Deposit Products and Fed Funds
12 Month CD @ 10K 60 Month CD @ 10K Fed Funds20
02
2011
2012
2013
2008
2007
2000
2015
2014
2001
2010
2004
2003
2006
2009
2005
10.09.59.08.58.07.57.06.56.05.55.04.54.03.53.02.52.01.51.00.5
0
Year
ly Av
erag
e Rat
e
Loan Product
30 Year Fixed Mortgage
121110
9876543210
Prime Rate
2-3-
2000
3-22
-200
05-
17-2
000
1-4-
2001
2-1-
2001
3-21
-200
14-
19-2
001
5-16
-200
16-
28-2
001
8-33
-200
19-
18-2
001
10-3
-200
111
-7-2
001
12-1
2-20
0111
-7-2
002
6-27
-200
37-
1-20
048-
11-2
004
9-21
-200
411
-10-
2004
12-1
4-20
042-
2-20
053-
22-2
005
5-3-
2005
6-30
-200
58-
9-20
059-
20-2
005
11-1
-200
512
-13-
2005
1-31
-200
63-
28-2
006
5-10
-200
66-
29-2
006
9-18
-200
710
-31-
2007
12-1
1-20
071-
22-2
008
1-30
-200
83-
18-2
008
4-30
-200
810
-8-2
008
10-2
9-20
0812
-16-
2008
2009
2010
2011
2012
2013
2014
9-17
-201
4
2002
2011
2012
2013
2008
2007
2000
2015
2014
2001
2010
2004
2003
2006
2009
2005
121110
9876543210
# of Prime Rate Changes
Banking Landscape: 2000-2015
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 11Section 1: A Look Back Over 15 Years
Unemployment vs. Inflation
2002
2011
2012
2013
20082007
2000
20142001
2010
2004
2003
2006
2009
2005
2,2502,1001,9501,8001,6501,5001,3501,2001,050
900750600450300150
0
S&P 500
2002
2011
2012
2013
20082007
2000
20142001
2010
2004
2003
2006
2009
2005
21,00019,50018,00016,50015,00013,50012,00010,500
9,0007,5006,0004,5003,0001,500
0
DOW Jones
2002
2011
2012
20132008
2007
2000
Augu
st, 20
15
20142001
2010
2004
2003
2006
2009
2005
6,0005,5005,0004,5004,0003,5003,0002,5002,0001,5001,000
5000
NASDAQ
Economy Landscape: 2000-2015
Augu
st, 20
15
Augu
st, 20
15
121110
9876543210
-1-2-3
Perc
enta
ges
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Unemployment Inflation
October, 2009 (10.0)Highest unemployment rate since 1983
July, 2009 (-2.1)Lowest inflation rate since 1950
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 12
THE LANDSCAPE TRANSFORMED
SectiOn
2
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 13Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 1: Are you currently in the process of developing a strategy for a rising rate environment or in discussion to do so?
TotalRespondents
(83.92%)Respondents said "Yes"
(16.08%)Respondents said "No"
765 bankers responded to the emailed survey
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 14Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 2: What is your process for developing a strategy or having discussions with different lines of business to determine the risk and possible opportunities?
Modeli
ng/"W
hat if
" scen
arios
(15.9
6%)
Reach
ing ou
t to cli
ents
(2.58
%)Liq
uidity
(2.35
%)Ra
ising l
oan r
ates (
2.35%
)Fe
e opp
ortun
ities/E
arly C
D With
draw (1
.41%)
Deve
loping
new pr
oduc
ts (4.
23%)
Short
term
varia
ble ra
te loa
n prod
ucts
(4.46
%)
Regu
lar In
terna
l Mee
tings
(32.3
9%)
Revie
w histo
rical
rate d
ata (1
.64%)
Long
-term
CD Sp
ecials
(2.11
%)Lim
it the
amou
nt of
fixed
rate
loans
(0.94
%)
ALCO
(22.3
0%)
Short
matu
rities
on in
vestm
ents (
2.82%
)
Monito
ring T
reasu
ry Ra
tes an
d Fed
Fund
s (0.4
7%)
Revie
wing Ra
te Se
nsitiv
e Prod
ucts
(7.75
%)
ALM An
alysis
/ALM
Prov
ider (1
1.50%
)
Broke
red CD
s (0.7
0%)
IRR Re
ports
(4.69
%)Ke
eping
an ey
e on l
ocal
and g
lobal
econo
my/mark
et
cond
itions
on a
local,
natio
nal a
nd in
terna
tiona
l leve
l (3.29
%)
Analy
zing r
ates a
nd tie
rs of
our p
roduc
ts
and o
ur co
mpetit
ors (7
.04%)
34%32%30%28%26%24%22%20%18%16%14%12%10%
8%6%4%2%0%
Resp
onse
Perc
enta
ge
Weighte
d Ave
rage L
ife an
d Net
Econo
mic Valu
e (0.4
7%)
N/A (
2.11%
)
*This question was asked as an open ended question. Responses were categorized as displayed below. To view full responses, see Table 1 of the Appendix.
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 15Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 3: What business lines are included in your discussions?
Mortga
ge Le
nding
(51.4
1%)
Opera
tions
(5.40
%)Mark
eting
(3.52
%)
Branc
h Man
agem
ent (0
.47%)
Cash
Man
agem
ent/T
reasu
ry (5.
87%)
Finan
ce (8.
92%)
Retai
l Ban
king (
55.16
%)
N/A (
4.93%
)
Commerc
ial Le
nding
(51.4
1%)
ALM/A
LCO (5
.40%)
All (1
5.73%
)
Cons
umer
Lend
ing (4
6.71%
)
Commerc
ial Ba
nking
(8.92
%)
Manag
emen
t (5.87
%)
Invest
ments/
Secu
rities
(15.2
6%)
56%54%52%50%48%46%44%42%40%38%36%34%32%30%28%26%24%22%20%18%16%14%12%10%
8%6%4%2%0%
Resp
onse
Perc
enta
ge
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 16Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 4: Is developing additional products one of your strategies?Ne
w depo
sit pr
oduc
ts (14
.29%)
Varia
ble Ra
te De
posit
Acco
unt (3
.33%)
Relat
ionsh
ip Pri
cing (
2.86%
)Cre
dit Ca
rd (2.
38%)
Reward
s Acco
unt (1
.43%)
More tie
red de
posit
s (4.2
9%)
Busin
ess Ac
coun
ts (4.
29%)
Rate
Sens
itive M
oney
Mark
et Ac
coun
t (16.1
9%)
New fe
es (1.
43%)
Bund
le Pro
ducts
/Servi
ces (1
.90%)
Market
Tied D
epos
it Acco
unt (0
.95%)
Odd T
erm CD
/Speci
al CD
Rate
(15.24
%)
High Y
ield C
hecki
ng (3
.33%)
N/A (
13.33
%)
Step-
up CD
(10.9
5%)
New lo
an pr
oduc
ts (13
.81%)
Treasu
ry Man
agem
ent (0
.95%)
Electr
onic P
roduc
ts - M
obile
Bank
ing, R
emote
Depo
sit,
Onlin
e Loa
n App
licati
ons (
7.62%
)
Varia
ble Ra
te Lo
ans (
3.81%
)
ARM Pr
oduc
ts (8.
10%)
17%16%15%14%13%12%11%10%
9%8%7%6%5%4%3%2%1%0%
Resp
onse
Perc
enta
ge
TotalRespondents
(48.10%)Respondents said "Yes"
(51.90%)Respondents said "No"
Question 5: If yes, what kind of products are you developing?
*This question was asked as an open ended question. Responses were categorized as displayed below. To view full responses, see Table 2 of the Appendix.
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 17Section 2: The Landscape Transformed
Measu
ring R
ate Se
nsitiv
ity (1
6.22%
)
Liquid
ity An
alysis
(5.07
%)
Measu
ring I
nteres
t Rate
Risk
(6.42
%)
ALCO
-ALM
Analy
sis/A
LM Pr
ovide
r (27.0
3%)
Modeli
ng/ "
What if
" scen
arios
(26.3
5%)
N/A (
9.46%
)
Analy
zing H
istori
cal D
ata (9
.12%)
Stress
Testi
ng (1
0.14%
)
Identi
fying
Hot M
oney
(7.77
%)Sh
ort m
aturit
ies on
inve
stmen
ts (0.
68%)
Revie
wing M
aturit
ies (8
.78%)
28%27%26%25%24%23%22%21%20%19%18%17%16%15%14%13%12%11%10%
9%8%7%6%5%4%3%2%1%0%
Resp
onse
Perc
enta
ge
Survey Results — Total Respondents
Question 6: Are you quantifying your deposit risk?
(73.16%)Respondents said "Yes"
(26.84%)Respondents said "No"
TotalRespondents
Question 7: If yes, what are you doing to quantify your risk?*This question was asked as an open ended question. Responses were categorized as displayed below. To view full responses, see Table 3 of the Appendix.
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 18Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 8: Have you started any changes to pricing in anticipation of possible rising rates in 2015?
TotalRespondents
(35.01%)Respondents said "Yes"
(64.99%)Respondents said "No"
Question 9: When do you anticipate to start developing a strategy or having discussions on the topic?
*Respondents who indicated that they "are NOT currently in the process of developing a strategy for a rising rate environment or in discussion to do so" on question 1 answered question 9.
In the
next
month
(18.26
%)
In the
next
6 mon
ths (3
2.17%
)
In the
next
3 mon
ths (3
1.30%
)
More
than
a ye
ar aw
ay (3
.48%)
In the
next
year
(14.78
%)
34%32%30%28%26%24%22%20%18%16%14%12%10%
8%6%4%2%0%
Resp
onse
Perc
enta
ge
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 19Section 2: The Landscape Transformed
Survey Results — Total Respondents
Question 10: When rates do change, what will you do?
We'll w
ait a
few m
onths
or m
ore (2
0.30%
)
We'll w
ait a
month
or tw
o (51
.50%)
Chan
ge rig
ht aw
ay (2
3.87%
)
We'll a
nticip
ate th
e cha
nge a
nd ra
ise ou
r rates
first
(4.32
%)
52%50%48%46%44%42%40%38%36%34%32%30%28%26%24%22%20%18%16%14%12%10%
8%6%4%2%0%
Resp
onse
Perc
enta
ge
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 20Section 3: Demographics
DEMOGRAPHICS
SectiOn
3
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 21Section 3: Demographics
Survey Results — Demographics*Demographic breakouts are based on those respondents that identified themselves.
Savin
gs &
Loan
(6.85
%)
Bank
(53.5
3%)
Credit
Union
(39.6
3%)
54%51%48%45%42%39%36%33%30%27%24%21%18%15%12%
9%6%3%0%
Resp
onse
Perc
enta
ge
Institution Type
$200
M - <$5
00M (2
8.01%
)
<$100
M (25.1
0%)
$100
M - <$2
00M (2
1.58%
)
≥$1B (
11.00
%)
$500
M - <$1
B (14
.32%)
34%32%30%28%26%24%22%20%18%16%14%12%10%
8%6%4%2%0%
Resp
onse
Perc
enta
geAssets
South
Centr
al (17
.84%)
Centr
al (37
.14%)
Easte
rn (30
.29%)
Western
(14.7
3%)
42%39%36%33%30%27%24%21%18%15%12%
9%6%3%0%
Resp
onse
Perc
enta
ge
Region
Survey Results — Appendix
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses)
Survey Results — Appendix
25 Monitor economic commentary; hold regularly recurring meetings to review data, including competitor rates; and to
model various scenarios
8/10/2015 1:14 PM
26 Review competitor current share offerings, reviewing maturing cd's, staying within ALM risk guidelines. 8/10/2015 12:28 PM
27 Discussions at ALCO committee, modeling and forecasting balance sheet and income statements at different rate
scenarios
8/10/2015 12:19 PM
28 Monitoring the Treasury Rates, Fed-Funds Rate, loan and deposit rates of other financial insitutions. 8/10/2015 12:12 PM
29 Monthly meetings with all major department heads 8/10/2015 11:44 AM
30 Maintain assets and liabilities on a short term basis. 8/10/2015 10:20 AM
31 It's not a matter of will rates rise, but rather when. The timing is critical in protecting deposit base and profits 8/10/2015 9:08 AM
32 Weekly management meetings, followed up with monthly Board discussions. 8/10/2015 8:36 AM
33 Discussion, stress testing, asset review, 8/10/2015 8:30 AM
34 Shortening duration on loans and investments. Building cash. Identifying investments that could be sold. Offering a call
certificate to our members to lock them into long term deposits with higher early withdrawal penalties.
8/10/2015 8:02 AM
35 Meeting with different departments to make sure that deposits and loans/investments are moving in the same direction
as far as pricing.
8/10/2015 7:31 AM
36 Through our 3rd party provider for Interest Rate Risk we are evaluating the environment and discussing products to
introduce when the time is right.
8/10/2015 7:29 AM
37 Relevant discussions between the ALCO and strategic planning committees. 8/10/2015 6:55 AM
38 We are developing new products to offer our customers and making personal contacts asking them to contact us price
to making decisions on how to invest.
8/8/2015 9:44 PM
39 Preparing customers for interest rate increases 8/8/2015 4:53 PM
40 Reviewing interest rate sensitivity, developing marketing strategies 8/8/2015 4:17 PM
41 Rate, yield, term and risk reward discussions take place monthly with all line of businesses represented. Meetings
include CFO and his staff.
8/8/2015 8:32 AM
42 Our management team is having discussions with our loan officers and deposit personnel mainly from a risk
standpoint. We want to maintain and grow our deposits even in the face of rising interest rates. Our loan officers are
aware of the customers who may be stretched by having their variable rate loans repriced.
8/7/2015 4:57 PM
43 Strategy among Executive Committee and shared with the Board and rest of the Bank. 8/7/2015 4:40 PM
44 Short on investmnents 8/7/2015 4:34 PM
45 Discussions on how rising rates will impact the bank. 8/7/2015 3:47 PM
46 Part of the ALCO (Asset/Liability Management) Committee's responsibilities. Doing financial projections based on
different rate scenarios.
8/7/2015 3:35 PM
47 ALCO modeling and strategic discussions 8/7/2015 3:35 PM
48 Test strategies in the ALM model. 8/7/2015 3:28 PM
49 Mortgage - Secondary Market Commercial - Risk Low and Long 8/7/2015 3:18 PM
50 Discussions with ALCO member and directors 8/7/2015 3:13 PM
51 Continued discussions between ALCO and BOD 8/7/2015 3:07 PM
52 evaluating various scenarios and customer patterns of behavior in our various products 8/7/2015 3:07 PM
53 We are reviewing ALM model results, current pipelines, historical growth, etc. 8/7/2015 2:57 PM
54 Looking at in-house talent capacity and then outsourcing the rest. 8/7/2015 2:55 PM
55 yield curve, economic reports 8/7/2015 2:31 PM
56 Our focus has been on bank liquidity if rising rates cause a reduction in large deposits currently in non-interest bearing
accounts.
8/7/2015 2:28 PM
57 Review all rate sensitive balance sheet balances and involve managers in developing a strategy for a rising rate
environment.
8/7/2015 2:20 PM
2 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
25 Monitor economic commentary; hold regularly recurring meetings to review data, including competitor rates; and to
model various scenarios
8/10/2015 1:14 PM
26 Review competitor current share offerings, reviewing maturing cd's, staying within ALM risk guidelines. 8/10/2015 12:28 PM
27 Discussions at ALCO committee, modeling and forecasting balance sheet and income statements at different rate
scenarios
8/10/2015 12:19 PM
28 Monitoring the Treasury Rates, Fed-Funds Rate, loan and deposit rates of other financial insitutions. 8/10/2015 12:12 PM
29 Monthly meetings with all major department heads 8/10/2015 11:44 AM
30 Maintain assets and liabilities on a short term basis. 8/10/2015 10:20 AM
31 It's not a matter of will rates rise, but rather when. The timing is critical in protecting deposit base and profits 8/10/2015 9:08 AM
32 Weekly management meetings, followed up with monthly Board discussions. 8/10/2015 8:36 AM
33 Discussion, stress testing, asset review, 8/10/2015 8:30 AM
34 Shortening duration on loans and investments. Building cash. Identifying investments that could be sold. Offering a call
certificate to our members to lock them into long term deposits with higher early withdrawal penalties.
8/10/2015 8:02 AM
35 Meeting with different departments to make sure that deposits and loans/investments are moving in the same direction
as far as pricing.
8/10/2015 7:31 AM
36 Through our 3rd party provider for Interest Rate Risk we are evaluating the environment and discussing products to
introduce when the time is right.
8/10/2015 7:29 AM
37 Relevant discussions between the ALCO and strategic planning committees. 8/10/2015 6:55 AM
38 We are developing new products to offer our customers and making personal contacts asking them to contact us price
to making decisions on how to invest.
8/8/2015 9:44 PM
39 Preparing customers for interest rate increases 8/8/2015 4:53 PM
40 Reviewing interest rate sensitivity, developing marketing strategies 8/8/2015 4:17 PM
41 Rate, yield, term and risk reward discussions take place monthly with all line of businesses represented. Meetings
include CFO and his staff.
8/8/2015 8:32 AM
42 Our management team is having discussions with our loan officers and deposit personnel mainly from a risk
standpoint. We want to maintain and grow our deposits even in the face of rising interest rates. Our loan officers are
aware of the customers who may be stretched by having their variable rate loans repriced.
8/7/2015 4:57 PM
43 Strategy among Executive Committee and shared with the Board and rest of the Bank. 8/7/2015 4:40 PM
44 Short on investmnents 8/7/2015 4:34 PM
45 Discussions on how rising rates will impact the bank. 8/7/2015 3:47 PM
46 Part of the ALCO (Asset/Liability Management) Committee's responsibilities. Doing financial projections based on
different rate scenarios.
8/7/2015 3:35 PM
47 ALCO modeling and strategic discussions 8/7/2015 3:35 PM
48 Test strategies in the ALM model. 8/7/2015 3:28 PM
49 Mortgage - Secondary Market Commercial - Risk Low and Long 8/7/2015 3:18 PM
50 Discussions with ALCO member and directors 8/7/2015 3:13 PM
51 Continued discussions between ALCO and BOD 8/7/2015 3:07 PM
52 evaluating various scenarios and customer patterns of behavior in our various products 8/7/2015 3:07 PM
53 We are reviewing ALM model results, current pipelines, historical growth, etc. 8/7/2015 2:57 PM
54 Looking at in-house talent capacity and then outsourcing the rest. 8/7/2015 2:55 PM
55 yield curve, economic reports 8/7/2015 2:31 PM
56 Our focus has been on bank liquidity if rising rates cause a reduction in large deposits currently in non-interest bearing
accounts.
8/7/2015 2:28 PM
57 Review all rate sensitive balance sheet balances and involve managers in developing a strategy for a rising rate
environment.
8/7/2015 2:20 PM
2 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
58 We are looking at all our variable rate deposit products and loan products. Trying to measure potential changes. 8/7/2015 2:20 PM
59 ALCO/ Board discuss strategies and opportunities using ALM reports and projections. 8/7/2015 2:17 PM
60 Selling mortgages, short-term borrowing, deposit rate promotions, loan-term and short term investments 8/7/2015 2:14 PM
61 We are doing this loan by loan. 8/7/2015 2:08 PM
62 Frankly, if the CEO hasn't already anticipated this two or three years ago it may be late. Policies, or at least the
carrying-out thereof, for lending, investments and deposits should have been tinkered with before now.
8/7/2015 2:00 PM
63 mostly discussing how fast to increase deposit rates. Expect most competition on the short maturity CD's and MMDAs 8/7/2015 1:59 PM
64 We are small so it is all under one umbrella. We integrate outside consultant data with our own projections and
analysis.
8/7/2015 1:47 PM
65 Meetings in ALCO committee; training loan officers on loan pricing and structure. 8/7/2015 1:47 PM
66 Cost of funds, ALM strategies 8/7/2015 1:47 PM
67 Through our ALCO and deposit rate committees 8/7/2015 1:40 PM
68 This occurs at the asset/liability management committee meetings. 8/7/2015 1:39 PM
69 Scenario testing, ALM simulations, market research 8/7/2015 1:36 PM
70 regular monthly meetings as a whole CU and assest / liabilty meetings with "c" level staff 8/7/2015 1:35 PM
71 Discussion topic in ALCO 8/7/2015 1:32 PM
72 Determining how quickly rates will rise, what future loan demand will be for rates, locking in CD's with our members
and loan advances while rates are lower.
8/7/2015 1:31 PM
73 Deposit Strategy Meetings 8/7/2015 1:29 PM
74 Four person team, ...CFO, Chief Lending Officer, Deposit Operations Officer, CEO 8/7/2015 1:26 PM
75 Executive team and ALCO 8/7/2015 1:24 PM
76 SHORT TERM INVESTMENTS AND VARIABLE RATE LOAN PRODUCTS 8/7/2015 1:22 PM
77 Discussion is held monthly at ALCO Committee and is more of a shoot from the hip type discussion. 8/7/2015 1:16 PM
78 Reviewing Loan & Investment Portfolio 8/7/2015 1:13 PM
79 ALM modeling, strategic meetings 8/7/2015 1:12 PM
80 no fixed rates over 3 years 8/7/2015 1:12 PM
81 We know that our rates are about 10 to 15 bps higher than our market , so we will be able to raise our rates maybe 5
bps if fed goes up 25.
8/7/2015 1:09 PM
82 group discussions with market leaders 8/7/2015 1:08 PM
83 it revolves around pricing new and renewing products 8/7/2015 1:02 PM
84 We started girding for a rising rate environment years ago. We worked with all lines of business often using the
investment portfolio to offset duration risk in our loan portfolios. ALCO is the committee that implements the strategy
with the business units and also focuses greatly on expected changes in depositor behavior once rates change
8/7/2015 1:00 PM
85 Using ALM tools/resources in addition to reviewing and understanding market conditions on a local, national and
international level.
8/7/2015 12:53 PM
86 Internal reports provide info on current rates and rates on maturing loans providing re-pricing opportunities. 8/7/2015 12:49 PM
87 running shocks, managing runoff, maintaining investment portfolio bias to expected rate increases, looking at
adjustable products, managing amortization of loan terms, considering policy limit adjustments on loan and deposit
types and investment products
8/7/2015 12:42 PM
88 Decreasing terms on investments, and initiating promos for longer term CD's. 8/7/2015 12:41 PM
89 see what compression in .25 and.50 change might be 8/7/2015 12:40 PM
90 Discuss pricing strategies as rates rise 8/7/2015 12:39 PM
91 maintaining shorter term investments and limiting longer term fixed rate loans 8/7/2015 12:38 PM
92 We are already prepared 8/7/2015 12:37 PM
3 / 13
Preparations in the Face of a Rising Rate Environment
Survey Results — Appendix
58 We are looking at all our variable rate deposit products and loan products. Trying to measure potential changes. 8/7/2015 2:20 PM
59 ALCO/ Board discuss strategies and opportunities using ALM reports and projections. 8/7/2015 2:17 PM
60 Selling mortgages, short-term borrowing, deposit rate promotions, loan-term and short term investments 8/7/2015 2:14 PM
61 We are doing this loan by loan. 8/7/2015 2:08 PM
62 Frankly, if the CEO hasn't already anticipated this two or three years ago it may be late. Policies, or at least the
carrying-out thereof, for lending, investments and deposits should have been tinkered with before now.
8/7/2015 2:00 PM
63 mostly discussing how fast to increase deposit rates. Expect most competition on the short maturity CD's and MMDAs 8/7/2015 1:59 PM
64 We are small so it is all under one umbrella. We integrate outside consultant data with our own projections and
analysis.
8/7/2015 1:47 PM
65 Meetings in ALCO committee; training loan officers on loan pricing and structure. 8/7/2015 1:47 PM
66 Cost of funds, ALM strategies 8/7/2015 1:47 PM
67 Through our ALCO and deposit rate committees 8/7/2015 1:40 PM
68 This occurs at the asset/liability management committee meetings. 8/7/2015 1:39 PM
69 Scenario testing, ALM simulations, market research 8/7/2015 1:36 PM
70 regular monthly meetings as a whole CU and assest / liabilty meetings with "c" level staff 8/7/2015 1:35 PM
71 Discussion topic in ALCO 8/7/2015 1:32 PM
72 Determining how quickly rates will rise, what future loan demand will be for rates, locking in CD's with our members
and loan advances while rates are lower.
8/7/2015 1:31 PM
73 Deposit Strategy Meetings 8/7/2015 1:29 PM
74 Four person team, ...CFO, Chief Lending Officer, Deposit Operations Officer, CEO 8/7/2015 1:26 PM
75 Executive team and ALCO 8/7/2015 1:24 PM
76 SHORT TERM INVESTMENTS AND VARIABLE RATE LOAN PRODUCTS 8/7/2015 1:22 PM
77 Discussion is held monthly at ALCO Committee and is more of a shoot from the hip type discussion. 8/7/2015 1:16 PM
78 Reviewing Loan & Investment Portfolio 8/7/2015 1:13 PM
79 ALM modeling, strategic meetings 8/7/2015 1:12 PM
80 no fixed rates over 3 years 8/7/2015 1:12 PM
81 We know that our rates are about 10 to 15 bps higher than our market , so we will be able to raise our rates maybe 5
bps if fed goes up 25.
8/7/2015 1:09 PM
82 group discussions with market leaders 8/7/2015 1:08 PM
83 it revolves around pricing new and renewing products 8/7/2015 1:02 PM
84 We started girding for a rising rate environment years ago. We worked with all lines of business often using the
investment portfolio to offset duration risk in our loan portfolios. ALCO is the committee that implements the strategy
with the business units and also focuses greatly on expected changes in depositor behavior once rates change
8/7/2015 1:00 PM
85 Using ALM tools/resources in addition to reviewing and understanding market conditions on a local, national and
international level.
8/7/2015 12:53 PM
86 Internal reports provide info on current rates and rates on maturing loans providing re-pricing opportunities. 8/7/2015 12:49 PM
87 running shocks, managing runoff, maintaining investment portfolio bias to expected rate increases, looking at
adjustable products, managing amortization of loan terms, considering policy limit adjustments on loan and deposit
types and investment products
8/7/2015 12:42 PM
88 Decreasing terms on investments, and initiating promos for longer term CD's. 8/7/2015 12:41 PM
89 see what compression in .25 and.50 change might be 8/7/2015 12:40 PM
90 Discuss pricing strategies as rates rise 8/7/2015 12:39 PM
91 maintaining shorter term investments and limiting longer term fixed rate loans 8/7/2015 12:38 PM
92 We are already prepared 8/7/2015 12:37 PM
3 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
93 Management ALCO weekly meetings. 8/7/2015 12:35 PM
94 Our discussions center around the ALCO Committee, and the Board of Directors. As a committee we analyse the
impacts of a rate increase and monitor our portfolio.
8/7/2015 12:30 PM
95 One by one 8/7/2015 12:25 PM
96 Everything goes through management then must be approved by corporate 8/7/2015 12:20 PM
97 Review and possible adjustments to investment portfolio 8/7/2015 12:17 PM
98 Primarily through the ALCO Committee process 8/7/2015 12:16 PM
99 Discussions with retail deposit and business deposit lines of business through our interest rate setting committee then
shared with ALCO
8/7/2015 12:15 PM
100 General discussion, keeping on eye on current business news 8/7/2015 12:15 PM
101 We currently monitor our interest rate risk using two different ALM models with extremely conservative assumptions. 8/7/2015 12:12 PM
102 We have already developed and executed on a strategy to prepare ourselves for rising rates. We identified places
where sensitivity is highest and that we could have the greatest impact on changing.
8/7/2015 12:10 PM
103 Discuss at weekly Mgt. Comm. meetings and bi-monthly ALCO meetings. Insert strategies in meeting minutes and
Bank's ALM Policy.
8/7/2015 12:09 PM
104 discussing with bank's senior management 8/7/2015 12:07 PM
105 loan structure to reflect probablility 8/7/2015 12:07 PM
106 Most of our larger loans have adjustable rates and they will increase as the market does. We will match the Fed funds
rate for increase amounts.
8/7/2015 12:03 PM
107 Discussions with third party vendors on ALM as well as economic advisors 8/7/2015 12:03 PM
108 To retain and grow deposits during the rising rate environment 8/7/2015 12:03 PM
109 Strategy is not to be a first mover but look at how quickly our cost of funds will move up based on how quickly we will
re-price our liabilities.
8/7/2015 12:00 PM
110 Integrated asset liability managment through monthly or more frequently scheduled meetings. 8/7/2015 12:00 PM
111 meetings, regular modeling and forecasting 8/7/2015 11:57 AM
112 We continue to run risking rate scenarios and are looking at specific products to offer instead of a blanket rate increase
across all deposits.
8/7/2015 11:55 AM
113 Analysis of historical deposit flows, in, out and between deposit products 8/7/2015 11:54 AM
114 Through our ALCO meetings 8/7/2015 11:54 AM
115 discussion and action amongst key staff and Board of Directors as well as key customers 8/7/2015 11:53 AM
116 ALCO and our ALM model 8/7/2015 11:51 AM
117 Using Ratewatch and using our IRR reports in our ALCO meeting. Discussions are generated from those reports. 8/7/2015 11:50 AM
118 Mainly handled through ALCO and running the respective IRR models. 8/7/2015 11:50 AM
119 Currently limiting our interest rate risk exposure in long term mortgage. Ramping-up focus on autos and other
consumer lending
8/7/2015 11:47 AM
120 none 8/7/2015 11:47 AM
121 look at all of our areas and how it might be affected 8/7/2015 11:46 AM
122 Asset Liability committee is comprised of managers from each business line so discussions occur on a monthly basis. 8/7/2015 11:45 AM
123 RAISING LOAN RATES ASAP AND DELAY RAISING DEPOSIT RATES 8/7/2015 11:45 AM
124 n/a 8/7/2015 11:45 AM
125 We continue to maintain all our existing lines of business and price them as always off the same indices:FHLB, Libor,
Swap curve, etc
8/7/2015 11:43 AM
126 Look at rates, tiers and terms. Find trigger points for when to enact the next steps, as possible, so that we are taking
action, not reacting to action.
8/7/2015 11:42 AM
4 / 13
Preparations in the Face of a Rising Rate Environment
Survey Results — Appendix
127 Analyzing financial news and FOMC meetings. ALCO meetings. 8/7/2015 11:39 AM
128 We have a quarterly review with different rate scenarios and look at our portfolio to determine what might happen. 8/7/2015 11:34 AM
129 In conjunction with the annual budget process, considering and modeling a few rate increase possibles to assess
impacts to loan demand by business line.
8/7/2015 11:33 AM
130 constant conversation with our IRRM vendor 8/7/2015 11:32 AM
131 More variable rate products 8/7/2015 11:30 AM
132 Pushing variable rate loans 8/7/2015 11:30 AM
133 IRR Studies 8/7/2015 11:29 AM
134 Executive management meetings. 8/7/2015 11:26 AM
135 Our quarterly ALM process and liquidity monitoring. 8/7/2015 11:24 AM
136 Keep assets floating, and liabilities fixed. 8/7/2015 11:22 AM
137 Multiple focus committees Monthly committee reports 8/7/2015 11:21 AM
138 Comparison of rates offered by competing banks for real estate loans. 8/7/2015 11:19 AM
139 Executive team meetings and ALCO discussion 8/7/2015 11:19 AM
140 Organizational meeting with department heads to assign research. 8/7/2015 11:18 AM
141 Modeling the cost and at what point we would increase 8/7/2015 11:18 AM
142 We are a small bank so it is the management team meeting to discuss options and considerations. 8/7/2015 11:17 AM
143 Deposit Step-up/Bump up 8/7/2015 11:17 AM
144 ALCO committee discuss Interest Rate Risk 8/7/2015 11:16 AM
145 BECOME MORE ASSET SENSITIVE 8/7/2015 11:16 AM
146 Laddering investment maturities, holding deposit rates as much as possible, and moving loan rates up as quickly as
possible. We will watch internal return compared to external margins.
8/7/2015 11:14 AM
147 We have an ALCO Committee that researches, simulates, analyzes and develops strategies with input regarding loan
and deposit demand and related yields/rates.
8/7/2015 11:13 AM
148 Management working with ALCO 8/7/2015 11:12 AM
149 Over the last 6 years, we have spent a great deal of time discussing our reaction to rising rates. We have also used
models to help us understand potential risks
8/7/2015 11:10 AM
150 Identifying areas of risk and opportunity and working closely with finance (which manages rates across the org) to
refine current processes and develop new processes.
8/7/2015 11:10 AM
151 We have continual discussions with our loan officers to generate floating rate loans. 8/7/2015 11:09 AM
152 staying short on the asset side. may extend liabilities when we think rates may start to move. 8/7/2015 11:09 AM
153 ALCO meetings 8/7/2015 11:09 AM
154 We have been looking at what rising rates will do to our net income as well as our asset/liabilit mix. 8/7/2015 11:09 AM
155 ALM Analysis 8/7/2015 11:09 AM
156 We use the ALCO Committee 8/7/2015 11:08 AM
157 Having liquidity to deploy into higher rates 8/7/2015 11:07 AM
158 ALCO Modeling 8/7/2015 11:07 AM
159 Through our ALCO committee 8/7/2015 11:07 AM
160 Analysis of how quickly or loan portfolio will turn over and how quickly we will have to raise saving and investment
rates for our members
8/7/2015 11:06 AM
161 We are a credit union. We are primarily concerned with members' deposits when thinking about rising rates. We will
develop a time line to coincide the rising market with raising our members' deposit rates
8/7/2015 11:06 AM
162 Heavy ALM modeling 8/7/2015 11:06 AM
5 / 13
Preparations in the Face of a Rising Rate Environment
93 Management ALCO weekly meetings. 8/7/2015 12:35 PM
94 Our discussions center around the ALCO Committee, and the Board of Directors. As a committee we analyse the
impacts of a rate increase and monitor our portfolio.
8/7/2015 12:30 PM
95 One by one 8/7/2015 12:25 PM
96 Everything goes through management then must be approved by corporate 8/7/2015 12:20 PM
97 Review and possible adjustments to investment portfolio 8/7/2015 12:17 PM
98 Primarily through the ALCO Committee process 8/7/2015 12:16 PM
99 Discussions with retail deposit and business deposit lines of business through our interest rate setting committee then
shared with ALCO
8/7/2015 12:15 PM
100 General discussion, keeping on eye on current business news 8/7/2015 12:15 PM
101 We currently monitor our interest rate risk using two different ALM models with extremely conservative assumptions. 8/7/2015 12:12 PM
102 We have already developed and executed on a strategy to prepare ourselves for rising rates. We identified places
where sensitivity is highest and that we could have the greatest impact on changing.
8/7/2015 12:10 PM
103 Discuss at weekly Mgt. Comm. meetings and bi-monthly ALCO meetings. Insert strategies in meeting minutes and
Bank's ALM Policy.
8/7/2015 12:09 PM
104 discussing with bank's senior management 8/7/2015 12:07 PM
105 loan structure to reflect probablility 8/7/2015 12:07 PM
106 Most of our larger loans have adjustable rates and they will increase as the market does. We will match the Fed funds
rate for increase amounts.
8/7/2015 12:03 PM
107 Discussions with third party vendors on ALM as well as economic advisors 8/7/2015 12:03 PM
108 To retain and grow deposits during the rising rate environment 8/7/2015 12:03 PM
109 Strategy is not to be a first mover but look at how quickly our cost of funds will move up based on how quickly we will
re-price our liabilities.
8/7/2015 12:00 PM
110 Integrated asset liability managment through monthly or more frequently scheduled meetings. 8/7/2015 12:00 PM
111 meetings, regular modeling and forecasting 8/7/2015 11:57 AM
112 We continue to run risking rate scenarios and are looking at specific products to offer instead of a blanket rate increase
across all deposits.
8/7/2015 11:55 AM
113 Analysis of historical deposit flows, in, out and between deposit products 8/7/2015 11:54 AM
114 Through our ALCO meetings 8/7/2015 11:54 AM
115 discussion and action amongst key staff and Board of Directors as well as key customers 8/7/2015 11:53 AM
116 ALCO and our ALM model 8/7/2015 11:51 AM
117 Using Ratewatch and using our IRR reports in our ALCO meeting. Discussions are generated from those reports. 8/7/2015 11:50 AM
118 Mainly handled through ALCO and running the respective IRR models. 8/7/2015 11:50 AM
119 Currently limiting our interest rate risk exposure in long term mortgage. Ramping-up focus on autos and other
consumer lending
8/7/2015 11:47 AM
120 none 8/7/2015 11:47 AM
121 look at all of our areas and how it might be affected 8/7/2015 11:46 AM
122 Asset Liability committee is comprised of managers from each business line so discussions occur on a monthly basis. 8/7/2015 11:45 AM
123 RAISING LOAN RATES ASAP AND DELAY RAISING DEPOSIT RATES 8/7/2015 11:45 AM
124 n/a 8/7/2015 11:45 AM
125 We continue to maintain all our existing lines of business and price them as always off the same indices:FHLB, Libor,
Swap curve, etc
8/7/2015 11:43 AM
126 Look at rates, tiers and terms. Find trigger points for when to enact the next steps, as possible, so that we are taking
action, not reacting to action.
8/7/2015 11:42 AM
4 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix127 Analyzing financial news and FOMC meetings. ALCO meetings. 8/7/2015 11:39 AM
128 We have a quarterly review with different rate scenarios and look at our portfolio to determine what might happen. 8/7/2015 11:34 AM
129 In conjunction with the annual budget process, considering and modeling a few rate increase possibles to assess
impacts to loan demand by business line.
8/7/2015 11:33 AM
130 constant conversation with our IRRM vendor 8/7/2015 11:32 AM
131 More variable rate products 8/7/2015 11:30 AM
132 Pushing variable rate loans 8/7/2015 11:30 AM
133 IRR Studies 8/7/2015 11:29 AM
134 Executive management meetings. 8/7/2015 11:26 AM
135 Our quarterly ALM process and liquidity monitoring. 8/7/2015 11:24 AM
136 Keep assets floating, and liabilities fixed. 8/7/2015 11:22 AM
137 Multiple focus committees Monthly committee reports 8/7/2015 11:21 AM
138 Comparison of rates offered by competing banks for real estate loans. 8/7/2015 11:19 AM
139 Executive team meetings and ALCO discussion 8/7/2015 11:19 AM
140 Organizational meeting with department heads to assign research. 8/7/2015 11:18 AM
141 Modeling the cost and at what point we would increase 8/7/2015 11:18 AM
142 We are a small bank so it is the management team meeting to discuss options and considerations. 8/7/2015 11:17 AM
143 Deposit Step-up/Bump up 8/7/2015 11:17 AM
144 ALCO committee discuss Interest Rate Risk 8/7/2015 11:16 AM
145 BECOME MORE ASSET SENSITIVE 8/7/2015 11:16 AM
146 Laddering investment maturities, holding deposit rates as much as possible, and moving loan rates up as quickly as
possible. We will watch internal return compared to external margins.
8/7/2015 11:14 AM
147 We have an ALCO Committee that researches, simulates, analyzes and develops strategies with input regarding loan
and deposit demand and related yields/rates.
8/7/2015 11:13 AM
148 Management working with ALCO 8/7/2015 11:12 AM
149 Over the last 6 years, we have spent a great deal of time discussing our reaction to rising rates. We have also used
models to help us understand potential risks
8/7/2015 11:10 AM
150 Identifying areas of risk and opportunity and working closely with finance (which manages rates across the org) to
refine current processes and develop new processes.
8/7/2015 11:10 AM
151 We have continual discussions with our loan officers to generate floating rate loans. 8/7/2015 11:09 AM
152 staying short on the asset side. may extend liabilities when we think rates may start to move. 8/7/2015 11:09 AM
153 ALCO meetings 8/7/2015 11:09 AM
154 We have been looking at what rising rates will do to our net income as well as our asset/liabilit mix. 8/7/2015 11:09 AM
155 ALM Analysis 8/7/2015 11:09 AM
156 We use the ALCO Committee 8/7/2015 11:08 AM
157 Having liquidity to deploy into higher rates 8/7/2015 11:07 AM
158 ALCO Modeling 8/7/2015 11:07 AM
159 Through our ALCO committee 8/7/2015 11:07 AM
160 Analysis of how quickly or loan portfolio will turn over and how quickly we will have to raise saving and investment
rates for our members
8/7/2015 11:06 AM
161 We are a credit union. We are primarily concerned with members' deposits when thinking about rising rates. We will
develop a time line to coincide the rising market with raising our members' deposit rates
8/7/2015 11:06 AM
162 Heavy ALM modeling 8/7/2015 11:06 AM
5 / 13
Preparations in the Face of a Rising Rate EnvironmentQ2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
163 Committee meetings, specifically ALCO 8/7/2015 11:06 AM
164 Estimating the pace and impact of increases on the current deposit portfolio. 8/7/2015 11:05 AM
165 ALCO and management discussions 8/7/2015 11:04 AM
166 Rate change simulations & monitoring competitors. 8/7/2015 11:02 AM
167 Discussing Net Interest Margin and deposit rates increases 8/7/2015 11:01 AM
168 Review market data 8/7/2015 10:58 AM
169 ALCO Committee 8/7/2015 10:58 AM
170 Using a 3rd party ALCO assistance company and segmenting our assets into what we call buckets to better
understand our exposures.
8/7/2015 10:57 AM
171 Commercial lending rate analysis 8/7/2015 10:57 AM
172 We are reviewing maturities and rate change opportunities very closely on both the deposit and loan side. 8/7/2015 10:57 AM
173 limiting length of asset pricing deposit offers incent longer-term 8/7/2015 10:56 AM
174 Continual committee meetings 8/7/2015 10:55 AM
175 Monitor maturities on all loans, stress variable rates and shorter fixed interest rate periods or terms. Increase C& I
lending opportunities and search out new niches with higher margins.
8/7/2015 10:49 AM
176 Our Treasury department is running analysis on the effects of rate changes and if customers start shifting balances to
CDs. We are also doing a CD rate special to see if we can impact volumes.
8/7/2015 10:46 AM
177 part of the ALCO process 8/7/2015 10:45 AM
178 ALCO meetings, Loan production pipelines, local and national deposit rate surveys 8/4/2015 3:56 PM
179 We use our ALM model to see where we have Interest rate risk. We review this quarterly and liquidity stress testing
semi-annually.
8/4/2015 7:42 AM
180 ALM 8/3/2015 9:51 AM
181 MODELING FOR A RISING RATE ENVIRONMENT 8/1/2015 11:03 AM
182 This is done at ALCO meetings 7/30/2015 12:58 PM
183 Working Groups 7/30/2015 12:38 PM
184 management and board discussion with aid of outside advisers 7/30/2015 8:51 AM
185 Brainstorming thru employee meetings 7/30/2015 7:44 AM
186 We changed our Real Estate loans to ARM's from Balloon payments 4 years ago & have resisted the urge to lower
rates or lengthen terms.
7/29/2015 3:45 PM
187 p 7/29/2015 3:09 PM
188 Continual analysis of the portfolio. Discussions on changes from fixed to variable rate mortgages to stay in the market
without taking higher risk.
7/29/2015 12:54 PM
189 Confer, discuss with department heads of lending and deposits. 7/29/2015 11:51 AM
190 Management team discussions. 7/29/2015 11:34 AM
191 Working through ALCO on ideas and thoughts 7/29/2015 6:41 AM
192 Evaluating the following areas: CD maturities and early withdraw penalties Loan maturities and floating vs fixed
portfolio review Assessing service fees including account analysis fees and associated ECR
7/28/2015 7:21 PM
193 Informal at this point. 7/28/2015 3:57 PM
194 talking with my trusted broker about securities we can buy. Working with VP of Loans about carrying out loans the
right amount of time.
7/28/2015 3:41 PM
195 Project and reforecast under various scenarios's 7/28/2015 3:34 PM
196 Looking at the repricing schedule of assets (mainly loans) to determine dollar amounts subject to monthly, quarterly,
etc repricing. Trying then to determine how quickly or slowly we might be able to reprice liabilities based on asset
repricings.
7/28/2015 3:16 PM
6 / 13
Preparations in the Face of a Rising Rate Environment
127 Analyzing financial news and FOMC meetings. ALCO meetings. 8/7/2015 11:39 AM
128 We have a quarterly review with different rate scenarios and look at our portfolio to determine what might happen. 8/7/2015 11:34 AM
129 In conjunction with the annual budget process, considering and modeling a few rate increase possibles to assess
impacts to loan demand by business line.
8/7/2015 11:33 AM
130 constant conversation with our IRRM vendor 8/7/2015 11:32 AM
131 More variable rate products 8/7/2015 11:30 AM
132 Pushing variable rate loans 8/7/2015 11:30 AM
133 IRR Studies 8/7/2015 11:29 AM
134 Executive management meetings. 8/7/2015 11:26 AM
135 Our quarterly ALM process and liquidity monitoring. 8/7/2015 11:24 AM
136 Keep assets floating, and liabilities fixed. 8/7/2015 11:22 AM
137 Multiple focus committees Monthly committee reports 8/7/2015 11:21 AM
138 Comparison of rates offered by competing banks for real estate loans. 8/7/2015 11:19 AM
139 Executive team meetings and ALCO discussion 8/7/2015 11:19 AM
140 Organizational meeting with department heads to assign research. 8/7/2015 11:18 AM
141 Modeling the cost and at what point we would increase 8/7/2015 11:18 AM
142 We are a small bank so it is the management team meeting to discuss options and considerations. 8/7/2015 11:17 AM
143 Deposit Step-up/Bump up 8/7/2015 11:17 AM
144 ALCO committee discuss Interest Rate Risk 8/7/2015 11:16 AM
145 BECOME MORE ASSET SENSITIVE 8/7/2015 11:16 AM
146 Laddering investment maturities, holding deposit rates as much as possible, and moving loan rates up as quickly as
possible. We will watch internal return compared to external margins.
8/7/2015 11:14 AM
147 We have an ALCO Committee that researches, simulates, analyzes and develops strategies with input regarding loan
and deposit demand and related yields/rates.
8/7/2015 11:13 AM
148 Management working with ALCO 8/7/2015 11:12 AM
149 Over the last 6 years, we have spent a great deal of time discussing our reaction to rising rates. We have also used
models to help us understand potential risks
8/7/2015 11:10 AM
150 Identifying areas of risk and opportunity and working closely with finance (which manages rates across the org) to
refine current processes and develop new processes.
8/7/2015 11:10 AM
151 We have continual discussions with our loan officers to generate floating rate loans. 8/7/2015 11:09 AM
152 staying short on the asset side. may extend liabilities when we think rates may start to move. 8/7/2015 11:09 AM
153 ALCO meetings 8/7/2015 11:09 AM
154 We have been looking at what rising rates will do to our net income as well as our asset/liabilit mix. 8/7/2015 11:09 AM
155 ALM Analysis 8/7/2015 11:09 AM
156 We use the ALCO Committee 8/7/2015 11:08 AM
157 Having liquidity to deploy into higher rates 8/7/2015 11:07 AM
158 ALCO Modeling 8/7/2015 11:07 AM
159 Through our ALCO committee 8/7/2015 11:07 AM
160 Analysis of how quickly or loan portfolio will turn over and how quickly we will have to raise saving and investment
rates for our members
8/7/2015 11:06 AM
161 We are a credit union. We are primarily concerned with members' deposits when thinking about rising rates. We will
develop a time line to coincide the rising market with raising our members' deposit rates
8/7/2015 11:06 AM
162 Heavy ALM modeling 8/7/2015 11:06 AM
5 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
197 Watching our NEV and looking closer at the assumptions. 7/28/2015 2:56 PM
198 open discussion meetings 7/28/2015 2:30 PM
199 Weekly meetings 7/28/2015 2:02 PM
200 ALCO Committee main body in discussion. Identify deposits relationships that would be at risk in a rising rate
environment. Assign RM to better understand clients' intentions with their liquidity. Deal with more rate sensitive
clients in one off manner.
7/28/2015 1:34 PM
201 Strategy in development stage 7/28/2015 1:26 PM
202 Locking in some longer term borrowing now or taking in brokered CD to fund future loan growth 7/28/2015 1:21 PM
203 We meet with the CFO to determine the risk and review the opportunities within each market. We also meet with our
Asset Liability Committee to discuss the appropriate timing for our bank
7/28/2015 1:01 PM
204 The strategy for dealing with different lines of business in the possible rising rate environment is to keep an eye on
current market rates, public discussions by the Fed, market trends, etc.
7/28/2015 12:34 PM
205 Review of product choices by ALCO and setting up new products based on ALCO decisions. 7/28/2015 12:26 PM
206 Working with ALM provider 7/28/2015 11:45 AM
207 We are using a loan pricing model and ALM model to determine the potential impact. 7/28/2015 11:31 AM
208 Each senior officer is developing strategies for their functional area to capitalize on or reduce the impact of rising rates
while enhancing the competitive position of the bank
7/28/2015 11:03 AM
209 Evaluating balance sheet structure with ALCO. Identify opportunities to lengthen liability duration and shorten asset
duration.
7/28/2015 10:45 AM
210 Running financial "What if" projections to determine how a rising rate environment will affect our Net Income and
Capital.
7/28/2015 10:44 AM
211 Looking at long term funding strategies. 7/28/2015 10:42 AM
212 ALCO meetings 7/28/2015 10:39 AM
213 Committee has been discussing a rising rate environment. 7/28/2015 10:19 AM
214 We use a consultant to assist with the ALCO process and they have been assisting us with a plan that realigns the
balance sheet to take advantage of pending rate increases. This involves changes in loans and investments as well as
deposit products.
7/28/2015 9:58 AM
215 Continuing discussions among senior staff, the Board and other community banks. Going to industry resources to
explore alternative products and fee opportunities.
7/28/2015 9:52 AM
216 We have a weekly meeting to discuss this with the managers of the divisions 7/28/2015 9:49 AM
217 Rate & product discussions 7/28/2015 9:41 AM
218 Reviewing current lines and removing old ones, looking at government guaranteed loans. We believe delinquencies
will increase Reducing fixed rate loans
7/28/2015 9:05 AM
219 NOT SURE 7/28/2015 9:05 AM
220 We have done some different risk assessments/rate analysis and constantly do 3-5 year planning. 7/28/2015 9:04 AM
221 Addressing rates on deposits and loans 7/28/2015 9:01 AM
222 Scheduled ALM meeting centered around the interest rate risk reports with various deposit scenarios runs. 7/28/2015 8:56 AM
223 ALCO discussion 7/28/2015 8:43 AM
224 ALM Committee Meetings. Reviewing interest rate risk report, running scenario reports with various deposit
assumption, utilizing liquidity stress testing tool
7/28/2015 8:29 AM
225 our senior management team is always planning for rate changes mostly based on competitive pricing. Of course,
being a rate leader allows for more flexibility.
7/28/2015 8:19 AM
226 ALCO Meetings discuss rate scenarios, risks, and strategies. 7/28/2015 8:16 AM
227 We have utilized our IRRM and capital planning during our budgeting process anticipating a 200bps rise during the
second half of this year. We targeted our balance sheet structure for 2015 in anticipation of this increase. We also are
consulting with an outside balance sheet structure advisor to assist with guiding us through the process.
7/28/2015 8:15 AM
7 / 13
Preparations in the Face of a Rising Rate Environment
163 Committee meetings, specifically ALCO 8/7/2015 11:06 AM
164 Estimating the pace and impact of increases on the current deposit portfolio. 8/7/2015 11:05 AM
165 ALCO and management discussions 8/7/2015 11:04 AM
166 Rate change simulations & monitoring competitors. 8/7/2015 11:02 AM
167 Discussing Net Interest Margin and deposit rates increases 8/7/2015 11:01 AM
168 Review market data 8/7/2015 10:58 AM
169 ALCO Committee 8/7/2015 10:58 AM
170 Using a 3rd party ALCO assistance company and segmenting our assets into what we call buckets to better
understand our exposures.
8/7/2015 10:57 AM
171 Commercial lending rate analysis 8/7/2015 10:57 AM
172 We are reviewing maturities and rate change opportunities very closely on both the deposit and loan side. 8/7/2015 10:57 AM
173 limiting length of asset pricing deposit offers incent longer-term 8/7/2015 10:56 AM
174 Continual committee meetings 8/7/2015 10:55 AM
175 Monitor maturities on all loans, stress variable rates and shorter fixed interest rate periods or terms. Increase C& I
lending opportunities and search out new niches with higher margins.
8/7/2015 10:49 AM
176 Our Treasury department is running analysis on the effects of rate changes and if customers start shifting balances to
CDs. We are also doing a CD rate special to see if we can impact volumes.
8/7/2015 10:46 AM
177 part of the ALCO process 8/7/2015 10:45 AM
178 ALCO meetings, Loan production pipelines, local and national deposit rate surveys 8/4/2015 3:56 PM
179 We use our ALM model to see where we have Interest rate risk. We review this quarterly and liquidity stress testing
semi-annually.
8/4/2015 7:42 AM
180 ALM 8/3/2015 9:51 AM
181 MODELING FOR A RISING RATE ENVIRONMENT 8/1/2015 11:03 AM
182 This is done at ALCO meetings 7/30/2015 12:58 PM
183 Working Groups 7/30/2015 12:38 PM
184 management and board discussion with aid of outside advisers 7/30/2015 8:51 AM
185 Brainstorming thru employee meetings 7/30/2015 7:44 AM
186 We changed our Real Estate loans to ARM's from Balloon payments 4 years ago & have resisted the urge to lower
rates or lengthen terms.
7/29/2015 3:45 PM
187 p 7/29/2015 3:09 PM
188 Continual analysis of the portfolio. Discussions on changes from fixed to variable rate mortgages to stay in the market
without taking higher risk.
7/29/2015 12:54 PM
189 Confer, discuss with department heads of lending and deposits. 7/29/2015 11:51 AM
190 Management team discussions. 7/29/2015 11:34 AM
191 Working through ALCO on ideas and thoughts 7/29/2015 6:41 AM
192 Evaluating the following areas: CD maturities and early withdraw penalties Loan maturities and floating vs fixed
portfolio review Assessing service fees including account analysis fees and associated ECR
7/28/2015 7:21 PM
193 Informal at this point. 7/28/2015 3:57 PM
194 talking with my trusted broker about securities we can buy. Working with VP of Loans about carrying out loans the
right amount of time.
7/28/2015 3:41 PM
195 Project and reforecast under various scenarios's 7/28/2015 3:34 PM
196 Looking at the repricing schedule of assets (mainly loans) to determine dollar amounts subject to monthly, quarterly,
etc repricing. Trying then to determine how quickly or slowly we might be able to reprice liabilities based on asset
repricings.
7/28/2015 3:16 PM
6 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
228 We are working on an overall deposit strategy including utilizing our interest rate risk software to model scenarios, We
are also reviewing our assumptions in the model.
7/28/2015 7:54 AM
229 Discussions are being held with the ALM personnel and loan officers 7/28/2015 7:53 AM
230 Continue to discuss with lending, investments, and deposits the inevitable rise in rates. No set process is in place in
any department but we are ready to monitor rate activity and respond accorsingly.
7/28/2015 7:45 AM
231 board, loan committee 7/28/2015 7:38 AM
232 Discuss the timeline and evaluate possible responses. Much leadership here is coming from accounting/operations,
with minimal input from lending or deposits. We plan to follow a closely managed strategy focused on the ALM aspect
of rate increase decisions. Competitively we also want to be aware of what other institutions are doing, and have plans
tied to decisions other institutions start to make.
7/28/2015 7:35 AM
233 Making each area of the operation aware of what is the best practices for handling the increase. Be aware of what the
competition is doing, use history as a means to gauge what the potential ways of dealing with this increase can have
to the organization.
7/28/2015 7:25 AM
234 We discuss at ALCO. We have evaluated the sensitivity to our deposits to interest rates. We are looking at different
scenarios as to the impact an increase in rates could have on our institution.
7/28/2015 7:23 AM
235 Still in discussion phase. 7/28/2015 6:51 AM
236 Strategic Plan Team and Board of Directors 7/28/2015 6:46 AM
237 We have always monitored area competitor rates and terms. We are considering different products to appeal to
customers during rising rate periods.
7/28/2015 6:44 AM
238 senior management is meeting to discuss 7/28/2015 6:40 AM
239 Expanding variability to our loan portfolio and buying fixed rate mid term deposits 7/28/2015 6:12 AM
240 core funding vs. non-core funding and the cost benefit between core and non-core funding and the speed at which we
can raise funds; selling loans;
7/27/2015 8:39 PM
241 At management and board ARCO, we have open discussion, and make decisions on future rates, DDA increase,
offering longer term CDs, or other funding decisions.
7/27/2015 8:09 PM
242 Reviewing the history of our rate sensitive accounts to predict how many will change, along with the fact we will only
move a percentage of the increase
7/27/2015 7:09 PM
243 reviewing projected non maturity account volitility reviewing interest rate risk reports 7/27/2015 6:57 PM
244 We talk about how and when we think rates will change and how to react to that in our normal ALCO process. 7/27/2015 6:29 PM
245 We meet monthly to discuss this. 7/27/2015 5:52 PM
246 We check other financial institutions rates on a regular basis 7/27/2015 5:45 PM
247 Handled through ALCO. 7/27/2015 5:34 PM
248 Review forecasting by market research analysts, senior management meetings, 7/27/2015 5:07 PM
249 An informal strategy of shorter rate investment purchases and closely scrutinizing loan maturities/repricing schedules
over 5 years in length.
7/27/2015 5:00 PM
250 Developed in our Asset & Liability regular meeting 7/27/2015 4:56 PM
251 Discussions with senior management staff 7/27/2015 4:54 PM
252 We administer our rates-as such have spent time revisiing our review sheets pertaining to competition and have
planed-we are a fiscal c.u. for a rising rate (ie: slower than in the past) starting in September with majority of changes
in the shorter term deposit products. Additionally, we continually run IRR ALM reviews on a number of different levels.
Key component is a defensive posture.
7/27/2015 4:53 PM
253 The ALCO discusses strategy for different rate scenarios, evaluating deposit retention and growth goals along with
cost.
7/27/2015 4:49 PM
254 As rates rise, realization that not all deposits are rate sensitive and developing products and stratgies to accomodate
this fact
7/27/2015 4:45 PM
255 We watch the rates weekly both on the cd market and also the bond market. We have already moved some of out
loan rates up in anticipation of the increases
7/27/2015 4:43 PM
256 We kept our powder dry so the lenders can keep on making fixed rate term loans. 7/27/2015 4:43 PM
8 / 13
Preparations in the Face of a Rising Rate Environment
197 Watching our NEV and looking closer at the assumptions. 7/28/2015 2:56 PM
198 open discussion meetings 7/28/2015 2:30 PM
199 Weekly meetings 7/28/2015 2:02 PM
200 ALCO Committee main body in discussion. Identify deposits relationships that would be at risk in a rising rate
environment. Assign RM to better understand clients' intentions with their liquidity. Deal with more rate sensitive
clients in one off manner.
7/28/2015 1:34 PM
201 Strategy in development stage 7/28/2015 1:26 PM
202 Locking in some longer term borrowing now or taking in brokered CD to fund future loan growth 7/28/2015 1:21 PM
203 We meet with the CFO to determine the risk and review the opportunities within each market. We also meet with our
Asset Liability Committee to discuss the appropriate timing for our bank
7/28/2015 1:01 PM
204 The strategy for dealing with different lines of business in the possible rising rate environment is to keep an eye on
current market rates, public discussions by the Fed, market trends, etc.
7/28/2015 12:34 PM
205 Review of product choices by ALCO and setting up new products based on ALCO decisions. 7/28/2015 12:26 PM
206 Working with ALM provider 7/28/2015 11:45 AM
207 We are using a loan pricing model and ALM model to determine the potential impact. 7/28/2015 11:31 AM
208 Each senior officer is developing strategies for their functional area to capitalize on or reduce the impact of rising rates
while enhancing the competitive position of the bank
7/28/2015 11:03 AM
209 Evaluating balance sheet structure with ALCO. Identify opportunities to lengthen liability duration and shorten asset
duration.
7/28/2015 10:45 AM
210 Running financial "What if" projections to determine how a rising rate environment will affect our Net Income and
Capital.
7/28/2015 10:44 AM
211 Looking at long term funding strategies. 7/28/2015 10:42 AM
212 ALCO meetings 7/28/2015 10:39 AM
213 Committee has been discussing a rising rate environment. 7/28/2015 10:19 AM
214 We use a consultant to assist with the ALCO process and they have been assisting us with a plan that realigns the
balance sheet to take advantage of pending rate increases. This involves changes in loans and investments as well as
deposit products.
7/28/2015 9:58 AM
215 Continuing discussions among senior staff, the Board and other community banks. Going to industry resources to
explore alternative products and fee opportunities.
7/28/2015 9:52 AM
216 We have a weekly meeting to discuss this with the managers of the divisions 7/28/2015 9:49 AM
217 Rate & product discussions 7/28/2015 9:41 AM
218 Reviewing current lines and removing old ones, looking at government guaranteed loans. We believe delinquencies
will increase Reducing fixed rate loans
7/28/2015 9:05 AM
219 NOT SURE 7/28/2015 9:05 AM
220 We have done some different risk assessments/rate analysis and constantly do 3-5 year planning. 7/28/2015 9:04 AM
221 Addressing rates on deposits and loans 7/28/2015 9:01 AM
222 Scheduled ALM meeting centered around the interest rate risk reports with various deposit scenarios runs. 7/28/2015 8:56 AM
223 ALCO discussion 7/28/2015 8:43 AM
224 ALM Committee Meetings. Reviewing interest rate risk report, running scenario reports with various deposit
assumption, utilizing liquidity stress testing tool
7/28/2015 8:29 AM
225 our senior management team is always planning for rate changes mostly based on competitive pricing. Of course,
being a rate leader allows for more flexibility.
7/28/2015 8:19 AM
226 ALCO Meetings discuss rate scenarios, risks, and strategies. 7/28/2015 8:16 AM
227 We have utilized our IRRM and capital planning during our budgeting process anticipating a 200bps rise during the
second half of this year. We targeted our balance sheet structure for 2015 in anticipation of this increase. We also are
consulting with an outside balance sheet structure advisor to assist with guiding us through the process.
7/28/2015 8:15 AM
7 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
228 We are working on an overall deposit strategy including utilizing our interest rate risk software to model scenarios, We
are also reviewing our assumptions in the model.
7/28/2015 7:54 AM
229 Discussions are being held with the ALM personnel and loan officers 7/28/2015 7:53 AM
230 Continue to discuss with lending, investments, and deposits the inevitable rise in rates. No set process is in place in
any department but we are ready to monitor rate activity and respond accorsingly.
7/28/2015 7:45 AM
231 board, loan committee 7/28/2015 7:38 AM
232 Discuss the timeline and evaluate possible responses. Much leadership here is coming from accounting/operations,
with minimal input from lending or deposits. We plan to follow a closely managed strategy focused on the ALM aspect
of rate increase decisions. Competitively we also want to be aware of what other institutions are doing, and have plans
tied to decisions other institutions start to make.
7/28/2015 7:35 AM
233 Making each area of the operation aware of what is the best practices for handling the increase. Be aware of what the
competition is doing, use history as a means to gauge what the potential ways of dealing with this increase can have
to the organization.
7/28/2015 7:25 AM
234 We discuss at ALCO. We have evaluated the sensitivity to our deposits to interest rates. We are looking at different
scenarios as to the impact an increase in rates could have on our institution.
7/28/2015 7:23 AM
235 Still in discussion phase. 7/28/2015 6:51 AM
236 Strategic Plan Team and Board of Directors 7/28/2015 6:46 AM
237 We have always monitored area competitor rates and terms. We are considering different products to appeal to
customers during rising rate periods.
7/28/2015 6:44 AM
238 senior management is meeting to discuss 7/28/2015 6:40 AM
239 Expanding variability to our loan portfolio and buying fixed rate mid term deposits 7/28/2015 6:12 AM
240 core funding vs. non-core funding and the cost benefit between core and non-core funding and the speed at which we
can raise funds; selling loans;
7/27/2015 8:39 PM
241 At management and board ARCO, we have open discussion, and make decisions on future rates, DDA increase,
offering longer term CDs, or other funding decisions.
7/27/2015 8:09 PM
242 Reviewing the history of our rate sensitive accounts to predict how many will change, along with the fact we will only
move a percentage of the increase
7/27/2015 7:09 PM
243 reviewing projected non maturity account volitility reviewing interest rate risk reports 7/27/2015 6:57 PM
244 We talk about how and when we think rates will change and how to react to that in our normal ALCO process. 7/27/2015 6:29 PM
245 We meet monthly to discuss this. 7/27/2015 5:52 PM
246 We check other financial institutions rates on a regular basis 7/27/2015 5:45 PM
247 Handled through ALCO. 7/27/2015 5:34 PM
248 Review forecasting by market research analysts, senior management meetings, 7/27/2015 5:07 PM
249 An informal strategy of shorter rate investment purchases and closely scrutinizing loan maturities/repricing schedules
over 5 years in length.
7/27/2015 5:00 PM
250 Developed in our Asset & Liability regular meeting 7/27/2015 4:56 PM
251 Discussions with senior management staff 7/27/2015 4:54 PM
252 We administer our rates-as such have spent time revisiing our review sheets pertaining to competition and have
planed-we are a fiscal c.u. for a rising rate (ie: slower than in the past) starting in September with majority of changes
in the shorter term deposit products. Additionally, we continually run IRR ALM reviews on a number of different levels.
Key component is a defensive posture.
7/27/2015 4:53 PM
253 The ALCO discusses strategy for different rate scenarios, evaluating deposit retention and growth goals along with
cost.
7/27/2015 4:49 PM
254 As rates rise, realization that not all deposits are rate sensitive and developing products and stratgies to accomodate
this fact
7/27/2015 4:45 PM
255 We watch the rates weekly both on the cd market and also the bond market. We have already moved some of out
loan rates up in anticipation of the increases
7/27/2015 4:43 PM
256 We kept our powder dry so the lenders can keep on making fixed rate term loans. 7/27/2015 4:43 PM
8 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
257 Quarterly evaluations of Financial Management Assessment and Strategy with our Investment Adviser. 7/27/2015 4:42 PM
258 Overall modeling in ALCO, followed with discussions in our Risk Management Committee 7/27/2015 4:41 PM
259 none yet 7/27/2015 4:34 PM
260 We have this discussion in our Asset Liability Committee Meetings. 7/27/2015 4:34 PM
261 Confidential - Too much competition on every corner. 7/27/2015 4:26 PM
262 We have a strategy and a policy. All our loan products are either adjustable rate or short term. Deposits will be priced
to retain or attract funds as we need. We will be able to afford deposits since our loan rates will rise with deposits.
7/27/2015 4:21 PM
263 Discussions with Board and executive management 7/27/2015 4:20 PM
264 Discussion is occurring at the Pricing Committee and ALCO levels 7/27/2015 4:19 PM
265 Asset Liability committee is reviewing data, reports, and forecasting potential scenarios and working on developing a
strategy.
7/27/2015 4:18 PM
266 Driven through ALCO 7/27/2015 4:17 PM
267 Community Valley Bank is already paying the highest Money Market rate than any of our peers. We are so much
higher that it will take a 100 basis point increase for us to move our rates at all.
7/27/2015 4:16 PM
268 Review interest rate sensitivity measurements and studying deposit betas 7/27/2015 4:16 PM
269 Meeting Monthly and including as a topic in our Pricing & Product Committee. 7/27/2015 4:15 PM
270 We are using interest rate hedging products for loan maturities greater that 3 years. We have maintained a short
horizon for investments. Not much change yet on deposit terms and pricing.
7/27/2015 4:14 PM
271 Executive considers current & forecast market conditions to arrive at an expected course of action. 7/27/2015 4:12 PM
272 We model in the impact and have been for some time. We have built a balance sheet that can withstand the impact
over time. Initially, it will be a little painful.
7/27/2015 4:09 PM
273 Performing deposit study and identifting areas of risk especially in the area of liquidity 7/27/2015 4:08 PM
274 Work with our ALM provider 7/27/2015 4:08 PM
275 Monitoring deposit levels and current loan activity 7/27/2015 4:05 PM
276 Creating shorter term variable products on the loan side 7/27/2015 4:04 PM
277 Internal Discussions, competitive analysis 7/27/2015 4:02 PM
278 ALCO meetings; monthly executive sessions; marketing meetings 7/27/2015 4:01 PM
279 Trhough the ALCO process 7/27/2015 4:00 PM
280 We have rate shocked the balance sheet and are looking at product lines with appropriate levels of management. 7/27/2015 3:58 PM
281 ALCO meetings 7/27/2015 3:58 PM
282 Review prior rate hiking cycle for deposit rates. Look closely at rate shocks and both loans and deposit rates used. 7/27/2015 3:57 PM
283 Tracking member certificate maturities, lessening participation in 30 year mortgages, review penatly structure. 7/27/2015 3:56 PM
284 We have tried to maintain a neutral balance sheet through this low rate environment and we run a marginal pricing
report every couple of weeks to ensure our balance sheet maintains as neutral a position as possible.
7/27/2015 3:54 PM
285 ALCO meetings 7/27/2015 3:54 PM
286 We have been monitoring and discussing for a couple of years already. We have pulled additional reports on our floors,
spreads, etc on loans and the impact of the rising rates at various levels. Discussed penalties on CD's, effect of
moving of core deposits,etc.
7/27/2015 3:53 PM
287 Centralized process - top down 7/27/2015 3:52 PM
288 Study of deposit member behaviors and attempting to determine what core members we have 7/27/2015 3:51 PM
289 The strategy has been to keep long-term assets to a minimum. 7/27/2015 3:50 PM
290 Discussions revolve around lagging share rates and moving loan rates as fast as possible to keep from being squezed
by compression
7/27/2015 3:48 PM
291 Shortening repricing periods on loans and increasing margins on loan rate indexes. 7/27/2015 3:48 PM
9 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
292 N/A 7/27/2015 3:48 PM
293 Discussion at monthly executive comm meetings as well as quarterly ALCO meetings 7/27/2015 3:46 PM
294 Increase duration of liabilities using FHLB Advances and longer term CDs. Shorten asset maturities. 7/27/2015 3:46 PM
295 Liquidity and product discussions are centered in the ALM Committee 7/27/2015 3:45 PM
296 Possible new Certificate specials, reviewing all available liquidity lines if share leave rapidly. 7/27/2015 3:44 PM
297 We will continue to attempt to match any increases in funding costs with loan yields in an attempt to maintain margins 7/27/2015 3:44 PM
298 3rd party and in-house 7/27/2015 3:43 PM
299 Constant discussions at ALCO 7/27/2015 3:42 PM
300 Model different potential rate paths and ensure that the bank can thrive in all scenarios 7/27/2015 3:42 PM
301 We are building it into our planning process and looking at options from all sides. 7/27/2015 3:41 PM
302 Pricing discussions, ALCO presentations, income simulation shock analysis 7/27/2015 3:41 PM
303 We are projecting the additional expense curve against the anticipated rate of change for dividends and correlating
that with the ability to increase lending rates over the same time period.l
7/27/2015 3:40 PM
304 ALM modeling and budgets 7/27/2015 3:40 PM
305 We are evaluating our long term portfolio and the deposits and working on different scenarios. 7/27/2015 3:39 PM
306 management discussion to focus on identifying more variable rate opportunities. 7/27/2015 3:39 PM
307 Possible of new checking product that pays a higher rate of interest provided the customer does various activiites such
a on-line banking, direct deposit and multiple debit transaction, and estatements.
7/27/2015 3:38 PM
308 for the past 4 years we have been offering variable consumer loans including all vehicles, equities, personal and
student products. we are looking forward to the increase.
7/27/2015 3:38 PM
309 brainstorming among senior executives with some input from the Board level. 7/27/2015 3:36 PM
310 EXPANSION OF PRODUCTS AND SERVICES REVIEWING ALL CHARGES 7/27/2015 3:35 PM
311 More aggressive pricing on shorter term amortizing loan products, and mid term certificates 7/27/2015 3:35 PM
312 Financial modeling and discussin through the ALCO process 7/27/2015 3:34 PM
313 Management Meeting discussions and consultation with outside vendors with regard to effect of rising rates on our
current balance sheet.
7/27/2015 3:33 PM
314 Risk discussed and quantified at the ERM, ALCO, and board level to determine amount of tolerable risk and then
presentation to the same group as to the plan to address the residual risk.
7/27/2015 3:33 PM
315 Sr. management meeting weekly to discuss investment portfolio strategies and also loan pricing strategies. 7/27/2015 3:33 PM
316 We are discussing these issues through our ALCO and the Board. 7/27/2015 3:33 PM
317 Officers are urged to call on officers and employees of businesses presently served Providing CD's with the ability to
request a rate increase.
7/27/2015 3:32 PM
318 We are reviewing current rates, reviewing certificate rates and realizing we cannot have the highest rates but need to
assess our liquidity needs
7/27/2015 3:32 PM
319 Risk assessments for any new product. Committees looking at alternatives. 7/27/2015 3:32 PM
320 basic modeling at different rate increases 7/27/2015 3:32 PM
321 Pricing discussion for both earning assets and funding sources 7/27/2015 3:32 PM
322 we have discussed deposit and loan rates as well as duration 7/27/2015 3:29 PM
323 Tiered deposit products 7/27/2015 3:29 PM
324 Possibility changing CD terms and early withdrawal penalties 7/27/2015 3:28 PM
325 Begin by brainstorming 7/27/2015 3:28 PM
326 segmenatation 7/27/2015 3:27 PM
327 Currently we have 3 different committees developing strategies. We then meet monthly to discuss each strategy and
how they overlap and how they affect the customer.
7/27/2015 3:25 PM
10 / 13
Preparations in the Face of a Rising Rate Environment
257 Quarterly evaluations of Financial Management Assessment and Strategy with our Investment Adviser. 7/27/2015 4:42 PM
258 Overall modeling in ALCO, followed with discussions in our Risk Management Committee 7/27/2015 4:41 PM
259 none yet 7/27/2015 4:34 PM
260 We have this discussion in our Asset Liability Committee Meetings. 7/27/2015 4:34 PM
261 Confidential - Too much competition on every corner. 7/27/2015 4:26 PM
262 We have a strategy and a policy. All our loan products are either adjustable rate or short term. Deposits will be priced
to retain or attract funds as we need. We will be able to afford deposits since our loan rates will rise with deposits.
7/27/2015 4:21 PM
263 Discussions with Board and executive management 7/27/2015 4:20 PM
264 Discussion is occurring at the Pricing Committee and ALCO levels 7/27/2015 4:19 PM
265 Asset Liability committee is reviewing data, reports, and forecasting potential scenarios and working on developing a
strategy.
7/27/2015 4:18 PM
266 Driven through ALCO 7/27/2015 4:17 PM
267 Community Valley Bank is already paying the highest Money Market rate than any of our peers. We are so much
higher that it will take a 100 basis point increase for us to move our rates at all.
7/27/2015 4:16 PM
268 Review interest rate sensitivity measurements and studying deposit betas 7/27/2015 4:16 PM
269 Meeting Monthly and including as a topic in our Pricing & Product Committee. 7/27/2015 4:15 PM
270 We are using interest rate hedging products for loan maturities greater that 3 years. We have maintained a short
horizon for investments. Not much change yet on deposit terms and pricing.
7/27/2015 4:14 PM
271 Executive considers current & forecast market conditions to arrive at an expected course of action. 7/27/2015 4:12 PM
272 We model in the impact and have been for some time. We have built a balance sheet that can withstand the impact
over time. Initially, it will be a little painful.
7/27/2015 4:09 PM
273 Performing deposit study and identifting areas of risk especially in the area of liquidity 7/27/2015 4:08 PM
274 Work with our ALM provider 7/27/2015 4:08 PM
275 Monitoring deposit levels and current loan activity 7/27/2015 4:05 PM
276 Creating shorter term variable products on the loan side 7/27/2015 4:04 PM
277 Internal Discussions, competitive analysis 7/27/2015 4:02 PM
278 ALCO meetings; monthly executive sessions; marketing meetings 7/27/2015 4:01 PM
279 Trhough the ALCO process 7/27/2015 4:00 PM
280 We have rate shocked the balance sheet and are looking at product lines with appropriate levels of management. 7/27/2015 3:58 PM
281 ALCO meetings 7/27/2015 3:58 PM
282 Review prior rate hiking cycle for deposit rates. Look closely at rate shocks and both loans and deposit rates used. 7/27/2015 3:57 PM
283 Tracking member certificate maturities, lessening participation in 30 year mortgages, review penatly structure. 7/27/2015 3:56 PM
284 We have tried to maintain a neutral balance sheet through this low rate environment and we run a marginal pricing
report every couple of weeks to ensure our balance sheet maintains as neutral a position as possible.
7/27/2015 3:54 PM
285 ALCO meetings 7/27/2015 3:54 PM
286 We have been monitoring and discussing for a couple of years already. We have pulled additional reports on our floors,
spreads, etc on loans and the impact of the rising rates at various levels. Discussed penalties on CD's, effect of
moving of core deposits,etc.
7/27/2015 3:53 PM
287 Centralized process - top down 7/27/2015 3:52 PM
288 Study of deposit member behaviors and attempting to determine what core members we have 7/27/2015 3:51 PM
289 The strategy has been to keep long-term assets to a minimum. 7/27/2015 3:50 PM
290 Discussions revolve around lagging share rates and moving loan rates as fast as possible to keep from being squezed
by compression
7/27/2015 3:48 PM
291 Shortening repricing periods on loans and increasing margins on loan rate indexes. 7/27/2015 3:48 PM
9 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
328 we have set up a project team to look at all of our products and services over a three year period, this started well over
a year ago.
7/27/2015 3:25 PM
329 Quarterly Shock Test and Semi Annual Asset Liability Management Review. 7/27/2015 3:25 PM
330 1. Historical perspective 2. Professional analytics 3. General discussion 7/27/2015 3:24 PM
331 Ongoing ALM discussion, including risk management and pricing strategies. 7/27/2015 3:24 PM
332 Interest Rate Risk Forecast 7/27/2015 3:24 PM
333 Reviewing our current product offerings and look at the competition products 7/27/2015 3:22 PM
334 Bank ALM committee is formulating deposit strategies including new products 7/27/2015 3:21 PM
335 Discussions at management meetings and forecasting. 7/27/2015 3:21 PM
336 We market our certificate rates to attract longer member investments with the credit union. Doing it now in order to
gain ground on deposits to keep up with loan demands.
7/27/2015 3:19 PM
337 Collateral vs. unsecured; liquidity of borrower; capital - the ability of the borrower to withstand a rising rate
environment.
7/27/2015 3:16 PM
338 1. Updated our core deposit study 2. run most likely and worst case scenarios 3. develop strategies based on results 7/27/2015 3:16 PM
339 Segregating our NMD to determine who is interest sensitive and who is not. 7/27/2015 3:12 PM
340 meeting with consultants, board and retail management. 7/27/2015 3:11 PM
341 In-house modeling 7/27/2015 3:10 PM
342 ALM and management meeting discussions 7/27/2015 3:08 PM
343 Have multiple meetings to brainstorm ideas and risks. Develop recommendations and submit to ALCO 7/27/2015 3:07 PM
344 Discussing in ALCO 7/27/2015 3:07 PM
345 We have pricing strategies in place for both rising and falling rate environments. We review those strategies but rarely
change them, but we are ready when or if rates rise.
7/27/2015 3:04 PM
346 maintain awareness of local prices and changes discussions with outside parties and consultants modeling of various
scenarios
7/27/2015 3:03 PM
347 Already developed 7/27/2015 3:03 PM
348 We analyze our gap on our assets vs. our liabilities and figure out what type of "lag" time we will need to maintain our
margins.
7/27/2015 3:02 PM
349 Review of our ALM strategy and completing "what ifs" to determine costs of implementing different strategies 7/27/2015 3:02 PM
350 Financial advisors 7/27/2015 3:02 PM
351 Our discussions have been held in the ALCO committee to determine our strategy going forward. 7/27/2015 3:01 PM
352 We communicate with different department supervisors for what is in the pipeline and limits per Regulations or internal
limits.
7/27/2015 3:01 PM
353 Part of ALCO agenda 7/27/2015 3:01 PM
354 Looking at current relationships 7/27/2015 3:01 PM
355 Reviewing deposit accounts weekly, interest rate risk models, looking for higher yielding loans to cover the cost of
funds.
7/27/2015 3:00 PM
356 This is handled by our funds management committee. 7/27/2015 3:00 PM
357 Working on past historical trends in last rising rate environment and comparing to various competitor trends. 7/27/2015 3:00 PM
358 Discussions with ALCO. Review of maturity schedules in bond portfolio. 7/27/2015 3:00 PM
359 Discussions with commercial and mortgage lenders, the investment side, and branch administration. 7/27/2015 2:59 PM
360 reviewing market position on key loan and deposit rates, anticipating where growth will start, trying to identify sources
of least resistance to rate increases
7/27/2015 2:59 PM
361 Pricing meetings/ALCO Meetings 7/27/2015 2:59 PM
362 Lengthening funding combined with the sale of L/T Assets 7/27/2015 2:59 PM
11 / 13
Preparations in the Face of a Rising Rate Environment
292 N/A 7/27/2015 3:48 PM
293 Discussion at monthly executive comm meetings as well as quarterly ALCO meetings 7/27/2015 3:46 PM
294 Increase duration of liabilities using FHLB Advances and longer term CDs. Shorten asset maturities. 7/27/2015 3:46 PM
295 Liquidity and product discussions are centered in the ALM Committee 7/27/2015 3:45 PM
296 Possible new Certificate specials, reviewing all available liquidity lines if share leave rapidly. 7/27/2015 3:44 PM
297 We will continue to attempt to match any increases in funding costs with loan yields in an attempt to maintain margins 7/27/2015 3:44 PM
298 3rd party and in-house 7/27/2015 3:43 PM
299 Constant discussions at ALCO 7/27/2015 3:42 PM
300 Model different potential rate paths and ensure that the bank can thrive in all scenarios 7/27/2015 3:42 PM
301 We are building it into our planning process and looking at options from all sides. 7/27/2015 3:41 PM
302 Pricing discussions, ALCO presentations, income simulation shock analysis 7/27/2015 3:41 PM
303 We are projecting the additional expense curve against the anticipated rate of change for dividends and correlating
that with the ability to increase lending rates over the same time period.l
7/27/2015 3:40 PM
304 ALM modeling and budgets 7/27/2015 3:40 PM
305 We are evaluating our long term portfolio and the deposits and working on different scenarios. 7/27/2015 3:39 PM
306 management discussion to focus on identifying more variable rate opportunities. 7/27/2015 3:39 PM
307 Possible of new checking product that pays a higher rate of interest provided the customer does various activiites such
a on-line banking, direct deposit and multiple debit transaction, and estatements.
7/27/2015 3:38 PM
308 for the past 4 years we have been offering variable consumer loans including all vehicles, equities, personal and
student products. we are looking forward to the increase.
7/27/2015 3:38 PM
309 brainstorming among senior executives with some input from the Board level. 7/27/2015 3:36 PM
310 EXPANSION OF PRODUCTS AND SERVICES REVIEWING ALL CHARGES 7/27/2015 3:35 PM
311 More aggressive pricing on shorter term amortizing loan products, and mid term certificates 7/27/2015 3:35 PM
312 Financial modeling and discussin through the ALCO process 7/27/2015 3:34 PM
313 Management Meeting discussions and consultation with outside vendors with regard to effect of rising rates on our
current balance sheet.
7/27/2015 3:33 PM
314 Risk discussed and quantified at the ERM, ALCO, and board level to determine amount of tolerable risk and then
presentation to the same group as to the plan to address the residual risk.
7/27/2015 3:33 PM
315 Sr. management meeting weekly to discuss investment portfolio strategies and also loan pricing strategies. 7/27/2015 3:33 PM
316 We are discussing these issues through our ALCO and the Board. 7/27/2015 3:33 PM
317 Officers are urged to call on officers and employees of businesses presently served Providing CD's with the ability to
request a rate increase.
7/27/2015 3:32 PM
318 We are reviewing current rates, reviewing certificate rates and realizing we cannot have the highest rates but need to
assess our liquidity needs
7/27/2015 3:32 PM
319 Risk assessments for any new product. Committees looking at alternatives. 7/27/2015 3:32 PM
320 basic modeling at different rate increases 7/27/2015 3:32 PM
321 Pricing discussion for both earning assets and funding sources 7/27/2015 3:32 PM
322 we have discussed deposit and loan rates as well as duration 7/27/2015 3:29 PM
323 Tiered deposit products 7/27/2015 3:29 PM
324 Possibility changing CD terms and early withdrawal penalties 7/27/2015 3:28 PM
325 Begin by brainstorming 7/27/2015 3:28 PM
326 segmenatation 7/27/2015 3:27 PM
327 Currently we have 3 different committees developing strategies. We then meet monthly to discuss each strategy and
how they overlap and how they affect the customer.
7/27/2015 3:25 PM
10 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
363 Individual discussions with business line managers and then group discussions with all managers. This will be
something that affects every area of our company.
7/27/2015 2:58 PM
364 run simulation models for different interest rate hikes 7/27/2015 2:58 PM
365 Management team discussions and ALM policy 7/27/2015 2:58 PM
366 Discussions and analysis through key Committees and Board. 7/27/2015 2:58 PM
367 working with our ALCO Committee and plan on discussing with leveraged borrowers one on one. 7/27/2015 2:57 PM
368 management discussion 7/27/2015 2:56 PM
369 discussion of specific actions to be taken when rates increase 25bp, 50bp, etc. 7/27/2015 2:54 PM
370 Reviewing Competitve Rates and fee structures 7/27/2015 2:54 PM
371 We use quarterly interest rate risk reports to fine tune our plan. 7/27/2015 2:53 PM
372 As a small institution, we involve members from Finance, Lending, Investments, and capital planning 7/27/2015 2:53 PM
373 Reviewing maturing CD rates and competitor rates. 7/27/2015 2:52 PM
374 Our focus is on keeping loan rates variable and pricing within the short side of the yield curve. 7/27/2015 2:46 PM
375 Our ALCO committee meets regularly. Discussions on funding sources as well as investment opportunities are had. 7/27/2015 2:44 PM
376 ALCO Committee to look at other lending and depository products in a increasing rate environment. 7/27/2015 2:43 PM
377 Be prepared for all interest rate changes and unchanged rate scenarios. 7/6/2015 9:14 PM
378 CFO initiates discussions / meetings 6/29/2015 1:25 PM
379 Generally, lag non-maturity deposit rates, as short term rates rise. Developed tiered money market product which will
have higher rates than our current tiered money market account. To be used offensively for key customers and
defensively for rate sensitive customers. Review deposit strategy with board, retail and commercial bankers.
6/23/2015 11:35 AM
380 Ongoing discussions with commercial and consumer loan discount committees. Discussions with branch managers on
deposit rate exceptions.
6/23/2015 10:23 AM
381 We closely monitor the big banks and always want to offer something better than they do. Our loan rates are closely
tied tour savings rates and dependent upon each other.
6/23/2015 10:04 AM
382 We will pay higher interest on deposits first and follow with loans more slowly. 6/23/2015 9:07 AM
383 these are generally held at the department meetings and Loan Committee meetings 6/23/2015 8:34 AM
384 We have a pricing committe that meets on a regular basis and makes recomendations to the senior managment group. 6/22/2015 4:17 PM
385 On the asset side, we are trying to focus on shorter term loans with variable interest rates. On the liability side we are
affering specials on five year cds.
6/22/2015 2:05 PM
386 Monthly review with ALCO group, and modeling and forecasting with ALM software. 6/22/2015 1:27 PM
387 Review with both Rate Committee and Marketing committee with reps from all key areas. 6/22/2015 12:28 PM
388 - Comparing our current Deposit mix to that of pre 2008. - Continued focus on core deposit growth - Looking at
alternative funding sources
6/22/2015 12:11 PM
389 We work with C. Meyers to complete "What If" analysis in a risking rate environment. 6/22/2015 11:05 AM
390 Discussions have just started. No formal strategy is in place at this time. 6/22/2015 10:38 AM
391 Weekly discussions with our ALCO team 6/22/2015 10:35 AM
392 Currently discussing with senior management 6/22/2015 10:29 AM
393 We are currently developing a bump rate cd. 6/22/2015 10:24 AM
394 We continue to invest but are looking for shorter terms for our investments. Rates are starting to rise a little or the 4 to
5 year investments, both agencies and other bank CD's.
6/22/2015 10:16 AM
395 We are doing different scenarios in our ALM software to judge certain effects. 6/22/2015 10:14 AM
396 Many. Many meetings. Discuss possible asset alternatives. 6/22/2015 10:14 AM
397 We developed a committee and are strategizing our options based on our current accounts, rates and balances 6/19/2015 3:42 PM
12 / 13
Preparations in the Face of a Rising Rate Environment
328 we have set up a project team to look at all of our products and services over a three year period, this started well over
a year ago.
7/27/2015 3:25 PM
329 Quarterly Shock Test and Semi Annual Asset Liability Management Review. 7/27/2015 3:25 PM
330 1. Historical perspective 2. Professional analytics 3. General discussion 7/27/2015 3:24 PM
331 Ongoing ALM discussion, including risk management and pricing strategies. 7/27/2015 3:24 PM
332 Interest Rate Risk Forecast 7/27/2015 3:24 PM
333 Reviewing our current product offerings and look at the competition products 7/27/2015 3:22 PM
334 Bank ALM committee is formulating deposit strategies including new products 7/27/2015 3:21 PM
335 Discussions at management meetings and forecasting. 7/27/2015 3:21 PM
336 We market our certificate rates to attract longer member investments with the credit union. Doing it now in order to
gain ground on deposits to keep up with loan demands.
7/27/2015 3:19 PM
337 Collateral vs. unsecured; liquidity of borrower; capital - the ability of the borrower to withstand a rising rate
environment.
7/27/2015 3:16 PM
338 1. Updated our core deposit study 2. run most likely and worst case scenarios 3. develop strategies based on results 7/27/2015 3:16 PM
339 Segregating our NMD to determine who is interest sensitive and who is not. 7/27/2015 3:12 PM
340 meeting with consultants, board and retail management. 7/27/2015 3:11 PM
341 In-house modeling 7/27/2015 3:10 PM
342 ALM and management meeting discussions 7/27/2015 3:08 PM
343 Have multiple meetings to brainstorm ideas and risks. Develop recommendations and submit to ALCO 7/27/2015 3:07 PM
344 Discussing in ALCO 7/27/2015 3:07 PM
345 We have pricing strategies in place for both rising and falling rate environments. We review those strategies but rarely
change them, but we are ready when or if rates rise.
7/27/2015 3:04 PM
346 maintain awareness of local prices and changes discussions with outside parties and consultants modeling of various
scenarios
7/27/2015 3:03 PM
347 Already developed 7/27/2015 3:03 PM
348 We analyze our gap on our assets vs. our liabilities and figure out what type of "lag" time we will need to maintain our
margins.
7/27/2015 3:02 PM
349 Review of our ALM strategy and completing "what ifs" to determine costs of implementing different strategies 7/27/2015 3:02 PM
350 Financial advisors 7/27/2015 3:02 PM
351 Our discussions have been held in the ALCO committee to determine our strategy going forward. 7/27/2015 3:01 PM
352 We communicate with different department supervisors for what is in the pipeline and limits per Regulations or internal
limits.
7/27/2015 3:01 PM
353 Part of ALCO agenda 7/27/2015 3:01 PM
354 Looking at current relationships 7/27/2015 3:01 PM
355 Reviewing deposit accounts weekly, interest rate risk models, looking for higher yielding loans to cover the cost of
funds.
7/27/2015 3:00 PM
356 This is handled by our funds management committee. 7/27/2015 3:00 PM
357 Working on past historical trends in last rising rate environment and comparing to various competitor trends. 7/27/2015 3:00 PM
358 Discussions with ALCO. Review of maturity schedules in bond portfolio. 7/27/2015 3:00 PM
359 Discussions with commercial and mortgage lenders, the investment side, and branch administration. 7/27/2015 2:59 PM
360 reviewing market position on key loan and deposit rates, anticipating where growth will start, trying to identify sources
of least resistance to rate increases
7/27/2015 2:59 PM
361 Pricing meetings/ALCO Meetings 7/27/2015 2:59 PM
362 Lengthening funding combined with the sale of L/T Assets 7/27/2015 2:59 PM
11 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
363 Individual discussions with business line managers and then group discussions with all managers. This will be
something that affects every area of our company.
7/27/2015 2:58 PM
364 run simulation models for different interest rate hikes 7/27/2015 2:58 PM
365 Management team discussions and ALM policy 7/27/2015 2:58 PM
366 Discussions and analysis through key Committees and Board. 7/27/2015 2:58 PM
367 working with our ALCO Committee and plan on discussing with leveraged borrowers one on one. 7/27/2015 2:57 PM
368 management discussion 7/27/2015 2:56 PM
369 discussion of specific actions to be taken when rates increase 25bp, 50bp, etc. 7/27/2015 2:54 PM
370 Reviewing Competitve Rates and fee structures 7/27/2015 2:54 PM
371 We use quarterly interest rate risk reports to fine tune our plan. 7/27/2015 2:53 PM
372 As a small institution, we involve members from Finance, Lending, Investments, and capital planning 7/27/2015 2:53 PM
373 Reviewing maturing CD rates and competitor rates. 7/27/2015 2:52 PM
374 Our focus is on keeping loan rates variable and pricing within the short side of the yield curve. 7/27/2015 2:46 PM
375 Our ALCO committee meets regularly. Discussions on funding sources as well as investment opportunities are had. 7/27/2015 2:44 PM
376 ALCO Committee to look at other lending and depository products in a increasing rate environment. 7/27/2015 2:43 PM
377 Be prepared for all interest rate changes and unchanged rate scenarios. 7/6/2015 9:14 PM
378 CFO initiates discussions / meetings 6/29/2015 1:25 PM
379 Generally, lag non-maturity deposit rates, as short term rates rise. Developed tiered money market product which will
have higher rates than our current tiered money market account. To be used offensively for key customers and
defensively for rate sensitive customers. Review deposit strategy with board, retail and commercial bankers.
6/23/2015 11:35 AM
380 Ongoing discussions with commercial and consumer loan discount committees. Discussions with branch managers on
deposit rate exceptions.
6/23/2015 10:23 AM
381 We closely monitor the big banks and always want to offer something better than they do. Our loan rates are closely
tied tour savings rates and dependent upon each other.
6/23/2015 10:04 AM
382 We will pay higher interest on deposits first and follow with loans more slowly. 6/23/2015 9:07 AM
383 these are generally held at the department meetings and Loan Committee meetings 6/23/2015 8:34 AM
384 We have a pricing committe that meets on a regular basis and makes recomendations to the senior managment group. 6/22/2015 4:17 PM
385 On the asset side, we are trying to focus on shorter term loans with variable interest rates. On the liability side we are
affering specials on five year cds.
6/22/2015 2:05 PM
386 Monthly review with ALCO group, and modeling and forecasting with ALM software. 6/22/2015 1:27 PM
387 Review with both Rate Committee and Marketing committee with reps from all key areas. 6/22/2015 12:28 PM
388 - Comparing our current Deposit mix to that of pre 2008. - Continued focus on core deposit growth - Looking at
alternative funding sources
6/22/2015 12:11 PM
389 We work with C. Meyers to complete "What If" analysis in a risking rate environment. 6/22/2015 11:05 AM
390 Discussions have just started. No formal strategy is in place at this time. 6/22/2015 10:38 AM
391 Weekly discussions with our ALCO team 6/22/2015 10:35 AM
392 Currently discussing with senior management 6/22/2015 10:29 AM
393 We are currently developing a bump rate cd. 6/22/2015 10:24 AM
394 We continue to invest but are looking for shorter terms for our investments. Rates are starting to rise a little or the 4 to
5 year investments, both agencies and other bank CD's.
6/22/2015 10:16 AM
395 We are doing different scenarios in our ALM software to judge certain effects. 6/22/2015 10:14 AM
396 Many. Many meetings. Discuss possible asset alternatives. 6/22/2015 10:14 AM
397 We developed a committee and are strategizing our options based on our current accounts, rates and balances 6/19/2015 3:42 PM
12 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
363 Individual discussions with business line managers and then group discussions with all managers. This will be
something that affects every area of our company.
7/27/2015 2:58 PM
364 run simulation models for different interest rate hikes 7/27/2015 2:58 PM
365 Management team discussions and ALM policy 7/27/2015 2:58 PM
366 Discussions and analysis through key Committees and Board. 7/27/2015 2:58 PM
367 working with our ALCO Committee and plan on discussing with leveraged borrowers one on one. 7/27/2015 2:57 PM
368 management discussion 7/27/2015 2:56 PM
369 discussion of specific actions to be taken when rates increase 25bp, 50bp, etc. 7/27/2015 2:54 PM
370 Reviewing Competitve Rates and fee structures 7/27/2015 2:54 PM
371 We use quarterly interest rate risk reports to fine tune our plan. 7/27/2015 2:53 PM
372 As a small institution, we involve members from Finance, Lending, Investments, and capital planning 7/27/2015 2:53 PM
373 Reviewing maturing CD rates and competitor rates. 7/27/2015 2:52 PM
374 Our focus is on keeping loan rates variable and pricing within the short side of the yield curve. 7/27/2015 2:46 PM
375 Our ALCO committee meets regularly. Discussions on funding sources as well as investment opportunities are had. 7/27/2015 2:44 PM
376 ALCO Committee to look at other lending and depository products in a increasing rate environment. 7/27/2015 2:43 PM
377 Be prepared for all interest rate changes and unchanged rate scenarios. 7/6/2015 9:14 PM
378 CFO initiates discussions / meetings 6/29/2015 1:25 PM
379 Generally, lag non-maturity deposit rates, as short term rates rise. Developed tiered money market product which will
have higher rates than our current tiered money market account. To be used offensively for key customers and
defensively for rate sensitive customers. Review deposit strategy with board, retail and commercial bankers.
6/23/2015 11:35 AM
380 Ongoing discussions with commercial and consumer loan discount committees. Discussions with branch managers on
deposit rate exceptions.
6/23/2015 10:23 AM
381 We closely monitor the big banks and always want to offer something better than they do. Our loan rates are closely
tied tour savings rates and dependent upon each other.
6/23/2015 10:04 AM
382 We will pay higher interest on deposits first and follow with loans more slowly. 6/23/2015 9:07 AM
383 these are generally held at the department meetings and Loan Committee meetings 6/23/2015 8:34 AM
384 We have a pricing committe that meets on a regular basis and makes recomendations to the senior managment group. 6/22/2015 4:17 PM
385 On the asset side, we are trying to focus on shorter term loans with variable interest rates. On the liability side we are
affering specials on five year cds.
6/22/2015 2:05 PM
386 Monthly review with ALCO group, and modeling and forecasting with ALM software. 6/22/2015 1:27 PM
387 Review with both Rate Committee and Marketing committee with reps from all key areas. 6/22/2015 12:28 PM
388 - Comparing our current Deposit mix to that of pre 2008. - Continued focus on core deposit growth - Looking at
alternative funding sources
6/22/2015 12:11 PM
389 We work with C. Meyers to complete "What If" analysis in a risking rate environment. 6/22/2015 11:05 AM
390 Discussions have just started. No formal strategy is in place at this time. 6/22/2015 10:38 AM
391 Weekly discussions with our ALCO team 6/22/2015 10:35 AM
392 Currently discussing with senior management 6/22/2015 10:29 AM
393 We are currently developing a bump rate cd. 6/22/2015 10:24 AM
394 We continue to invest but are looking for shorter terms for our investments. Rates are starting to rise a little or the 4 to
5 year investments, both agencies and other bank CD's.
6/22/2015 10:16 AM
395 We are doing different scenarios in our ALM software to judge certain effects. 6/22/2015 10:14 AM
396 Many. Many meetings. Discuss possible asset alternatives. 6/22/2015 10:14 AM
397 We developed a committee and are strategizing our options based on our current accounts, rates and balances 6/19/2015 3:42 PM
12 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
398 Through the Asset-Liability Committee discussions are focused on "parked" deposits - excess balances over/above
normal amounts. Do we want/need to retain, other funding sources, etc
6/19/2015 1:32 PM
399 Detailed analysis of various portfolio segments, market intel and regular discussion at ALCO. 6/18/2015 8:23 AM
400 Determining the bank's sensitivity to rising rates through ALCO and placing the appropriate focus on products that are
well positioned for rising rates
6/15/2015 3:56 PM
401 currently our discussions are restricted to our asset and liability committee meetings 6/15/2015 2:56 PM
402 We're using historic informaiton to view and identify rate sensitive portions of our portfolio on a geographic level in
addition to reviewing historic industry trends and future outlooks. Main focus in on developing the beta between rate
moves at the Fed level, the industry level, and then for us and then deciding where we will lead and where we will lag,
and what this means to our financials.
6/15/2015 2:29 PM
403 Our executive team and board work with an asset/liability management consulting firm that provides us with updated
models quarterly.
6/15/2015 12:58 PM
404 1) Watching maturating certificates 2) Monitoring flow of dollars in liquid funds 3) Monitoring dollar amount of 30 yr
mortgage - balance and rates
6/15/2015 11:54 AM
405 Senior Mgmt team meets with ALCO 6/15/2015 11:09 AM
406 Monthly pricing committee meetings. 6/15/2015 10:39 AM
407 reviewing in alco with concentration on need of funds 6/15/2015 10:27 AM
408 We review our strategy quarterly primarily with loan and deposit operations. 6/15/2015 9:42 AM
409 Discussions will start with the ALCO committee. 6/15/2015 9:23 AM
410 internal discussions with our key business leaders 6/15/2015 9:17 AM
411 Task force assembled that meets regularly to discuss strategic goals and milestones. 6/15/2015 8:55 AM
412 We review rate shocks no less than quarterly so are consistently aware of how interest rate movement will affect
income.
6/15/2015 8:15 AM
413 promoting variable rate products, testing systems for quick reaction to changing our pricing 6/15/2015 8:13 AM
414 rate strategies are discussed in ALCO 6/15/2015 7:57 AM
415 Senior management is addressing the issues. 6/15/2015 7:49 AM
416 We have been planning for some time by extending duration on the liability side of the balance sheet and we have
begun a calling program for all CD and MMA customers with balances over $250,000.
6/15/2015 7:32 AM
417 our main market is auto loans; building member loyalty for other types of financing 6/13/2015 5:56 PM
418 What-if analyses, shock tests, portfolio trending 6/12/2015 7:27 PM
419 Working with our ALCO team and consultants to develop a strategy 6/12/2015 4:22 PM
420 Identifying large deposit accounts as these are typically comprised of "hot money" and are rate chasers. looking at
strategically segmenting.
6/12/2015 4:09 PM
421 We discuss it monthly at our ALCO meeting, on the strategy that we might take. 6/12/2015 3:57 PM
422 We have been discussing indicators and expectations for a significant period and will continue to do so. 6/12/2015 3:47 PM
423 RIght now this is still at the senior management level. We will soon discuss with deposit development areas. 6/12/2015 3:30 PM
424 I chair a Products and Services Committee, as well as a Treasury Management Committee, and we are in the
beginning stage of developing strategies in those arenas.
6/12/2015 3:08 PM
425 At our ALM meetings we are reviewing as discussing potential strategies 6/12/2015 3:06 PM
426 Discussion at monthly ALCO meetings 6/12/2015 3:05 PM
13 / 13
Preparations in the Face of a Rising Rate Environment
398 Through the Asset-Liability Committee discussions are focused on "parked" deposits - excess balances over/above
normal amounts. Do we want/need to retain, other funding sources, etc
6/19/2015 1:32 PM
399 Detailed analysis of various portfolio segments, market intel and regular discussion at ALCO. 6/18/2015 8:23 AM
400 Determining the bank's sensitivity to rising rates through ALCO and placing the appropriate focus on products that are
well positioned for rising rates
6/15/2015 3:56 PM
401 currently our discussions are restricted to our asset and liability committee meetings 6/15/2015 2:56 PM
402 We're using historic informaiton to view and identify rate sensitive portions of our portfolio on a geographic level in
addition to reviewing historic industry trends and future outlooks. Main focus in on developing the beta between rate
moves at the Fed level, the industry level, and then for us and then deciding where we will lead and where we will lag,
and what this means to our financials.
6/15/2015 2:29 PM
403 Our executive team and board work with an asset/liability management consulting firm that provides us with updated
models quarterly.
6/15/2015 12:58 PM
404 1) Watching maturating certificates 2) Monitoring flow of dollars in liquid funds 3) Monitoring dollar amount of 30 yr
mortgage - balance and rates
6/15/2015 11:54 AM
405 Senior Mgmt team meets with ALCO 6/15/2015 11:09 AM
406 Monthly pricing committee meetings. 6/15/2015 10:39 AM
407 reviewing in alco with concentration on need of funds 6/15/2015 10:27 AM
408 We review our strategy quarterly primarily with loan and deposit operations. 6/15/2015 9:42 AM
409 Discussions will start with the ALCO committee. 6/15/2015 9:23 AM
410 internal discussions with our key business leaders 6/15/2015 9:17 AM
411 Task force assembled that meets regularly to discuss strategic goals and milestones. 6/15/2015 8:55 AM
412 We review rate shocks no less than quarterly so are consistently aware of how interest rate movement will affect
income.
6/15/2015 8:15 AM
413 promoting variable rate products, testing systems for quick reaction to changing our pricing 6/15/2015 8:13 AM
414 rate strategies are discussed in ALCO 6/15/2015 7:57 AM
415 Senior management is addressing the issues. 6/15/2015 7:49 AM
416 We have been planning for some time by extending duration on the liability side of the balance sheet and we have
begun a calling program for all CD and MMA customers with balances over $250,000.
6/15/2015 7:32 AM
417 our main market is auto loans; building member loyalty for other types of financing 6/13/2015 5:56 PM
418 What-if analyses, shock tests, portfolio trending 6/12/2015 7:27 PM
419 Working with our ALCO team and consultants to develop a strategy 6/12/2015 4:22 PM
420 Identifying large deposit accounts as these are typically comprised of "hot money" and are rate chasers. looking at
strategically segmenting.
6/12/2015 4:09 PM
421 We discuss it monthly at our ALCO meeting, on the strategy that we might take. 6/12/2015 3:57 PM
422 We have been discussing indicators and expectations for a significant period and will continue to do so. 6/12/2015 3:47 PM
423 RIght now this is still at the senior management level. We will soon discuss with deposit development areas. 6/12/2015 3:30 PM
424 I chair a Products and Services Committee, as well as a Treasury Management Committee, and we are in the
beginning stage of developing strategies in those arenas.
6/12/2015 3:08 PM
425 At our ALM meetings we are reviewing as discussing potential strategies 6/12/2015 3:06 PM
426 Discussion at monthly ALCO meetings 6/12/2015 3:05 PM
13 / 13
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 1 (Question 2 Responses) Continued
Survey Results — Appendix
Q5 If so, what kind of products are you
developing?
Answered: 210 Skipped: 555
# Responses Date
1 At this time we don't foresee a new products or services, however we are not eliminating this option. We will re-
evaluate with how the industry reacts.
8/18/2015 1:19 PM
2 Step-up interest rate on loans. Up to five year term but the rate increases each year. Simplistic and not perfect but
customers like the initial low rate and it does give us a bit of a hedge
8/14/2015 10:07 AM
3 We have already developed ARM products 8/13/2015 11:04 AM
4 Business accounts 8/11/2015 1:27 PM
5 New deposit accounts. Need low cost deposits 8/11/2015 12:59 PM
6 High Yield checking 8/11/2015 10:28 AM
7 More digital products and services. 8/10/2015 6:42 PM
8 Credit Card 8/10/2015 5:06 PM
9 treasury management 8/10/2015 4:51 PM
10 New Money market account for rate sensitive customers 8/10/2015 3:49 PM
11 Non-Member deposit products, Step Up or Bump Up Deposit products. 8/10/2015 1:52 PM
12 Step Rate CDs; money market intro rates 8/10/2015 1:20 PM
13 Monthly fee for service accounts on the deposit side and adjustable loans 8/10/2015 1:00 PM
14 N/A 8/10/2015 12:29 PM
15 Technology based--Mobile banking specifically. 8/10/2015 10:21 AM
16 Step-up CD 8/10/2015 9:09 AM
17 48/84 month call certificate. 5 year ARM mortgages 8/10/2015 8:04 AM
18 Tiered rate products in the MMDA area, specials on CD's 8/10/2015 7:32 AM
19 More step up CD options and Premier savings 8/8/2015 9:45 PM
20 deposit products 8/8/2015 4:19 PM
21 This is early stage 8/8/2015 8:34 AM
22 Online loan aplications 8/7/2015 4:34 PM
23 New rate sensitive money market account. 8/7/2015 3:35 PM
24 New money market deposit account 8/7/2015 3:31 PM
25 Specific products have not been identified yet, but improvements to mobile delivery channels and lending products are
priority.
8/7/2015 2:59 PM
26 High interest checking 8/7/2015 2:55 PM
27 DDA tied to Debit card activity and electronic statements. 8/7/2015 2:21 PM
28 ARM products, consumer loan products, money market and cd promotional products 8/7/2015 2:16 PM
29 Not so much developing as emphasizing floating and flexible lending products. 8/7/2015 1:49 PM
30 Interest bearing Business Checking Accounts 8/7/2015 1:43 PM
31 Premium level products, relationship pricing 8/7/2015 1:37 PM
32 Short deposits term and long loan terms 8/7/2015 1:36 PM
33 2nd MMA account 8/7/2015 1:35 PM
1 / 6
Preparations in the Face of a Rising Rate EnvironmentQ2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses)
Survey Results — Appendix
Q5 If so, what kind of products are you
developing?
Answered: 210 Skipped: 555
# Responses Date
1 At this time we don't foresee a new products or services, however we are not eliminating this option. We will re-
evaluate with how the industry reacts.
8/18/2015 1:19 PM
2 Step-up interest rate on loans. Up to five year term but the rate increases each year. Simplistic and not perfect but
customers like the initial low rate and it does give us a bit of a hedge
8/14/2015 10:07 AM
3 We have already developed ARM products 8/13/2015 11:04 AM
4 Business accounts 8/11/2015 1:27 PM
5 New deposit accounts. Need low cost deposits 8/11/2015 12:59 PM
6 High Yield checking 8/11/2015 10:28 AM
7 More digital products and services. 8/10/2015 6:42 PM
8 Credit Card 8/10/2015 5:06 PM
9 treasury management 8/10/2015 4:51 PM
10 New Money market account for rate sensitive customers 8/10/2015 3:49 PM
11 Non-Member deposit products, Step Up or Bump Up Deposit products. 8/10/2015 1:52 PM
12 Step Rate CDs; money market intro rates 8/10/2015 1:20 PM
13 Monthly fee for service accounts on the deposit side and adjustable loans 8/10/2015 1:00 PM
14 N/A 8/10/2015 12:29 PM
15 Technology based--Mobile banking specifically. 8/10/2015 10:21 AM
16 Step-up CD 8/10/2015 9:09 AM
17 48/84 month call certificate. 5 year ARM mortgages 8/10/2015 8:04 AM
18 Tiered rate products in the MMDA area, specials on CD's 8/10/2015 7:32 AM
19 More step up CD options and Premier savings 8/8/2015 9:45 PM
20 deposit products 8/8/2015 4:19 PM
21 This is early stage 8/8/2015 8:34 AM
22 Online loan aplications 8/7/2015 4:34 PM
23 New rate sensitive money market account. 8/7/2015 3:35 PM
24 New money market deposit account 8/7/2015 3:31 PM
25 Specific products have not been identified yet, but improvements to mobile delivery channels and lending products are
priority.
8/7/2015 2:59 PM
26 High interest checking 8/7/2015 2:55 PM
27 DDA tied to Debit card activity and electronic statements. 8/7/2015 2:21 PM
28 ARM products, consumer loan products, money market and cd promotional products 8/7/2015 2:16 PM
29 Not so much developing as emphasizing floating and flexible lending products. 8/7/2015 1:49 PM
30 Interest bearing Business Checking Accounts 8/7/2015 1:43 PM
31 Premium level products, relationship pricing 8/7/2015 1:37 PM
32 Short deposits term and long loan terms 8/7/2015 1:36 PM
33 2nd MMA account 8/7/2015 1:35 PM
1 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
34 TBD 8/7/2015 1:24 PM
35 Higher Interest MMA's for large depositors. Different term CD's that automatically roll into a lower rate CD when they
mature.
8/7/2015 1:20 PM
36 We may look at offering a bump rate certificate 8/7/2015 1:10 PM
37 Different deposit products 8/7/2015 1:03 PM
38 New deposit products in case liquidity becomes an issue once rates begin to rise 8/7/2015 1:02 PM
39 adjustable pricing, deposit balance support for loan rate benefits, higher risk consumer loan focus, low down payment
mortgages with or without MI, concessions on fees for shorter business loan maturity
8/7/2015 12:54 PM
40 NA 8/7/2015 12:40 PM
41 TBD 8/7/2015 12:35 PM
42 Premium Money Market Account 8/7/2015 12:16 PM
43 longer term certificates of deposit at higher rates 8/7/2015 12:16 PM
44 Deposit and loan products 8/7/2015 12:11 PM
45 different types of adjustable mortgages such as different terms on ARMS 8/7/2015 12:04 PM
46 Bump Up CD's, High Yield Money Market Accounts 8/7/2015 12:04 PM
47 -1-4 family mortgage for portfolio and secondary market -commercial lending -merchant lending -private student loans 8/7/2015 12:02 PM
48 Rewards checking and savings. 8/7/2015 12:00 PM
49 money market high yield targeted to rate hoppers. 8/7/2015 11:56 AM
50 adjusting characteristics of existing products 8/7/2015 11:55 AM
51 New MMA and a bump-up CD 8/7/2015 11:55 AM
52 e-driven checking products 8/7/2015 11:55 AM
53 Variable rate loans 8/7/2015 11:52 AM
54 none 8/7/2015 11:48 AM
55 N/A 8/7/2015 11:47 AM
56 A cd that is not currently being offered with a different term...not to affect renewing cds 8/7/2015 11:47 AM
57 new loans 8/7/2015 11:46 AM
58 Odd maturity time deposits. Premium money market accounts with barriers to entry. 8/7/2015 11:43 AM
59 Assessing new deposit and loan offerings. 8/7/2015 11:37 AM
60 Premium Money Market Account 8/7/2015 11:27 AM
61 Not developing new products, but considering changes to loan terms, for example, change from 5/1 ARM to 3/1 ARM
or 1 to 3 year balloon loans.
8/7/2015 11:23 AM
62 Checking Loans 8/7/2015 11:23 AM
63 MMDA or Savings Account 8/7/2015 11:21 AM
64 unknown 8/7/2015 11:20 AM
65 new CD and MMK accounts 8/7/2015 11:18 AM
66 Step-up deposit 8/7/2015 11:17 AM
67 CD promotions, high yield - interest checking, variable, adjustable and fixed rate loan options, along with interest
swaps.
8/7/2015 11:16 AM
68 We will get back into longer term real estate. Both mortgage and home equity. 8/7/2015 11:16 AM
69 Change in terms 8/7/2015 11:11 AM
70 High interest checking with balance limits and qualifiers 8/7/2015 11:10 AM
2 / 6
Preparations in the Face of a Rising Rate Environment
34 TBD 8/7/2015 1:24 PM
35 Higher Interest MMA's for large depositors. Different term CD's that automatically roll into a lower rate CD when they
mature.
8/7/2015 1:20 PM
36 We may look at offering a bump rate certificate 8/7/2015 1:10 PM
37 Different deposit products 8/7/2015 1:03 PM
38 New deposit products in case liquidity becomes an issue once rates begin to rise 8/7/2015 1:02 PM
39 adjustable pricing, deposit balance support for loan rate benefits, higher risk consumer loan focus, low down payment
mortgages with or without MI, concessions on fees for shorter business loan maturity
8/7/2015 12:54 PM
40 NA 8/7/2015 12:40 PM
41 TBD 8/7/2015 12:35 PM
42 Premium Money Market Account 8/7/2015 12:16 PM
43 longer term certificates of deposit at higher rates 8/7/2015 12:16 PM
44 Deposit and loan products 8/7/2015 12:11 PM
45 different types of adjustable mortgages such as different terms on ARMS 8/7/2015 12:04 PM
46 Bump Up CD's, High Yield Money Market Accounts 8/7/2015 12:04 PM
47 -1-4 family mortgage for portfolio and secondary market -commercial lending -merchant lending -private student loans 8/7/2015 12:02 PM
48 Rewards checking and savings. 8/7/2015 12:00 PM
49 money market high yield targeted to rate hoppers. 8/7/2015 11:56 AM
50 adjusting characteristics of existing products 8/7/2015 11:55 AM
51 New MMA and a bump-up CD 8/7/2015 11:55 AM
52 e-driven checking products 8/7/2015 11:55 AM
53 Variable rate loans 8/7/2015 11:52 AM
54 none 8/7/2015 11:48 AM
55 N/A 8/7/2015 11:47 AM
56 A cd that is not currently being offered with a different term...not to affect renewing cds 8/7/2015 11:47 AM
57 new loans 8/7/2015 11:46 AM
58 Odd maturity time deposits. Premium money market accounts with barriers to entry. 8/7/2015 11:43 AM
59 Assessing new deposit and loan offerings. 8/7/2015 11:37 AM
60 Premium Money Market Account 8/7/2015 11:27 AM
61 Not developing new products, but considering changes to loan terms, for example, change from 5/1 ARM to 3/1 ARM
or 1 to 3 year balloon loans.
8/7/2015 11:23 AM
62 Checking Loans 8/7/2015 11:23 AM
63 MMDA or Savings Account 8/7/2015 11:21 AM
64 unknown 8/7/2015 11:20 AM
65 new CD and MMK accounts 8/7/2015 11:18 AM
66 Step-up deposit 8/7/2015 11:17 AM
67 CD promotions, high yield - interest checking, variable, adjustable and fixed rate loan options, along with interest
swaps.
8/7/2015 11:16 AM
68 We will get back into longer term real estate. Both mortgage and home equity. 8/7/2015 11:16 AM
69 Change in terms 8/7/2015 11:11 AM
70 High interest checking with balance limits and qualifiers 8/7/2015 11:10 AM
2 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
71 Special Term CD's, Short-Term Loans 8/7/2015 11:09 AM
72 Sub-prime auto loans 8/7/2015 11:08 AM
73 Higher Rate -Tiered Products 8/7/2015 11:08 AM
74 Propriatory 8/7/2015 11:08 AM
75 Step-up certificates 8/7/2015 11:07 AM
76 Step up CD's 8/7/2015 11:07 AM
77 Business lending 8/7/2015 11:06 AM
78 Unique COD products 8/7/2015 10:57 AM
79 redesign of all loan products based on a customer profitability matrix and pricing strategy. 8/7/2015 10:54 AM
80 deposit 8/3/2015 9:52 AM
81 NEW LOAN TYPES, CREDIT CARDS 8/1/2015 11:03 AM
82 Relationship deposit products 7/30/2015 1:01 PM
83 Additional deposit products, tiers 7/30/2015 12:39 PM
84 possibly 7/30/2015 8:52 AM
85 To be determined 7/30/2015 7:44 AM
86 Residential ARM program. 7/29/2015 3:46 PM
87 p 7/29/2015 3:09 PM
88 Different ARM products i.e. 5/5. 7/29/2015 12:55 PM
89 moving away from free. Fees based on balances...ie; value to the bank 7/28/2015 7:23 PM
90 adjustable CD 7/28/2015 3:58 PM
91 We are looking at a rewards checking to help increase non-interest income and provide liquidity. 7/28/2015 2:59 PM
92 CD specials, Money Market 7/28/2015 2:03 PM
93 n/a 7/28/2015 1:26 PM
94 Variable rate mortgages Rate riser CD 7/28/2015 1:22 PM
95 ARM, Money Market 7/28/2015 12:27 PM
96 Deposit and loans 7/28/2015 11:04 AM
97 HELOCs, CD specials 7/28/2015 10:46 AM
98 NA 7/28/2015 10:20 AM
99 match-funding and non-derivative interest rate swaps. 7/28/2015 9:54 AM
100 Not sure, just discussing 7/28/2015 9:41 AM
101 Guaranteed 7/28/2015 9:07 AM
102 We are always looking at new products, but nothing is specifically tied to rising rates. 7/28/2015 9:06 AM
103 Money Market with competitive pricing and liquid features. 7/28/2015 8:57 AM
104 Step Rate CDs 7/28/2015 8:44 AM
105 money market accounts with flexible features but competitive rates. 7/28/2015 8:32 AM
106 CDARS money market 7/28/2015 7:55 AM
107 Mobile banking 7/28/2015 7:53 AM
108 more tiered accounts, more electronic accounts 7/28/2015 7:38 AM
109 Converting our tiered savings account product into a money market account. 7/28/2015 7:35 AM
110 Premium type deposit accounts, hybrid type ARM loans. 7/28/2015 7:27 AM
111 We have developed an interest on business checking and are prepared to roll that out when the time is right. 7/28/2015 7:25 AM
3 / 6
Preparations in the Face of a Rising Rate Environment
71 Special Term CD's, Short-Term Loans 8/7/2015 11:09 AM
72 Sub-prime auto loans 8/7/2015 11:08 AM
73 Higher Rate -Tiered Products 8/7/2015 11:08 AM
74 Propriatory 8/7/2015 11:08 AM
75 Step-up certificates 8/7/2015 11:07 AM
76 Step up CD's 8/7/2015 11:07 AM
77 Business lending 8/7/2015 11:06 AM
78 Unique COD products 8/7/2015 10:57 AM
79 redesign of all loan products based on a customer profitability matrix and pricing strategy. 8/7/2015 10:54 AM
80 deposit 8/3/2015 9:52 AM
81 NEW LOAN TYPES, CREDIT CARDS 8/1/2015 11:03 AM
82 Relationship deposit products 7/30/2015 1:01 PM
83 Additional deposit products, tiers 7/30/2015 12:39 PM
84 possibly 7/30/2015 8:52 AM
85 To be determined 7/30/2015 7:44 AM
86 Residential ARM program. 7/29/2015 3:46 PM
87 p 7/29/2015 3:09 PM
88 Different ARM products i.e. 5/5. 7/29/2015 12:55 PM
89 moving away from free. Fees based on balances...ie; value to the bank 7/28/2015 7:23 PM
90 adjustable CD 7/28/2015 3:58 PM
91 We are looking at a rewards checking to help increase non-interest income and provide liquidity. 7/28/2015 2:59 PM
92 CD specials, Money Market 7/28/2015 2:03 PM
93 n/a 7/28/2015 1:26 PM
94 Variable rate mortgages Rate riser CD 7/28/2015 1:22 PM
95 ARM, Money Market 7/28/2015 12:27 PM
96 Deposit and loans 7/28/2015 11:04 AM
97 HELOCs, CD specials 7/28/2015 10:46 AM
98 NA 7/28/2015 10:20 AM
99 match-funding and non-derivative interest rate swaps. 7/28/2015 9:54 AM
100 Not sure, just discussing 7/28/2015 9:41 AM
101 Guaranteed 7/28/2015 9:07 AM
102 We are always looking at new products, but nothing is specifically tied to rising rates. 7/28/2015 9:06 AM
103 Money Market with competitive pricing and liquid features. 7/28/2015 8:57 AM
104 Step Rate CDs 7/28/2015 8:44 AM
105 money market accounts with flexible features but competitive rates. 7/28/2015 8:32 AM
106 CDARS money market 7/28/2015 7:55 AM
107 Mobile banking 7/28/2015 7:53 AM
108 more tiered accounts, more electronic accounts 7/28/2015 7:38 AM
109 Converting our tiered savings account product into a money market account. 7/28/2015 7:35 AM
110 Premium type deposit accounts, hybrid type ARM loans. 7/28/2015 7:27 AM
111 We have developed an interest on business checking and are prepared to roll that out when the time is right. 7/28/2015 7:25 AM
3 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
112 n/a 7/28/2015 6:51 AM
113 None 7/28/2015 6:47 AM
114 Multiple tiers and optionality 7/28/2015 6:45 AM
115 consumer friendly products, ebanking 7/28/2015 6:13 AM
116 CDs, Special money market without re-pricing current money market portfolio 7/27/2015 8:40 PM
117 money market fund account 7/27/2015 7:00 PM
118 SBA Loans, mobile banking, additional deposit act options 7/27/2015 5:08 PM
119 CDs types and rate ads. Loan side is pricing between fixed and floating 7/27/2015 4:57 PM
120 Evaluating money market options to manage cost of funds 7/27/2015 4:51 PM
121 Interest bearing DDA Savings and Certificates of Deposit 7/27/2015 4:46 PM
122 rate sensitive deposit product 7/27/2015 4:42 PM
123 Charge card/ Fruad protecting 7/27/2015 4:35 PM
124 Again, confidential. 7/27/2015 4:27 PM
125 various floating rate products 7/27/2015 4:21 PM
126 Interest Rate Swaps, using more floating rate loan options with floors and caps, may consider one-time bump CD's 7/27/2015 4:18 PM
127 rate bump cds 7/27/2015 4:16 PM
128 ARM's 7/27/2015 4:12 PM
129 CD products 7/27/2015 4:09 PM
130 Both mortgage loans and checking products 7/27/2015 4:02 PM
131 TBD 7/27/2015 4:02 PM
132 ARM Mortgages, Credit Cards, Remote Deposit Capture 7/27/2015 4:00 PM
133 asset based lending, expanding indirect lending, financial services, appraisal services 7/27/2015 3:56 PM
134 Money market account 7/27/2015 3:55 PM
135 Additional deposit products 7/27/2015 3:54 PM
136 Checking 7/27/2015 3:52 PM
137 low cost deposit strategies replacing high cost certificates......possible high yield checking account 7/27/2015 3:47 PM
138 N/A 7/27/2015 3:46 PM
139 mobile banking app 7/27/2015 3:46 PM
140 ONLINE MORTGAGE SYSTEMS 7/27/2015 3:45 PM
141 certificates 7/27/2015 3:45 PM
142 more variable rates 7/27/2015 3:44 PM
143 Modifying existing structure to account for added deposit costs 7/27/2015 3:43 PM
144 CD specials 7/27/2015 3:43 PM
145 More floating rates 7/27/2015 3:41 PM
146 High yeild checking 7/27/2015 3:39 PM
147 Bump up CD's 7/27/2015 3:34 PM
148 CDs 7/27/2015 3:34 PM
149 Bundled deposit product; different money market product 7/27/2015 3:34 PM
150 Deposit products with an emphasis on fee income generation 7/27/2015 3:34 PM
151 unknown 7/27/2015 3:32 PM
152 Variable mortgage products. And various fixed rate loans 5-year, 7-year, and 10-year. 7/27/2015 3:31 PM
4 / 6
Preparations in the Face of a Rising Rate Environment
112 n/a 7/28/2015 6:51 AM
113 None 7/28/2015 6:47 AM
114 Multiple tiers and optionality 7/28/2015 6:45 AM
115 consumer friendly products, ebanking 7/28/2015 6:13 AM
116 CDs, Special money market without re-pricing current money market portfolio 7/27/2015 8:40 PM
117 money market fund account 7/27/2015 7:00 PM
118 SBA Loans, mobile banking, additional deposit act options 7/27/2015 5:08 PM
119 CDs types and rate ads. Loan side is pricing between fixed and floating 7/27/2015 4:57 PM
120 Evaluating money market options to manage cost of funds 7/27/2015 4:51 PM
121 Interest bearing DDA Savings and Certificates of Deposit 7/27/2015 4:46 PM
122 rate sensitive deposit product 7/27/2015 4:42 PM
123 Charge card/ Fruad protecting 7/27/2015 4:35 PM
124 Again, confidential. 7/27/2015 4:27 PM
125 various floating rate products 7/27/2015 4:21 PM
126 Interest Rate Swaps, using more floating rate loan options with floors and caps, may consider one-time bump CD's 7/27/2015 4:18 PM
127 rate bump cds 7/27/2015 4:16 PM
128 ARM's 7/27/2015 4:12 PM
129 CD products 7/27/2015 4:09 PM
130 Both mortgage loans and checking products 7/27/2015 4:02 PM
131 TBD 7/27/2015 4:02 PM
132 ARM Mortgages, Credit Cards, Remote Deposit Capture 7/27/2015 4:00 PM
133 asset based lending, expanding indirect lending, financial services, appraisal services 7/27/2015 3:56 PM
134 Money market account 7/27/2015 3:55 PM
135 Additional deposit products 7/27/2015 3:54 PM
136 Checking 7/27/2015 3:52 PM
137 low cost deposit strategies replacing high cost certificates......possible high yield checking account 7/27/2015 3:47 PM
138 N/A 7/27/2015 3:46 PM
139 mobile banking app 7/27/2015 3:46 PM
140 ONLINE MORTGAGE SYSTEMS 7/27/2015 3:45 PM
141 certificates 7/27/2015 3:45 PM
142 more variable rates 7/27/2015 3:44 PM
143 Modifying existing structure to account for added deposit costs 7/27/2015 3:43 PM
144 CD specials 7/27/2015 3:43 PM
145 More floating rates 7/27/2015 3:41 PM
146 High yeild checking 7/27/2015 3:39 PM
147 Bump up CD's 7/27/2015 3:34 PM
148 CDs 7/27/2015 3:34 PM
149 Bundled deposit product; different money market product 7/27/2015 3:34 PM
150 Deposit products with an emphasis on fee income generation 7/27/2015 3:34 PM
151 unknown 7/27/2015 3:32 PM
152 Variable mortgage products. And various fixed rate loans 5-year, 7-year, and 10-year. 7/27/2015 3:31 PM
4 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
153 We are not sure 7/27/2015 3:30 PM
154 CD terms, special rates, tiered rates and step up rates. Extending early withdrawal penalties on CDs. 7/27/2015 3:28 PM
155 Products designed to keep members engaged 7/27/2015 3:28 PM
156 hybrid home equity product non free checking checking more competitive business products 7/27/2015 3:27 PM
157 Money market 7/27/2015 3:27 PM
158 Mobile Banking 7/27/2015 3:26 PM
159 New NMD product 7/27/2015 3:23 PM
160 Longer term CD's 7/27/2015 3:22 PM
161 Cash management products 7/27/2015 3:17 PM
162 CD with options In house residential real estate product 7/27/2015 3:17 PM
163 Not a new product - but special TD terms 7/27/2015 3:13 PM
164 Checking and Savings products that move with the market rates 7/27/2015 3:13 PM
165 new savings products and CDs. 7/27/2015 3:12 PM
166 retool of existing non-maturity deposit accounts 7/27/2015 3:11 PM
167 Market sensitive deposits 7/27/2015 3:07 PM
168 Relationship products that keep the customer to us. 7/27/2015 3:05 PM
169 Tiered CD rate Bringing Credit Cards back in house (sold portfolio 10+ years ago) 7/27/2015 3:05 PM
170 special CDs - teaser rates 7/27/2015 3:03 PM
171 Adjustable rate CDs, home equity loans. 7/27/2015 3:02 PM
172 Odd term CDs 7/27/2015 3:02 PM
173 Money Markets, Savings 7/27/2015 3:02 PM
174 risk-based consumer loans with higher rates, possibly variable term CD's 7/27/2015 3:01 PM
175 Adjustable pricing in Commercial Loan area. 7/27/2015 3:01 PM
176 remote deposit capture 7/27/2015 3:01 PM
177 Listing service friendly 7/27/2015 3:00 PM
178 Some bump up features on our cd products 7/27/2015 3:00 PM
179 Loan and deposit products. 7/27/2015 2:59 PM
180 We have implemented a HELOC loan product to deal with lending needs in home real estate when rates do rise. 7/27/2015 2:55 PM
181 Payday Lending Loan, Step up CD's 7/27/2015 2:55 PM
182 arms, baloons 7/27/2015 2:54 PM
183 CD's, commercial loans 7/27/2015 2:53 PM
184 HELOC's and Business accounts 7/27/2015 2:53 PM
185 Bump Rate CD's 7/27/2015 2:44 PM
186 Variable rate CDs 7/6/2015 9:14 PM
187 Bundled products 6/29/2015 1:25 PM
188 Developed tiered money market product which will have higher rates than our current tiered money market account.
To be used offensively for key customers and defensively for rate sensitive customers.
6/23/2015 11:39 AM
189 Mobile banking 6/23/2015 10:23 AM
190 Higher balance MM or savings, special CD product 6/22/2015 4:18 PM
191 We have developed a few new products recently. A tiered MOney Market Account and a Liquid CD. 6/22/2015 2:07 PM
192 Bump-up CDs; 6/22/2015 1:28 PM
5 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
153 We are not sure 7/27/2015 3:30 PM
154 CD terms, special rates, tiered rates and step up rates. Extending early withdrawal penalties on CDs. 7/27/2015 3:28 PM
155 Products designed to keep members engaged 7/27/2015 3:28 PM
156 hybrid home equity product non free checking checking more competitive business products 7/27/2015 3:27 PM
157 Money market 7/27/2015 3:27 PM
158 Mobile Banking 7/27/2015 3:26 PM
159 New NMD product 7/27/2015 3:23 PM
160 Longer term CD's 7/27/2015 3:22 PM
161 Cash management products 7/27/2015 3:17 PM
162 CD with options In house residential real estate product 7/27/2015 3:17 PM
163 Not a new product - but special TD terms 7/27/2015 3:13 PM
164 Checking and Savings products that move with the market rates 7/27/2015 3:13 PM
165 new savings products and CDs. 7/27/2015 3:12 PM
166 retool of existing non-maturity deposit accounts 7/27/2015 3:11 PM
167 Market sensitive deposits 7/27/2015 3:07 PM
168 Relationship products that keep the customer to us. 7/27/2015 3:05 PM
169 Tiered CD rate Bringing Credit Cards back in house (sold portfolio 10+ years ago) 7/27/2015 3:05 PM
170 special CDs - teaser rates 7/27/2015 3:03 PM
171 Adjustable rate CDs, home equity loans. 7/27/2015 3:02 PM
172 Odd term CDs 7/27/2015 3:02 PM
173 Money Markets, Savings 7/27/2015 3:02 PM
174 risk-based consumer loans with higher rates, possibly variable term CD's 7/27/2015 3:01 PM
175 Adjustable pricing in Commercial Loan area. 7/27/2015 3:01 PM
176 remote deposit capture 7/27/2015 3:01 PM
177 Listing service friendly 7/27/2015 3:00 PM
178 Some bump up features on our cd products 7/27/2015 3:00 PM
179 Loan and deposit products. 7/27/2015 2:59 PM
180 We have implemented a HELOC loan product to deal with lending needs in home real estate when rates do rise. 7/27/2015 2:55 PM
181 Payday Lending Loan, Step up CD's 7/27/2015 2:55 PM
182 arms, baloons 7/27/2015 2:54 PM
183 CD's, commercial loans 7/27/2015 2:53 PM
184 HELOC's and Business accounts 7/27/2015 2:53 PM
185 Bump Rate CD's 7/27/2015 2:44 PM
186 Variable rate CDs 7/6/2015 9:14 PM
187 Bundled products 6/29/2015 1:25 PM
188 Developed tiered money market product which will have higher rates than our current tiered money market account.
To be used offensively for key customers and defensively for rate sensitive customers.
6/23/2015 11:39 AM
189 Mobile banking 6/23/2015 10:23 AM
190 Higher balance MM or savings, special CD product 6/22/2015 4:18 PM
191 We have developed a few new products recently. A tiered MOney Market Account and a Liquid CD. 6/22/2015 2:07 PM
192 Bump-up CDs; 6/22/2015 1:28 PM
5 / 6
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 2 (Question 5 Responses) Continued
Survey Results — Appendix
193 All deposit products are reviewed 6/22/2015 12:30 PM
194 Non interest bearing checking 6/22/2015 12:13 PM
195 1st mortgages and Student Loans Reward Checking Products 6/22/2015 10:38 AM
196 Driving towards more commercial/small business deposit offerings 6/22/2015 10:35 AM
197 In-house fixed rate 6/22/2015 10:30 AM
198 bump rate cd 6/22/2015 10:25 AM
199 Tiered MM 6/19/2015 3:43 PM
200 Loans 6/19/2015 1:34 PM
201 Adding some variable rate products that we do not presently offer. 6/18/2015 8:24 AM
202 relationship product 6/15/2015 2:56 PM
203 Non-rate driven promos like a no-penalty CD 6/15/2015 11:09 AM
204 New deposit account tiers 6/15/2015 9:44 AM
205 HSA Mobile Banking - Personal and Business 6/15/2015 8:56 AM
206 CD promotional special to lock loan term rates 6/15/2015 7:50 AM
207 Variable rate mortgages 6/12/2015 7:27 PM
208 Tax reductions seminars and planning as a way to attempt to control the outflow of deposits to annuities, IRA's, etc. 6/12/2015 4:12 PM
209 N/A 6/12/2015 3:57 PM
210 Potentially relationship checking products to start 6/12/2015 3:09 PM
6 / 6
Preparations in the Face of a Rising Rate Environment
Q7 If so, what are you doing to quantify
your risk?
Answered: 296 Skipped: 469
# Responses Date
1 Using a risk-based model to quantify (which includes using past behaviors and trends, projected rate changes, and
estimated flows between deposit categories or liquidity solution options.
8/18/2015 1:19 PM
2 Measuring rate sensitivity on deposit products monthly. Moving to shorter term investments. 8/14/2015 12:45 PM
3 reviewing time deposits maturities and identifying other less sticky deposits 8/13/2015 11:04 AM
4 System reports to identify at risk deposits by balance and rate 8/12/2015 10:41 AM
5 Analyzing our member base and looking at hot money 8/11/2015 5:36 PM
6 Running projected rate increases on adjustable rate loans. 8/11/2015 12:59 PM
7 working on process 8/11/2015 11:32 AM
8 Laddering the yields and amortizations. 8/11/2015 7:10 AM
9 CFO runs What IF Scenarios 8/10/2015 5:06 PM
10 Earlier this year we had a Deposit study performed by McGuire Performance Solutions. We know that our core
deposits are extremely stable with an average life of nearly 8 years.
8/10/2015 3:05 PM
11 Shocking existing rates up 200 to 400 basis points in both parallel and proportional models. Also looking at risks of
long term Loan products slowing down payoffs if rates increase.
8/10/2015 1:52 PM
12 Stress tests ("what if" scenarios), maturities forecasts, money movement trends, etc. 8/10/2015 1:20 PM
13 stress testing with decay assumptions 8/10/2015 1:00 PM
14 N/A 8/10/2015 12:29 PM
15 We have analyzed our nonmaturity deposits for surge balances and calculated a higher risk of runoff for those
deposits.
8/10/2015 12:22 PM
16 We plan to control the risk by not increasing deposit accounts, only certain Certificates of Deposit. 8/10/2015 12:14 PM
17 Staying somewhat short, but also locking in deposits at a somewhat premium rate now to maintain cost funds. 8/10/2015 10:21 AM
18 Measuring our rate sensitive liabilities and calculating various rate change impacts 8/10/2015 9:09 AM
19 Back testing reports 8/10/2015 8:37 AM
20 stress and scenario models 8/10/2015 8:31 AM
21 Looking at money management account growth and identifying hot money. Running stress tests on the balance sheet
with this money leaving or moving into certificates at higher rates. looking at core deposit behavior from the last rise in
rates.
8/10/2015 8:04 AM
22 Assuming a certain percentage of clients will move to the products and determine the impact on the portfolio and
impact on the bottom line.
8/10/2015 7:32 AM
23 Offering longer term CD's that will step up if rates increase 8/10/2015 7:32 AM
24 Studying the make-up of the deposits 8/8/2015 4:54 PM
25 Reviewing interest rate risk sensitivity, reviewing balances and maturities of deposit products. reviewing previous
asset-liability matching efforts
8/8/2015 4:19 PM
26 Adopted ERM as well as complete regular sensitivity analysis. 8/8/2015 8:34 AM
27 Software designed to measure risk 8/7/2015 4:34 PM
28 Projecting numerous scenarios with different assumptions. Stressing loan and deposit interest rate assumptions. 8/7/2015 3:38 PM
29 ALCO modeling 8/7/2015 3:35 PM
1 / 9
Preparations in the Face of a Rising Rate EnvironmentQ2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses)
Survey Results — Appendix
Q7 If so, what are you doing to quantify
your risk?
Answered: 296 Skipped: 469
# Responses Date
1 Using a risk-based model to quantify (which includes using past behaviors and trends, projected rate changes, and
estimated flows between deposit categories or liquidity solution options.
8/18/2015 1:19 PM
2 Measuring rate sensitivity on deposit products monthly. Moving to shorter term investments. 8/14/2015 12:45 PM
3 reviewing time deposits maturities and identifying other less sticky deposits 8/13/2015 11:04 AM
4 System reports to identify at risk deposits by balance and rate 8/12/2015 10:41 AM
5 Analyzing our member base and looking at hot money 8/11/2015 5:36 PM
6 Running projected rate increases on adjustable rate loans. 8/11/2015 12:59 PM
7 working on process 8/11/2015 11:32 AM
8 Laddering the yields and amortizations. 8/11/2015 7:10 AM
9 CFO runs What IF Scenarios 8/10/2015 5:06 PM
10 Earlier this year we had a Deposit study performed by McGuire Performance Solutions. We know that our core
deposits are extremely stable with an average life of nearly 8 years.
8/10/2015 3:05 PM
11 Shocking existing rates up 200 to 400 basis points in both parallel and proportional models. Also looking at risks of
long term Loan products slowing down payoffs if rates increase.
8/10/2015 1:52 PM
12 Stress tests ("what if" scenarios), maturities forecasts, money movement trends, etc. 8/10/2015 1:20 PM
13 stress testing with decay assumptions 8/10/2015 1:00 PM
14 N/A 8/10/2015 12:29 PM
15 We have analyzed our nonmaturity deposits for surge balances and calculated a higher risk of runoff for those
deposits.
8/10/2015 12:22 PM
16 We plan to control the risk by not increasing deposit accounts, only certain Certificates of Deposit. 8/10/2015 12:14 PM
17 Staying somewhat short, but also locking in deposits at a somewhat premium rate now to maintain cost funds. 8/10/2015 10:21 AM
18 Measuring our rate sensitive liabilities and calculating various rate change impacts 8/10/2015 9:09 AM
19 Back testing reports 8/10/2015 8:37 AM
20 stress and scenario models 8/10/2015 8:31 AM
21 Looking at money management account growth and identifying hot money. Running stress tests on the balance sheet
with this money leaving or moving into certificates at higher rates. looking at core deposit behavior from the last rise in
rates.
8/10/2015 8:04 AM
22 Assuming a certain percentage of clients will move to the products and determine the impact on the portfolio and
impact on the bottom line.
8/10/2015 7:32 AM
23 Offering longer term CD's that will step up if rates increase 8/10/2015 7:32 AM
24 Studying the make-up of the deposits 8/8/2015 4:54 PM
25 Reviewing interest rate risk sensitivity, reviewing balances and maturities of deposit products. reviewing previous
asset-liability matching efforts
8/8/2015 4:19 PM
26 Adopted ERM as well as complete regular sensitivity analysis. 8/8/2015 8:34 AM
27 Software designed to measure risk 8/7/2015 4:34 PM
28 Projecting numerous scenarios with different assumptions. Stressing loan and deposit interest rate assumptions. 8/7/2015 3:38 PM
29 ALCO modeling 8/7/2015 3:35 PM
1 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
30 It is irrelevant without viewing the impact of loans. Viewing in isolation would lead to erroneous strategies. It would put
me down to the intellectual scale of an NCUA chairwoman.
8/7/2015 3:31 PM
31 Assessment of MMVA accounts to determine how much is core and amount which might return to the market. 8/7/2015 3:19 PM
32 Using Interest Risk model through Fed reporter(Plansmith) 8/7/2015 3:15 PM
33 IRR analysis including Gap measures, IRSA and EVE analysis 8/7/2015 3:08 PM
34 ALM modeling 8/7/2015 3:07 PM
35 Measuring difference between recent deposit increases and "normal" increases prior to the financial crisis; modeling
contingency funding plans and stress tests.
8/7/2015 2:59 PM
36 ALM software 8/7/2015 2:55 PM
37 We have been stress-testing our liquidity analysis. 8/7/2015 2:28 PM
38 Analysis of current positions and developing a strategy using investments to counter. 8/7/2015 2:27 PM
39 Estimating the rate change potential and the movement potential of deposits in a change environment. 8/7/2015 2:21 PM
40 Using data from ALM reports 8/7/2015 2:18 PM
41 Using our Plansmith GPS 8/7/2015 2:09 PM
42 Using outside consultants, we attempt to define "core deposits" and do NEV projections. 8/7/2015 1:49 PM
43 Interest Rate Risk reports prepared by and outside vendor. 8/7/2015 1:47 PM
44 Running shocks to see the impact of deposit run off. 8/7/2015 1:40 PM
45 Scenario testing, ALM simulations 8/7/2015 1:37 PM
46 Monitoring and analyzing deposit flows and decay rates. 8/7/2015 1:35 PM
47 We use our NEV calculation to see what the rising rate environment will look like for our deposit strategy, along with
historical movements in deposit funds (Savings deposits moving to Certificates) when rates rose in 2006-2007.
8/7/2015 1:32 PM
48 Rate Models and Rate Shocks 8/7/2015 1:29 PM
49 TBD 8/7/2015 1:24 PM
50 minimizing dividend rate on shares and money markets 8/7/2015 1:13 PM
51 don know that's no my responsibility 8/7/2015 1:13 PM
52 ALM modeling, deposit study, beta testing 8/7/2015 1:12 PM
53 n/a 8/7/2015 1:10 PM
54 alm analysis 8/7/2015 1:08 PM
55 looking at maturities and customer interest rate sensitivity 8/7/2015 1:03 PM
56 Simulating unfavorable changes to core deposit decay rates and deposit rate betas. Making adjustments to products if
we don't like simulated results
8/7/2015 1:02 PM
57 maturities, concentration, relative to rate changes 8/7/2015 12:54 PM
58 Re-pricing on maturing deposits are monitored quarterly. 8/7/2015 12:50 PM
59 NEV valuations. 8/7/2015 12:42 PM
60 compressing balance sheet with .25 and .50 shock change 8/7/2015 12:41 PM
61 Estimates impact and sensitivity 8/7/2015 12:40 PM
62 We are already prepared 8/7/2015 12:38 PM
63 core deposit study and decay rates 8/7/2015 12:38 PM
64 Additional analysis with third party ALCO advisor 8/7/2015 12:35 PM
65 make sure we know the customers 8/7/2015 12:20 PM
66 We have estimated some deposit runoff from NIB DDA 8/7/2015 12:18 PM
67 Attempting to identify deposit dollars in excess of working capital needs. 8/7/2015 12:17 PM
2 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
30 It is irrelevant without viewing the impact of loans. Viewing in isolation would lead to erroneous strategies. It would put
me down to the intellectual scale of an NCUA chairwoman.
8/7/2015 3:31 PM
31 Assessment of MMVA accounts to determine how much is core and amount which might return to the market. 8/7/2015 3:19 PM
32 Using Interest Risk model through Fed reporter(Plansmith) 8/7/2015 3:15 PM
33 IRR analysis including Gap measures, IRSA and EVE analysis 8/7/2015 3:08 PM
34 ALM modeling 8/7/2015 3:07 PM
35 Measuring difference between recent deposit increases and "normal" increases prior to the financial crisis; modeling
contingency funding plans and stress tests.
8/7/2015 2:59 PM
36 ALM software 8/7/2015 2:55 PM
37 We have been stress-testing our liquidity analysis. 8/7/2015 2:28 PM
38 Analysis of current positions and developing a strategy using investments to counter. 8/7/2015 2:27 PM
39 Estimating the rate change potential and the movement potential of deposits in a change environment. 8/7/2015 2:21 PM
40 Using data from ALM reports 8/7/2015 2:18 PM
41 Using our Plansmith GPS 8/7/2015 2:09 PM
42 Using outside consultants, we attempt to define "core deposits" and do NEV projections. 8/7/2015 1:49 PM
43 Interest Rate Risk reports prepared by and outside vendor. 8/7/2015 1:47 PM
44 Running shocks to see the impact of deposit run off. 8/7/2015 1:40 PM
45 Scenario testing, ALM simulations 8/7/2015 1:37 PM
46 Monitoring and analyzing deposit flows and decay rates. 8/7/2015 1:35 PM
47 We use our NEV calculation to see what the rising rate environment will look like for our deposit strategy, along with
historical movements in deposit funds (Savings deposits moving to Certificates) when rates rose in 2006-2007.
8/7/2015 1:32 PM
48 Rate Models and Rate Shocks 8/7/2015 1:29 PM
49 TBD 8/7/2015 1:24 PM
50 minimizing dividend rate on shares and money markets 8/7/2015 1:13 PM
51 don know that's no my responsibility 8/7/2015 1:13 PM
52 ALM modeling, deposit study, beta testing 8/7/2015 1:12 PM
53 n/a 8/7/2015 1:10 PM
54 alm analysis 8/7/2015 1:08 PM
55 looking at maturities and customer interest rate sensitivity 8/7/2015 1:03 PM
56 Simulating unfavorable changes to core deposit decay rates and deposit rate betas. Making adjustments to products if
we don't like simulated results
8/7/2015 1:02 PM
57 maturities, concentration, relative to rate changes 8/7/2015 12:54 PM
58 Re-pricing on maturing deposits are monitored quarterly. 8/7/2015 12:50 PM
59 NEV valuations. 8/7/2015 12:42 PM
60 compressing balance sheet with .25 and .50 shock change 8/7/2015 12:41 PM
61 Estimates impact and sensitivity 8/7/2015 12:40 PM
62 We are already prepared 8/7/2015 12:38 PM
63 core deposit study and decay rates 8/7/2015 12:38 PM
64 Additional analysis with third party ALCO advisor 8/7/2015 12:35 PM
65 make sure we know the customers 8/7/2015 12:20 PM
66 We have estimated some deposit runoff from NIB DDA 8/7/2015 12:18 PM
67 Attempting to identify deposit dollars in excess of working capital needs. 8/7/2015 12:17 PM
2 / 9
Preparations in the Face of a Rising Rate Environment
68 Monitoring deposit growth since 2008 and looking at the top 50 depositors in terms of deposit balances 8/7/2015 12:16 PM
69 Continuous analysis of certificate balances by term, rate and maturity. Modeling with NMD assumptions more
conservative than study results.
8/7/2015 12:15 PM
70 Input decay rate and Beta assumptions based on historical perfomance into quarterly interest rate risk model reports. 8/7/2015 12:11 PM
71 Keeping betas up to date and testing sensitivity. 8/7/2015 12:11 PM
72 rate shock stress testing 8/7/2015 12:07 PM
73 high liquidity.. little risk 8/7/2015 12:07 PM
74 Deposit rates will increase but not as fast as loan rates 8/7/2015 12:04 PM
75 Deposit sensitivity analysis 8/7/2015 12:04 PM
76 The answer is we should be but I do not know what that is at this time 8/7/2015 12:02 PM
77 reviewing our deposit time horizons as well as our asset duration 8/7/2015 11:58 AM
78 high balance depositors. 8/7/2015 11:56 AM
79 stress testing against various scenarios and historical levels 8/7/2015 11:55 AM
80 identifying hot money balances 8/7/2015 11:55 AM
81 Analysis of share deposits vs. investment deposits - ability to support lending strategies going forward 8/7/2015 11:55 AM
82 ALM Modeling 8/7/2015 11:52 AM
83 IRR projections. 8/7/2015 11:51 AM
84 Stress testing our deposit assumptions. 8/7/2015 11:51 AM
85 We utilize both internal and external interest rate risk models 8/7/2015 11:49 AM
86 none 8/7/2015 11:48 AM
87 We use PlanSmith software for our monthly analytics. 8/7/2015 11:47 AM
88 New product 8/7/2015 11:47 AM
89 monitoring liquidity 8/7/2015 11:46 AM
90 We run many interest rate scenarios with various betas. We run our 15year historial betas and we run 30-40% higher
betas to discussion purposes.
8/7/2015 11:44 AM
91 Expecting some in-bank movement from MMA's to CD 's. 8/7/2015 11:40 AM
92 using models from our vendor 8/7/2015 11:38 AM
93 Run scenarios on deposit outflow and implications of letting it go. 8/7/2015 11:37 AM
94 IRR studies, decay rates, surge analysis 8/7/2015 11:30 AM
95 Compare rates on MMDAs and CDs, as compared to non-interest bearing checking accounts. 8/7/2015 11:23 AM
96 NMD analysis Surveying Competitor fees 8/7/2015 11:23 AM
97 In house report monitoring 8/7/2015 11:21 AM
98 Stress Testing 8/7/2015 11:20 AM
99 Applying alm decay assumptions along with rate changes to retain deposits and recognizing them on the income
statement
8/7/2015 11:20 AM
100 Modeling 8/7/2015 11:18 AM
101 We attempt to quantify how much deposits dollars may leave the bank or change to different products 8/7/2015 11:17 AM
102 Deposit Study 8/7/2015 11:17 AM
103 Evaluating our beta coefficients, core deposit analysis, and evaluating historical trends in risking rate environment 8/7/2015 11:16 AM
104 Watching our rate sensitivity and cash flows. 8/7/2015 11:16 AM
105 DURATION ANALYSIS 8/7/2015 11:16 AM
106 We view 8 different assumptions on NMD 8/7/2015 11:13 AM
3 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
68 Monitoring deposit growth since 2008 and looking at the top 50 depositors in terms of deposit balances 8/7/2015 12:16 PM
69 Continuous analysis of certificate balances by term, rate and maturity. Modeling with NMD assumptions more
conservative than study results.
8/7/2015 12:15 PM
70 Input decay rate and Beta assumptions based on historical perfomance into quarterly interest rate risk model reports. 8/7/2015 12:11 PM
71 Keeping betas up to date and testing sensitivity. 8/7/2015 12:11 PM
72 rate shock stress testing 8/7/2015 12:07 PM
73 high liquidity.. little risk 8/7/2015 12:07 PM
74 Deposit rates will increase but not as fast as loan rates 8/7/2015 12:04 PM
75 Deposit sensitivity analysis 8/7/2015 12:04 PM
76 The answer is we should be but I do not know what that is at this time 8/7/2015 12:02 PM
77 reviewing our deposit time horizons as well as our asset duration 8/7/2015 11:58 AM
78 high balance depositors. 8/7/2015 11:56 AM
79 stress testing against various scenarios and historical levels 8/7/2015 11:55 AM
80 identifying hot money balances 8/7/2015 11:55 AM
81 Analysis of share deposits vs. investment deposits - ability to support lending strategies going forward 8/7/2015 11:55 AM
82 ALM Modeling 8/7/2015 11:52 AM
83 IRR projections. 8/7/2015 11:51 AM
84 Stress testing our deposit assumptions. 8/7/2015 11:51 AM
85 We utilize both internal and external interest rate risk models 8/7/2015 11:49 AM
86 none 8/7/2015 11:48 AM
87 We use PlanSmith software for our monthly analytics. 8/7/2015 11:47 AM
88 New product 8/7/2015 11:47 AM
89 monitoring liquidity 8/7/2015 11:46 AM
90 We run many interest rate scenarios with various betas. We run our 15year historial betas and we run 30-40% higher
betas to discussion purposes.
8/7/2015 11:44 AM
91 Expecting some in-bank movement from MMA's to CD 's. 8/7/2015 11:40 AM
92 using models from our vendor 8/7/2015 11:38 AM
93 Run scenarios on deposit outflow and implications of letting it go. 8/7/2015 11:37 AM
94 IRR studies, decay rates, surge analysis 8/7/2015 11:30 AM
95 Compare rates on MMDAs and CDs, as compared to non-interest bearing checking accounts. 8/7/2015 11:23 AM
96 NMD analysis Surveying Competitor fees 8/7/2015 11:23 AM
97 In house report monitoring 8/7/2015 11:21 AM
98 Stress Testing 8/7/2015 11:20 AM
99 Applying alm decay assumptions along with rate changes to retain deposits and recognizing them on the income
statement
8/7/2015 11:20 AM
100 Modeling 8/7/2015 11:18 AM
101 We attempt to quantify how much deposits dollars may leave the bank or change to different products 8/7/2015 11:17 AM
102 Deposit Study 8/7/2015 11:17 AM
103 Evaluating our beta coefficients, core deposit analysis, and evaluating historical trends in risking rate environment 8/7/2015 11:16 AM
104 Watching our rate sensitivity and cash flows. 8/7/2015 11:16 AM
105 DURATION ANALYSIS 8/7/2015 11:16 AM
106 We view 8 different assumptions on NMD 8/7/2015 11:13 AM
3 / 9
Preparations in the Face of a Rising Rate Environment
107 Watching our Interest Rate Risk historical and current reports to try and predict what our deposits will do when rates
rise. Predicting any changes if any we think our deposit types will do.
8/7/2015 11:12 AM
108 Preparation for a financial change, possible offset for expenses 8/7/2015 11:11 AM
109 Look at historical data; what happened in 2007 when rates increased significantly. How much parked money do we
have in savings and MMAs. Nothing terribly scientific....
8/7/2015 11:11 AM
110 Process managed by finance. 8/7/2015 11:10 AM
111 ALM analysis 8/7/2015 11:10 AM
112 Wed measure IRR with Sendero model 8/7/2015 11:09 AM
113 Reviewing run-off rates 8/7/2015 11:08 AM
114 ALM modeling including modeling a heavy switch of savings, checking, and money market accounts back into
certificates of deposit similar to after the last time rates increased from a low rate environment.
8/7/2015 11:08 AM
115 Projecting some runoff as we won't be raising deposit rates very quickly 8/7/2015 11:08 AM
116 Measuring potentially volatile deposits 8/7/2015 11:08 AM
117 Focusing on the sizes and speeds of balance sheet liquidity buckets. 8/7/2015 11:07 AM
118 Interest rate risk scenarios and how they would affect our Net Economic Value 8/7/2015 11:07 AM
119 Using outside vendor 8/7/2015 11:07 AM
120 Measuring concentrations, reviewing peer results 8/7/2015 11:06 AM
121 Modeling 8/7/2015 11:04 AM
122 Reviewing Core versus non-core depositors 8/7/2015 11:01 AM
123 Using more aggressive beta's to measure potential deposits runoff risk. 8/7/2015 10:58 AM
124 Measuring potential run-off in higher rate environment 8/7/2015 10:57 AM
125 Minimizing the use of non core deposits by moving away from CD's and qualifying the deposit acquisition through
small business sector loans and treasury management opportunities.
8/7/2015 10:54 AM
126 Please see previous response. 8/7/2015 10:46 AM
127 interest rate modeling 8/7/2015 10:46 AM
128 gap 8/3/2015 9:52 AM
129 Looking at single service deposit relationships as potential runnoff or a selling opportunity to gain more business and
offering relationship customers perks to retain their relationships
7/30/2015 1:01 PM
130 Updated core deposit studies, and stress testing 7/30/2015 12:39 PM
131 p 7/29/2015 3:09 PM
132 ... 7/29/2015 12:55 PM
133 Analysis of 7/29/2015 11:35 AM
134 analyzing historical trends for indication of normal conditions or typical deposit holder behavior in our local area. 7/29/2015 6:43 AM
135 portfolio review. What do we have? what will re-price if/when rates rise. what is the lag for loans repricing. 7/28/2015 7:23 PM
136 Analyzing maturing CDs and estimating migration of MMDDA funds. 7/28/2015 3:58 PM
137 We look at the NEV impact on each deposit account in up 300 and 400 rate environments. 7/28/2015 2:59 PM
138 Stress Testing 7/28/2015 2:03 PM
139 Categorizing surge deposits by risk of loss in rising rate environment. H/M/L and apply a runoff factor to use in our
global liquidity planning
7/28/2015 1:37 PM
140 n/a 7/28/2015 1:26 PM
141 projecting out future spreads. 7/28/2015 1:22 PM
142 Watching the numbers daily and keeping rates competitive 7/28/2015 1:02 PM
143 Upward to 300 basis points effect on NEV and income. 7/28/2015 12:27 PM
4 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
107 Watching our Interest Rate Risk historical and current reports to try and predict what our deposits will do when rates
rise. Predicting any changes if any we think our deposit types will do.
8/7/2015 11:12 AM
108 Preparation for a financial change, possible offset for expenses 8/7/2015 11:11 AM
109 Look at historical data; what happened in 2007 when rates increased significantly. How much parked money do we
have in savings and MMAs. Nothing terribly scientific....
8/7/2015 11:11 AM
110 Process managed by finance. 8/7/2015 11:10 AM
111 ALM analysis 8/7/2015 11:10 AM
112 Wed measure IRR with Sendero model 8/7/2015 11:09 AM
113 Reviewing run-off rates 8/7/2015 11:08 AM
114 ALM modeling including modeling a heavy switch of savings, checking, and money market accounts back into
certificates of deposit similar to after the last time rates increased from a low rate environment.
8/7/2015 11:08 AM
115 Projecting some runoff as we won't be raising deposit rates very quickly 8/7/2015 11:08 AM
116 Measuring potentially volatile deposits 8/7/2015 11:08 AM
117 Focusing on the sizes and speeds of balance sheet liquidity buckets. 8/7/2015 11:07 AM
118 Interest rate risk scenarios and how they would affect our Net Economic Value 8/7/2015 11:07 AM
119 Using outside vendor 8/7/2015 11:07 AM
120 Measuring concentrations, reviewing peer results 8/7/2015 11:06 AM
121 Modeling 8/7/2015 11:04 AM
122 Reviewing Core versus non-core depositors 8/7/2015 11:01 AM
123 Using more aggressive beta's to measure potential deposits runoff risk. 8/7/2015 10:58 AM
124 Measuring potential run-off in higher rate environment 8/7/2015 10:57 AM
125 Minimizing the use of non core deposits by moving away from CD's and qualifying the deposit acquisition through
small business sector loans and treasury management opportunities.
8/7/2015 10:54 AM
126 Please see previous response. 8/7/2015 10:46 AM
127 interest rate modeling 8/7/2015 10:46 AM
128 gap 8/3/2015 9:52 AM
129 Looking at single service deposit relationships as potential runnoff or a selling opportunity to gain more business and
offering relationship customers perks to retain their relationships
7/30/2015 1:01 PM
130 Updated core deposit studies, and stress testing 7/30/2015 12:39 PM
131 p 7/29/2015 3:09 PM
132 ... 7/29/2015 12:55 PM
133 Analysis of 7/29/2015 11:35 AM
134 analyzing historical trends for indication of normal conditions or typical deposit holder behavior in our local area. 7/29/2015 6:43 AM
135 portfolio review. What do we have? what will re-price if/when rates rise. what is the lag for loans repricing. 7/28/2015 7:23 PM
136 Analyzing maturing CDs and estimating migration of MMDDA funds. 7/28/2015 3:58 PM
137 We look at the NEV impact on each deposit account in up 300 and 400 rate environments. 7/28/2015 2:59 PM
138 Stress Testing 7/28/2015 2:03 PM
139 Categorizing surge deposits by risk of loss in rising rate environment. H/M/L and apply a runoff factor to use in our
global liquidity planning
7/28/2015 1:37 PM
140 n/a 7/28/2015 1:26 PM
141 projecting out future spreads. 7/28/2015 1:22 PM
142 Watching the numbers daily and keeping rates competitive 7/28/2015 1:02 PM
143 Upward to 300 basis points effect on NEV and income. 7/28/2015 12:27 PM
4 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
144 Working with ALM provider 7/28/2015 11:45 AM
145 Using rising rate environments in our ALM model. 7/28/2015 11:31 AM
146 Looking at maturities concentrations velocities and movement of funds 7/28/2015 11:04 AM
147 sensitivity analysis 7/28/2015 10:46 AM
148 Again, "What if" projections 7/28/2015 10:45 AM
149 Looking at short term rates 7/28/2015 10:20 AM
150 Creating scenarios that represent possible outcomes of the rate changes and putting numbers to those outcomes. 7/28/2015 9:59 AM
151 n/a 7/28/2015 9:54 AM
152 stress testing, EVE and NII simulation 7/28/2015 9:50 AM
153 what if scenarios in up rate increases 7/28/2015 9:41 AM
154 running simulations to see how new products effect the mix. 7/28/2015 9:07 AM
155 We look at how our rates are at current levels and how we would be affected at several different rate increases. 7/28/2015 9:06 AM
156 Measuring earnings at risk most specifically cost of deposits fleeing, migrating or repricing determined as a cost of
funds over a point of time at various rate shocks.
7/28/2015 8:57 AM
157 In house model 7/28/2015 8:44 AM
158 measuring earnings risk in terms of deposits fleeing, migrating to higher paying instruments, or repricing. Usually as a
cost of funds per rate shock over time.
7/28/2015 8:32 AM
159 Interest rate risk what If scenarios are created and discussed monthly for to determine the impact to net interest
income in both an immediate across the board increase to all rates utilizing multiple rate environments, and also in a
proportional change to rates within the institution and the impact to earnings in that scenario.
7/28/2015 8:22 AM
160 Core deposit study, depositor behavior analysis during 2004-2007. 7/28/2015 8:20 AM
161 We have reviewed back testing and decay studies and well as reconducted these analysis. 7/28/2015 8:17 AM
162 Modeling funds moving to CD's at higher rates 7/28/2015 7:55 AM
163 Have collected decay numbers for last 10 years but fully realize that we may be entering into a completely new interest
rate environment this time as rates increase.
7/28/2015 7:46 AM
164 Performed a deposit study to determine how much of the deposit base is truly rate sensitive and developing a strategy
to compensate for any loss of deposits.
7/28/2015 7:27 AM
165 We have prepared several scenarios to determine the sensitivity of deposit fluctuations to the impact of profits. 7/28/2015 7:25 AM
166 n/a 7/28/2015 6:51 AM
167 Analysis of time deposit maturities and interest rate shocks. 7/28/2015 6:47 AM
168 reviewing average life of current deposit base as well as historical (10+ years) of deposit analytics and behavior 7/28/2015 6:41 AM
169 To determine how many will be sensitive to movement in the market 7/27/2015 7:11 PM
170 core study of non maturity accounts and incorporating results into interest rate risk program 7/27/2015 7:00 PM
171 We monitor duration of deposits as well as how they have reacted historically in our area to rate changes. 7/27/2015 6:29 PM
172 Updated NMD Analysis and What-If scenarios 7/27/2015 5:34 PM
173 Analysis, insider and 3rd party 7/27/2015 5:08 PM
174 Deposit mix 7/27/2015 4:57 PM
175 We run the shock testing based on various types of rising rates scenarios as well as quarterly liqudity test. Goal is to
provide insight to our prospective ROA as well as NEV.
7/27/2015 4:55 PM
176 Looking at maturities vs rates 7/27/2015 4:54 PM
177 Modeling different rate change frequencies to understand impact to cost of funds and net income 7/27/2015 4:51 PM
178 having discussions with our advisory service. 7/27/2015 4:43 PM
179 none 7/27/2015 4:35 PM
5 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
144 Working with ALM provider 7/28/2015 11:45 AM
145 Using rising rate environments in our ALM model. 7/28/2015 11:31 AM
146 Looking at maturities concentrations velocities and movement of funds 7/28/2015 11:04 AM
147 sensitivity analysis 7/28/2015 10:46 AM
148 Again, "What if" projections 7/28/2015 10:45 AM
149 Looking at short term rates 7/28/2015 10:20 AM
150 Creating scenarios that represent possible outcomes of the rate changes and putting numbers to those outcomes. 7/28/2015 9:59 AM
151 n/a 7/28/2015 9:54 AM
152 stress testing, EVE and NII simulation 7/28/2015 9:50 AM
153 what if scenarios in up rate increases 7/28/2015 9:41 AM
154 running simulations to see how new products effect the mix. 7/28/2015 9:07 AM
155 We look at how our rates are at current levels and how we would be affected at several different rate increases. 7/28/2015 9:06 AM
156 Measuring earnings at risk most specifically cost of deposits fleeing, migrating or repricing determined as a cost of
funds over a point of time at various rate shocks.
7/28/2015 8:57 AM
157 In house model 7/28/2015 8:44 AM
158 measuring earnings risk in terms of deposits fleeing, migrating to higher paying instruments, or repricing. Usually as a
cost of funds per rate shock over time.
7/28/2015 8:32 AM
159 Interest rate risk what If scenarios are created and discussed monthly for to determine the impact to net interest
income in both an immediate across the board increase to all rates utilizing multiple rate environments, and also in a
proportional change to rates within the institution and the impact to earnings in that scenario.
7/28/2015 8:22 AM
160 Core deposit study, depositor behavior analysis during 2004-2007. 7/28/2015 8:20 AM
161 We have reviewed back testing and decay studies and well as reconducted these analysis. 7/28/2015 8:17 AM
162 Modeling funds moving to CD's at higher rates 7/28/2015 7:55 AM
163 Have collected decay numbers for last 10 years but fully realize that we may be entering into a completely new interest
rate environment this time as rates increase.
7/28/2015 7:46 AM
164 Performed a deposit study to determine how much of the deposit base is truly rate sensitive and developing a strategy
to compensate for any loss of deposits.
7/28/2015 7:27 AM
165 We have prepared several scenarios to determine the sensitivity of deposit fluctuations to the impact of profits. 7/28/2015 7:25 AM
166 n/a 7/28/2015 6:51 AM
167 Analysis of time deposit maturities and interest rate shocks. 7/28/2015 6:47 AM
168 reviewing average life of current deposit base as well as historical (10+ years) of deposit analytics and behavior 7/28/2015 6:41 AM
169 To determine how many will be sensitive to movement in the market 7/27/2015 7:11 PM
170 core study of non maturity accounts and incorporating results into interest rate risk program 7/27/2015 7:00 PM
171 We monitor duration of deposits as well as how they have reacted historically in our area to rate changes. 7/27/2015 6:29 PM
172 Updated NMD Analysis and What-If scenarios 7/27/2015 5:34 PM
173 Analysis, insider and 3rd party 7/27/2015 5:08 PM
174 Deposit mix 7/27/2015 4:57 PM
175 We run the shock testing based on various types of rising rates scenarios as well as quarterly liqudity test. Goal is to
provide insight to our prospective ROA as well as NEV.
7/27/2015 4:55 PM
176 Looking at maturities vs rates 7/27/2015 4:54 PM
177 Modeling different rate change frequencies to understand impact to cost of funds and net income 7/27/2015 4:51 PM
178 having discussions with our advisory service. 7/27/2015 4:43 PM
179 none 7/27/2015 4:35 PM
5 / 9
Preparations in the Face of a Rising Rate Environment
180 Core deposit studies, and decay studies 7/27/2015 4:34 PM
181 Following State Guidelines. 7/27/2015 4:27 PM
182 We use Brick ALM software and consulting. 7/27/2015 4:22 PM
183 Liquidity stress tests 7/27/2015 4:21 PM
184 have not started 7/27/2015 4:19 PM
185 We are working with our ALM department to access interest rate sensitivity throughout the bank's balance sheet 7/27/2015 4:18 PM
186 Through Income Simulation - ProfitStars 7/27/2015 4:18 PM
187 range of outcomes from varying deposit betas and impact on liquidity 7/27/2015 4:16 PM
188 Maturities & rates of time deposits 7/27/2015 4:12 PM
189 Hot money sitting in savings account waiting for rates to increase. Customer willing to pay the penalty to take early
withdrawal and reinvest.
7/27/2015 4:11 PM
190 performing study, analyzing competitor rates 7/27/2015 4:09 PM
191 % of fixed rate vs floating deposits. % of MMA accounts to total shares 7/27/2015 4:09 PM
192 Looking at and quantifying disintermediation. 7/27/2015 3:59 PM
193 NMD analysis 7/27/2015 3:59 PM
194 Variety of deposit rate shocks 7/27/2015 3:58 PM
195 We review what we feel is "hot" money and understand our liquidity position and feel we are in a good position if rates
would suddenly rise. We rate shock all of our scenarios to ensure we are not overlooking anything.
7/27/2015 3:56 PM
196 Looking at decay rates and past history 7/27/2015 3:54 PM
197 Beta shocks to determine range of net interest impact 7/27/2015 3:53 PM
198 Core deposit study to identify high deposit balances, depth of relationship with institution, stickiness of relationship 7/27/2015 3:52 PM
199 Using ALM modeling 7/27/2015 3:50 PM
200 Evaluating the mix between time deposits and core deposits 7/27/2015 3:49 PM
201 Appreciating our relative isolation. 7/27/2015 3:49 PM
202 The risk is quantified through Modeling 7/27/2015 3:47 PM
203 Modeling early withdrawal of long term CDs 7/27/2015 3:47 PM
204 We are really trying to "know our customer" and trying not to incent customers not expected to remain customers for at
least 18 months.
7/27/2015 3:46 PM
205 Forecasted cash flows and risk analyses 7/27/2015 3:46 PM
206 EVALUATING OUR FINANCIAL, TECHNOLOGY, LABOR, AND LEGAL RISKS 7/27/2015 3:45 PM
207 Core deposit study done. 7/27/2015 3:45 PM
208 eyeballing it 7/27/2015 3:44 PM
209 Risk matrix with rate progression built in. Allows for quantifiable risk in % and $ based on various levels of short term
rate change
7/27/2015 3:43 PM
210 looking at potential moves as a % of the balance sheet by seeing how depositors acted in prior rate changes 7/27/2015 3:43 PM
211 Reviewing historical deposit flows and utilizing ALCO modeling software 7/27/2015 3:42 PM
212 rate shock simulations 7/27/2015 3:42 PM
213 See question 2 plus we are monitoring our most direct competition. 7/27/2015 3:41 PM
214 Evaluation of term and non term deposits and the duration. 7/27/2015 3:40 PM
215 stress tests and decay studies 7/27/2015 3:40 PM
216 Stress testing the maturity duration of existing checking customers 7/27/2015 3:39 PM
6 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
180 Core deposit studies, and decay studies 7/27/2015 4:34 PM
181 Following State Guidelines. 7/27/2015 4:27 PM
182 We use Brick ALM software and consulting. 7/27/2015 4:22 PM
183 Liquidity stress tests 7/27/2015 4:21 PM
184 have not started 7/27/2015 4:19 PM
185 We are working with our ALM department to access interest rate sensitivity throughout the bank's balance sheet 7/27/2015 4:18 PM
186 Through Income Simulation - ProfitStars 7/27/2015 4:18 PM
187 range of outcomes from varying deposit betas and impact on liquidity 7/27/2015 4:16 PM
188 Maturities & rates of time deposits 7/27/2015 4:12 PM
189 Hot money sitting in savings account waiting for rates to increase. Customer willing to pay the penalty to take early
withdrawal and reinvest.
7/27/2015 4:11 PM
190 performing study, analyzing competitor rates 7/27/2015 4:09 PM
191 % of fixed rate vs floating deposits. % of MMA accounts to total shares 7/27/2015 4:09 PM
192 Looking at and quantifying disintermediation. 7/27/2015 3:59 PM
193 NMD analysis 7/27/2015 3:59 PM
194 Variety of deposit rate shocks 7/27/2015 3:58 PM
195 We review what we feel is "hot" money and understand our liquidity position and feel we are in a good position if rates
would suddenly rise. We rate shock all of our scenarios to ensure we are not overlooking anything.
7/27/2015 3:56 PM
196 Looking at decay rates and past history 7/27/2015 3:54 PM
197 Beta shocks to determine range of net interest impact 7/27/2015 3:53 PM
198 Core deposit study to identify high deposit balances, depth of relationship with institution, stickiness of relationship 7/27/2015 3:52 PM
199 Using ALM modeling 7/27/2015 3:50 PM
200 Evaluating the mix between time deposits and core deposits 7/27/2015 3:49 PM
201 Appreciating our relative isolation. 7/27/2015 3:49 PM
202 The risk is quantified through Modeling 7/27/2015 3:47 PM
203 Modeling early withdrawal of long term CDs 7/27/2015 3:47 PM
204 We are really trying to "know our customer" and trying not to incent customers not expected to remain customers for at
least 18 months.
7/27/2015 3:46 PM
205 Forecasted cash flows and risk analyses 7/27/2015 3:46 PM
206 EVALUATING OUR FINANCIAL, TECHNOLOGY, LABOR, AND LEGAL RISKS 7/27/2015 3:45 PM
207 Core deposit study done. 7/27/2015 3:45 PM
208 eyeballing it 7/27/2015 3:44 PM
209 Risk matrix with rate progression built in. Allows for quantifiable risk in % and $ based on various levels of short term
rate change
7/27/2015 3:43 PM
210 looking at potential moves as a % of the balance sheet by seeing how depositors acted in prior rate changes 7/27/2015 3:43 PM
211 Reviewing historical deposit flows and utilizing ALCO modeling software 7/27/2015 3:42 PM
212 rate shock simulations 7/27/2015 3:42 PM
213 See question 2 plus we are monitoring our most direct competition. 7/27/2015 3:41 PM
214 Evaluation of term and non term deposits and the duration. 7/27/2015 3:40 PM
215 stress tests and decay studies 7/27/2015 3:40 PM
216 Stress testing the maturity duration of existing checking customers 7/27/2015 3:39 PM
6 / 9
Preparations in the Face of a Rising Rate Environment
217 for the past 5 years we have focused all products on service and not rates, we do not anticipate rate chasers in our
account base.
7/27/2015 3:39 PM
218 have completed historical analysis for up rates to study migration and decay rates to demand deposits 7/27/2015 3:39 PM
219 analyzing historical decay rates in prior changing rate environments as best we can given the unprecedented nature
and length of this down rate period
7/27/2015 3:37 PM
220 reviewing maturities, re-pricing some longer term CDs to try to re-set the portfolio before rates increase. Focusing on
fee sensitive and shorter-term loans to avoid long-term fixed rate risk.
7/27/2015 3:37 PM
221 rate shock scenarios and balance tiering 7/27/2015 3:34 PM
222 Using model to run different scenarios and stress testing 7/27/2015 3:34 PM
223 quantifying amount of surge deposits, concentration risk, on and off balance sheet liquidity and borrowing capacity,
ability and timeliness to sell assets if needed, etc.
7/27/2015 3:34 PM
224 Monthly funds management reporting utilizing a third party vendor to help with the number crunching. 7/27/2015 3:34 PM
225 We are doing a deposit study with the Darling Consulting Group. 7/27/2015 3:34 PM
226 We realize that our certificates have reduced over the last couple of years and expect that decline to continue; in
addition, we are monitoring the rates on our money market accounts to remain attractive
7/27/2015 3:33 PM
227 alm modeling and FHLB borrowing 7/27/2015 3:32 PM
228 Large deposit customer reviews. 7/27/2015 3:32 PM
229 Monthly reviews - interest rate risk and $ effect on income. 7/27/2015 3:31 PM
230 We are going over the different maturities of the CD's and quantifying which are core deposits and which are shoppers. 7/27/2015 3:30 PM
231 Forecasting our cost of funds versus loan yields with various steps of rising rates. Monitoring/tracking CD and loan
maturities out 3 years by the month.
7/27/2015 3:28 PM
232 worked with specials to change maturities to lengthen the maturity dates. Increased pre-payment penalties, looking
more to relationship deposits.
7/27/2015 3:27 PM
233 alm 7/27/2015 3:27 PM
234 Management of Excess Liquidity 7/27/2015 3:26 PM
235 1. Professional analytics 2. Historical perspective 7/27/2015 3:25 PM
236 Modeling interest expense increases if deposit mix moves back toward historical NMD & CD mix relationships. 7/27/2015 3:23 PM
237 reviewing maturity of loans and deposits and early withdrawal penalty on deposit and prepayment on loans 7/27/2015 3:23 PM
238 Offering longer term CD's 7/27/2015 3:22 PM
239 We have to balance our loan demands with our growth in core deposits. Right now our loan demands are about equal
to our growth in core deposits.
7/27/2015 3:20 PM
240 See # 2 7/27/2015 3:17 PM
241 Thru ALM projections and historical benchmarks 7/27/2015 3:13 PM
242 liquidity stress testing 7/27/2015 3:12 PM
243 in-house models and outsourced liability studies 7/27/2015 3:11 PM
244 Looking at products that lend themselves to "hot money" customers to determine runoff. 7/27/2015 3:08 PM
245 Using ALM Reports 7/27/2015 3:07 PM
246 Over a period of years we have gotten away from certificates. Most of our deposits are DDA, MM, and Sav accounts.
In a rising rate environment history has shown that these accounts are not subject to as much rate risk as the latter.
7/27/2015 3:05 PM
247 We monitor the rate shifts on a monthly basis to ensure we are ready for the rise in rates. 7/27/2015 3:04 PM
248 "what ifs" under different scenarios 7/27/2015 3:03 PM
249 Deversify 7/27/2015 3:03 PM
250 IRR simulations 7/27/2015 3:03 PM
251 Primarily increasing early withdrawal penalties. 7/27/2015 3:02 PM
7 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
217 for the past 5 years we have focused all products on service and not rates, we do not anticipate rate chasers in our
account base.
7/27/2015 3:39 PM
218 have completed historical analysis for up rates to study migration and decay rates to demand deposits 7/27/2015 3:39 PM
219 analyzing historical decay rates in prior changing rate environments as best we can given the unprecedented nature
and length of this down rate period
7/27/2015 3:37 PM
220 reviewing maturities, re-pricing some longer term CDs to try to re-set the portfolio before rates increase. Focusing on
fee sensitive and shorter-term loans to avoid long-term fixed rate risk.
7/27/2015 3:37 PM
221 rate shock scenarios and balance tiering 7/27/2015 3:34 PM
222 Using model to run different scenarios and stress testing 7/27/2015 3:34 PM
223 quantifying amount of surge deposits, concentration risk, on and off balance sheet liquidity and borrowing capacity,
ability and timeliness to sell assets if needed, etc.
7/27/2015 3:34 PM
224 Monthly funds management reporting utilizing a third party vendor to help with the number crunching. 7/27/2015 3:34 PM
225 We are doing a deposit study with the Darling Consulting Group. 7/27/2015 3:34 PM
226 We realize that our certificates have reduced over the last couple of years and expect that decline to continue; in
addition, we are monitoring the rates on our money market accounts to remain attractive
7/27/2015 3:33 PM
227 alm modeling and FHLB borrowing 7/27/2015 3:32 PM
228 Large deposit customer reviews. 7/27/2015 3:32 PM
229 Monthly reviews - interest rate risk and $ effect on income. 7/27/2015 3:31 PM
230 We are going over the different maturities of the CD's and quantifying which are core deposits and which are shoppers. 7/27/2015 3:30 PM
231 Forecasting our cost of funds versus loan yields with various steps of rising rates. Monitoring/tracking CD and loan
maturities out 3 years by the month.
7/27/2015 3:28 PM
232 worked with specials to change maturities to lengthen the maturity dates. Increased pre-payment penalties, looking
more to relationship deposits.
7/27/2015 3:27 PM
233 alm 7/27/2015 3:27 PM
234 Management of Excess Liquidity 7/27/2015 3:26 PM
235 1. Professional analytics 2. Historical perspective 7/27/2015 3:25 PM
236 Modeling interest expense increases if deposit mix moves back toward historical NMD & CD mix relationships. 7/27/2015 3:23 PM
237 reviewing maturity of loans and deposits and early withdrawal penalty on deposit and prepayment on loans 7/27/2015 3:23 PM
238 Offering longer term CD's 7/27/2015 3:22 PM
239 We have to balance our loan demands with our growth in core deposits. Right now our loan demands are about equal
to our growth in core deposits.
7/27/2015 3:20 PM
240 See # 2 7/27/2015 3:17 PM
241 Thru ALM projections and historical benchmarks 7/27/2015 3:13 PM
242 liquidity stress testing 7/27/2015 3:12 PM
243 in-house models and outsourced liability studies 7/27/2015 3:11 PM
244 Looking at products that lend themselves to "hot money" customers to determine runoff. 7/27/2015 3:08 PM
245 Using ALM Reports 7/27/2015 3:07 PM
246 Over a period of years we have gotten away from certificates. Most of our deposits are DDA, MM, and Sav accounts.
In a rising rate environment history has shown that these accounts are not subject to as much rate risk as the latter.
7/27/2015 3:05 PM
247 We monitor the rate shifts on a monthly basis to ensure we are ready for the rise in rates. 7/27/2015 3:04 PM
248 "what ifs" under different scenarios 7/27/2015 3:03 PM
249 Deversify 7/27/2015 3:03 PM
250 IRR simulations 7/27/2015 3:03 PM
251 Primarily increasing early withdrawal penalties. 7/27/2015 3:02 PM
7 / 9
Preparations in the Face of a Rising Rate Environment
252 Part of ALM modeling assumptins 7/27/2015 3:02 PM
253 looking at limited rate changes initially in order to gauge prospects of disintermediation 7/27/2015 3:01 PM
254 Running scenarios 7/27/2015 3:01 PM
255 Historical look at core deposit volumes, when rates have gone up. 7/27/2015 3:01 PM
256 GAP analysis 7/27/2015 3:01 PM
257 Beta and decay 7/27/2015 3:00 PM
258 Spreadsheets and core reports. Lots of different scenarios as who knows exactly how this will all play out. 7/27/2015 2:59 PM
259 decay study of deposits 7/27/2015 2:58 PM
260 We are starting to offer high rates on longer term CD's to minimize our interest rate expense going into the future. 7/27/2015 2:55 PM
261 running models 7/27/2015 2:55 PM
262 we measure maturity rates and times 7/27/2015 2:54 PM
263 Base case testing in a up rate environment. 7/27/2015 2:53 PM
264 Internal audit teams hired from outside firms to review depository risk. 7/27/2015 2:44 PM
265 Non maturing deposit analysis. 7/6/2015 9:14 PM
266 Reviewed 50 bps short term rate shock at quarterly ALCO meeting. As assets reprice and NII increases over two year
term, calculated rate changes/increases in non-maturity deposits necessary to erode NII increases.
6/23/2015 11:39 AM
267 Core deposit survey 6/23/2015 10:23 AM
268 We are making sure that we can loan out any new deposit money. That helps us determine the rate. 6/23/2015 10:05 AM
269 This is handled through our Finance Dept 6/23/2015 8:35 AM
270 ALCO chariman does modeling and we have a product risk committee 6/22/2015 4:18 PM
271 We have been rolling off high cost brokered CDs and are trying to replace them with core deposits. 6/22/2015 2:07 PM
272 run financial models 6/22/2015 12:30 PM
273 We discuss at alco each quarter and recently had our core deposit study updated. 6/22/2015 10:25 AM
274 We are trying to make sure we have a ladder that will allow us to take advantage of loanger term rates but allowing us
to have some that will be available in short term for increased loan demand or re-price as rates go up.
6/22/2015 10:18 AM
275 Using ALM "what if" models 6/22/2015 10:15 AM
276 We are looking at our current accounts, pricing and balances to determine the total balances that may be at risk 6/19/2015 3:43 PM
277 Again, reviewing deposit balances using historical info, including runoff rates. 6/19/2015 1:34 PM
278 Most of our conversation has centered on loans. 6/18/2015 8:24 AM
279 stress testing beta's and average lives in the ALM models, regression analysis on rates and balances 6/15/2015 3:58 PM
280 See previous answer 6/15/2015 2:30 PM
281 This is done as part of the ALM modeling referenced in a previous answer. 6/15/2015 12:58 PM
282 monitoring maturing certificates changed certificate penalties 6/15/2015 11:55 AM
283 Rate shocks continued focus on DDA 6/15/2015 10:40 AM
284 by reviewing other financial institution offers 6/15/2015 10:27 AM
285 Managing to specific volume limits on special rate products 6/15/2015 9:44 AM
286 forcasting analysis 6/15/2015 9:17 AM
287 Previously stated. 6/15/2015 8:15 AM
288 typical alm testing 6/15/2015 8:13 AM
289 Calling on all CD and MMA customers with balances in excess of $250M. 6/15/2015 7:33 AM
290 evaluating decay rates of non-maturity shares over time estimating liquidity issues if we are slow to raise deposit rates 6/12/2015 7:27 PM
8 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix252 Part of ALM modeling assumptins 7/27/2015 3:02 PM
253 looking at limited rate changes initially in order to gauge prospects of disintermediation 7/27/2015 3:01 PM
254 Running scenarios 7/27/2015 3:01 PM
255 Historical look at core deposit volumes, when rates have gone up. 7/27/2015 3:01 PM
256 GAP analysis 7/27/2015 3:01 PM
257 Beta and decay 7/27/2015 3:00 PM
258 Spreadsheets and core reports. Lots of different scenarios as who knows exactly how this will all play out. 7/27/2015 2:59 PM
259 decay study of deposits 7/27/2015 2:58 PM
260 We are starting to offer high rates on longer term CD's to minimize our interest rate expense going into the future. 7/27/2015 2:55 PM
261 running models 7/27/2015 2:55 PM
262 we measure maturity rates and times 7/27/2015 2:54 PM
263 Base case testing in a up rate environment. 7/27/2015 2:53 PM
264 Internal audit teams hired from outside firms to review depository risk. 7/27/2015 2:44 PM
265 Non maturing deposit analysis. 7/6/2015 9:14 PM
266 Reviewed 50 bps short term rate shock at quarterly ALCO meeting. As assets reprice and NII increases over two year
term, calculated rate changes/increases in non-maturity deposits necessary to erode NII increases.
6/23/2015 11:39 AM
267 Core deposit survey 6/23/2015 10:23 AM
268 We are making sure that we can loan out any new deposit money. That helps us determine the rate. 6/23/2015 10:05 AM
269 This is handled through our Finance Dept 6/23/2015 8:35 AM
270 ALCO chariman does modeling and we have a product risk committee 6/22/2015 4:18 PM
271 We have been rolling off high cost brokered CDs and are trying to replace them with core deposits. 6/22/2015 2:07 PM
272 run financial models 6/22/2015 12:30 PM
273 We discuss at alco each quarter and recently had our core deposit study updated. 6/22/2015 10:25 AM
274 We are trying to make sure we have a ladder that will allow us to take advantage of loanger term rates but allowing us
to have some that will be available in short term for increased loan demand or re-price as rates go up.
6/22/2015 10:18 AM
275 Using ALM "what if" models 6/22/2015 10:15 AM
276 We are looking at our current accounts, pricing and balances to determine the total balances that may be at risk 6/19/2015 3:43 PM
277 Again, reviewing deposit balances using historical info, including runoff rates. 6/19/2015 1:34 PM
278 Most of our conversation has centered on loans. 6/18/2015 8:24 AM
279 stress testing beta's and average lives in the ALM models, regression analysis on rates and balances 6/15/2015 3:58 PM
280 See previous answer 6/15/2015 2:30 PM
281 This is done as part of the ALM modeling referenced in a previous answer. 6/15/2015 12:58 PM
282 monitoring maturing certificates changed certificate penalties 6/15/2015 11:55 AM
283 Rate shocks continued focus on DDA 6/15/2015 10:40 AM
284 by reviewing other financial institution offers 6/15/2015 10:27 AM
285 Managing to specific volume limits on special rate products 6/15/2015 9:44 AM
286 forcasting analysis 6/15/2015 9:17 AM
287 Previously stated. 6/15/2015 8:15 AM
288 typical alm testing 6/15/2015 8:13 AM
289 Calling on all CD and MMA customers with balances in excess of $250M. 6/15/2015 7:33 AM
290 evaluating decay rates of non-maturity shares over time estimating liquidity issues if we are slow to raise deposit rates 6/12/2015 7:27 PM
8 / 9
Preparations in the Face of a Rising Rate Environment
Q2 What is your process for developing a
strategy or having discussions with
different lines of business to determine the
risk and possible opportunities?
Answered: 426 Skipped: 339
# Responses Date
1 We have created a monthly committee containing key LOB leaders to understand growth/attriction strategy for each
LOB that meets the banks' overall funding needs and strategy
8/18/2015 1:18 PM
2 Review of all products and WAL Review of current NEV 8/14/2015 12:44 PM
3 We have limited the amount of loans we will do that are fixed for over 4.5 years. Each month we review the total "long
term" loans as a % of earning assets to set our limitations
8/14/2015 10:04 AM
4 During underwriting we shock the payment for a 1% increase to the rate 8/14/2015 7:24 AM
5 Asset-liability committee consisting of senior officers and 3 directors of the Board 8/13/2015 2:50 PM
6 Various analysis and what if scenarios related to loans, deposits and bonds. We also are considering the impact on
liquidity.
8/13/2015 11:02 AM
7 Management meetings 8/12/2015 10:40 AM
8 We have positioned ourselves with short maturities on investments and loans. 8/12/2015 7:53 AM
9 Analyzing rates and tiers of our products vs our competitors 8/11/2015 5:35 PM
10 Board of directors and ALCO group along with other vendors 8/11/2015 3:56 PM
11 Meetings with businesses are scheduled to discuss these and other topics to form a consensus on how to handle
them.
8/11/2015 1:02 PM
12 Including all lines of business 8/11/2015 12:58 PM
13 Reviewing maturities, pricing, and products that will position us favorably for rising rates. increasing variable rate loans
while keeping maturities shorter on fixed rate loans.
8/11/2015 11:31 AM
14 Identify rate sensitive accounts 8/11/2015 10:25 AM
15 Review your beta's on your NMD for ALM. To achieve the results from your model, you must implement similar action
when rates move. Have deposits stratified to the point where you can monitor activity very quickly. We must be nimble
when approaching this issue, but don't be too fast to react as that will hinder returns.
8/11/2015 9:29 AM
16 Constant pricing discussions w/CFO & CEO 8/11/2015 7:48 AM
17 We are trying to stay short on our asset yields, and thus are pricing teh shorter amortized loans more agressively than
the longer amortizing loans.
8/11/2015 7:10 AM
18 We are watching the local and global economy. 8/10/2015 6:39 PM
19 ALCO meets monthly to discuss rates. 8/10/2015 5:06 PM
20 continuous strategic plan and review. 8/10/2015 4:50 PM
21 Meet with lending staff members to see just what the competition is offering and looking for ways to offer similar terms
while hedging for interest rate risk.
8/10/2015 4:06 PM
22 Discussion at ALCO 8/10/2015 3:49 PM
23 Well, we review our interest rate risk reports carefully. We know by past reporting that we are asset sensitive so we
should do better in a rising rate environment.
8/10/2015 3:03 PM
24 Comparing various rates by period for extended periods of time and various rate types. Looking at developing new
products to answer both short term and long term needs of members and credit union. Talking to ALM advisor about
various strategies
8/10/2015 1:49 PM
1 / 13
Preparations in the Face of a Rising Rate Environment
Table 3 (Question 7 Responses) Continued
Survey Results — Appendix
252 Part of ALM modeling assumptins 7/27/2015 3:02 PM
253 looking at limited rate changes initially in order to gauge prospects of disintermediation 7/27/2015 3:01 PM
254 Running scenarios 7/27/2015 3:01 PM
255 Historical look at core deposit volumes, when rates have gone up. 7/27/2015 3:01 PM
256 GAP analysis 7/27/2015 3:01 PM
257 Beta and decay 7/27/2015 3:00 PM
258 Spreadsheets and core reports. Lots of different scenarios as who knows exactly how this will all play out. 7/27/2015 2:59 PM
259 decay study of deposits 7/27/2015 2:58 PM
260 We are starting to offer high rates on longer term CD's to minimize our interest rate expense going into the future. 7/27/2015 2:55 PM
261 running models 7/27/2015 2:55 PM
262 we measure maturity rates and times 7/27/2015 2:54 PM
263 Base case testing in a up rate environment. 7/27/2015 2:53 PM
264 Internal audit teams hired from outside firms to review depository risk. 7/27/2015 2:44 PM
265 Non maturing deposit analysis. 7/6/2015 9:14 PM
266 Reviewed 50 bps short term rate shock at quarterly ALCO meeting. As assets reprice and NII increases over two year
term, calculated rate changes/increases in non-maturity deposits necessary to erode NII increases.
6/23/2015 11:39 AM
267 Core deposit survey 6/23/2015 10:23 AM
268 We are making sure that we can loan out any new deposit money. That helps us determine the rate. 6/23/2015 10:05 AM
269 This is handled through our Finance Dept 6/23/2015 8:35 AM
270 ALCO chariman does modeling and we have a product risk committee 6/22/2015 4:18 PM
271 We have been rolling off high cost brokered CDs and are trying to replace them with core deposits. 6/22/2015 2:07 PM
272 run financial models 6/22/2015 12:30 PM
273 We discuss at alco each quarter and recently had our core deposit study updated. 6/22/2015 10:25 AM
274 We are trying to make sure we have a ladder that will allow us to take advantage of loanger term rates but allowing us
to have some that will be available in short term for increased loan demand or re-price as rates go up.
6/22/2015 10:18 AM
275 Using ALM "what if" models 6/22/2015 10:15 AM
276 We are looking at our current accounts, pricing and balances to determine the total balances that may be at risk 6/19/2015 3:43 PM
277 Again, reviewing deposit balances using historical info, including runoff rates. 6/19/2015 1:34 PM
278 Most of our conversation has centered on loans. 6/18/2015 8:24 AM
279 stress testing beta's and average lives in the ALM models, regression analysis on rates and balances 6/15/2015 3:58 PM
280 See previous answer 6/15/2015 2:30 PM
281 This is done as part of the ALM modeling referenced in a previous answer. 6/15/2015 12:58 PM
282 monitoring maturing certificates changed certificate penalties 6/15/2015 11:55 AM
283 Rate shocks continued focus on DDA 6/15/2015 10:40 AM
284 by reviewing other financial institution offers 6/15/2015 10:27 AM
285 Managing to specific volume limits on special rate products 6/15/2015 9:44 AM
286 forcasting analysis 6/15/2015 9:17 AM
287 Previously stated. 6/15/2015 8:15 AM
288 typical alm testing 6/15/2015 8:13 AM
289 Calling on all CD and MMA customers with balances in excess of $250M. 6/15/2015 7:33 AM
290 evaluating decay rates of non-maturity shares over time estimating liquidity issues if we are slow to raise deposit rates 6/12/2015 7:27 PM
8 / 9
Preparations in the Face of a Rising Rate Environment
291 Deposits at risk is routinely included as part of our quarterly ALCO review. 6/12/2015 4:23 PM
292 segmenting large deposit account into the following categories each month: <$250k, <$100k, <$25K in order to
identify potential decay rates once rates begin rising.
6/12/2015 4:12 PM
293 N/A 6/12/2015 3:57 PM
294 Projecting decay rates and also perfroming worse case scenario deposit loss simulations. 6/12/2015 3:31 PM
295 We have an asset liability committee to do that 6/12/2015 3:09 PM
296 Reviewing 20 largest depositors Sensitivity analysis based on historical data 6/12/2015 3:06 PM
9 / 9
Preparations in the Face of a Rising Rate Environment
References
http://data.bls.gov/timeseries/LNS14000000 (Unemployment Rate)
http://finance.yahoo.com/q/hp?s=%5EGSPC&a=00&b=1&c=2000&d=08&e=17&f=2015&g=m&z=66&y=0 (Historical S&P 500)
http://finance.yahoo.com/q/hp?s=%5EIXIC&a=00&b=01&c=2000&d=08&e=17&f=2015&g=m&z=66&y=0 (Historical NASDAQ Composite)
http://www.ncua.gov/Legal/Documents/Reports/AR2007.pdf (Historical Credit Union Institution Data from NCUA)
http://www.ncua.gov/Legal/Documents/Reports/AR2008-2009.pdf (Historical Credit Union Institution Data from NCUA)
http://www.ncua.gov/Legal/Documents/Reports/AR2013.pdf (Historical Credit Union Institution Data from NCUA)
http://www.ncua.gov/Legal/Documents/Reports/AR2014.pdf (Historical Credit Union Institution Data from NCUA)
http://www.ncua.gov/Legal/Documents/Reports/2014-Historic-Stats.pdf (Historical Credit Union Institution Data from NCUA)
https://www.fdic.gov/bank/statistical/stats/2015jun/fdic.html (Historical Bank Institution Data from FDIC)
http://www.federalreserve.gov/releases/h15/data.htm (Historical Federal Funds Rate)
http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm (Historical Prime Rate)
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart (Historical Dow Jones Industrial Average)
http://www.usinflationcalculator.com/inflation/current-inflation-rates/ (Historical Inflation Rate)
Preparing for a Rising Rate Environment: The Landscape Transformed | Page 57
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