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Long-term financial and capital planning should be based on the bank’s strategic plan. MAi has developed a model, whereby financial objectives established in the strategic plan along with growth, expansion, product development, capital expenditures, and rate and yield assumptions are incorporated into the long-term financial and capital plan. A summarized three-to-five-year pro forma balance sheet and income statement are produced. Once the three-to-five-year plan is fine-tuned and approved, the annual budget should be prepared based on the first year of the financial plan as well as goals and objectives established in the strategic plan. Long-term financial and capital plans, as well as the annual budget, should be prepared to test and validate strategic plan goals and objectives, and provide monitoring methodology. Sound planning processes will ensure that your bank performs at its highest level.
Strategic planning is the most powerful management tool available today. A comprehensive plan that is communicated throughout the organization ensures that the Bank’s Board of Directors, management, and staff are all working toward common goals and objectives in an organized manner. The strategic plan is a prerequisite for successful long-term financial and capital planning and annual budgeting. MAi assists community banks with strategic planning. We organize the planning process, facilitate planning meetings, and document the plan. Strategic planning goals and objectives should be validated through the bank’s financial plan, capital plan, and annual budget. Sound planning processes will ensure that your bank outperforms its competition.
Management studies result in more effective management processes that will positively impact the bank’s bottom line. MAi performs management studies which are customized to meet individual bank’s needs. Typically, the effectiveness of the bank’s organizational structure and the management team is reviewed. Management information systems and processes are evaluated. Planning processes and communication systems are reviewed as well as the content and quality of management and board reporting. Selected policies are reviewed to assure they are up-to-date and provide adequate guidelines from the Board of Directors to management. At the conclusion of the review, any weaknesses in the management process and recommendations for remedial action are documented.
MAi offers comprehensive and customized asset and liability (ALM) management services to assist you in identification, measuring, monitoring, and controlling interest rate risk. MAi will assist in implementing the ALM management process including: ALM and investment policies, membership of the ALM Committee, the committee agenda, scheduling, and reporting requirements. Our ALM program is action-oriented and ensures decisions are formulated, implemented and reviewed, and appropriate communications take place within the organization.
Changes in interest rates can have a major impact on a bank’s earnings, capital, and economic value. Our review will meet the requirements of the most recent interagency guidance and covers the adequacy of related internal control systems, the appropriateness of the Bank’s risk measurement systems, the accuracy of data input into the system, the reasonableness of assumptions, and the validity of risk measurement calculations, all relative to the size and complexity of the bank. MAi will provide recommendations and suggestions for improving your interest rate risk management process. This review will ensure that your bank is properly measuring, managing, controlling, and reporting interest rate risk.
MAi has developed a comprehensive liquidity planning process that projects future liquidity needs in accordance with current regulatory guidelines.
The process includes a risk assessment and identification of contingent liquidity sources. Current and projected liquidity needs are compared to approved ranges and exceptions are identified. The system also provides “stress-testing” the bank’s liquidity position under adverse circumstances.