Cost of Funds Benchmark Report

[Download Sample Report ] (Updated 12/7)

Before a bank can manage its liabilities, it must begin by benchmarking its performance in order to track progress and better understand sensitivities. The report compares banks against the following benchmarks:

• Average bank - Tracks performance against up to 4,000 banks in order to establish a precise numerical percentile ranking and comparison to a group median. Performance is displayed in both statistical and graphical formats. Through this view, industry trends can be uncovered and relative performance better quantified. This customizable average is more meaningful than rigid UBPR/UTPR analysis.
• Funding Band Analysis - Establishes a statistical funding band against historical performance, allowing management to better understand changes, relative to internal funding constraints and goals. Through this report, "alarm" bands can be established alerting management when funding costs increase at a greater percentage than market rates. This analysis not only tracks past performance, but allows funding managers to set future targets.
• Live Rate - This third benchmarking methodology tracks an institution's cost of funds against a market rate, such as 1-month Libor. This allows banks to better ascertain which market index they are most correlated to and the time lag between their cost of funds and a given market index. In this manner, management gains insight into how changes in market rates effect the institution's cost of funds, and leverages the futures market to project funding costs.

By utilizing the Cost of Funds Report, banks can prevent funding mistakes that could end up costing thousands of dollars. Running the report requires no time or resource allocation at the bank level, allowing you to focus resources on better using the output to get results.

What can be gained by the Cost of Funds Report?

By using this product, management can:

1. Chart how deposit costs react to changes in market rates
2. Understand how funding changes compare to competitors
3. Create funding strategies that will have the greatest impact on cost of funds
4. Validate existing or proposed strategies and document performance
5. Back test A/L model assumptions on funding interest rate sensitivity
6. Know how the institution compares to case studies featured in PCBB/BIG webinars and CFO conferences

The report is also ideal for boards of directors, ALCO, regulators or shareholder meetings and is helpful for institutions of all sizes. The analysis is a great motivator and tool for internal funding departments (including advertising, marketing, and funds management).

Support

Subscribers automatically receive their reports via e-mail approximately 5 days after the engagement begins. Delivery of the report also comes with an optional 30-minute telephone consultation explaining findings and discussing possible strategies. Benefit from our many years of experience working with institutions like yours.

Cost

The report can be run on a one-time basis for $500 or on a quarterly basis (2 quarter minimum) for $350 per quarter. There is no contract and you can cancel at any time.

Getting Started

Funding strategy is especially important in today's interest rate and highly competitive environment. By receiving enhanced feedback about your bank's performance, management can turn that knowledge into net income!

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