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ASSET/LIABILITY MANAGEMENT CLIENT First National
Bank of Volga CHALLENGE The bank contacted PMC to assist with the utilization of Profitstar. Previously the bank had purchased the software but was unsuccessful in obtaining a clean download of data. The bank did not have a formal Asset/Liability Management Committee structure and had seen a declining trend in their Net Interest Margin. SOLUTION PMC assisted the bank in creating greater detail in the bank's general ledger and revamped the method in which Profitstar downloaded. Custom ratios were developed, Asset/Liability policy and procedures were developed along with a formal ALCO committee structure. Significant training and transfer of skills and knowledge occurred with the President and the management team. RESULTS Bank management identified pricing opportunities to improve the Net Interest Margin. Profitstar provided management with a projection that would show the expected outcome of the proposed pricing changes. A 12 month projections identified an improvement of about 30 bts., equal to approximately $65,000 increase in Net Interest Income on an annual basis. In less than 12 months the new projected NIM was realized.
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