Core Deposit Analysis

MountainView's core deposit analysis enables higher performance balance sheet management, without higher interest rate or liquidity risk, by providing quantitative answers to key deposit balances supplied and value questions.

Core Deposit Analysis

Our deposit analysis solutions empower you to quantify vital balance sheet inputs, including repricing, core deposit average lives, present values and premiums, the supply sensitivities of deposits to changes in rates paid and interest rates and minimum liquidity needs. To support mandates for sensitivity testing, our standard results are augmented to show impacts of shorter truncations (50% and 75% shorter). We identify surge balances (aka hot money) and take them into account in our analyses.

Our services empower your institution to:

  • Attain a lower cost of funds and more interest expense stability by precisely understanding the balances supplied behaviors of deposits
  • Specify more disciplined repricing responses to interest rate changes
  • Accurately measure interest rate risk (IRR), with least loss in current performance
  • Precisely control liquidity positions by applying quantified deposit behavior data
  • Strongly communicate true franchise value to capital markets and other audiences

Powered by McGuire Advanced Assessment Methodology

The historic record of your depositors paints a detailed picture of their revealed preferences relating to core deposit supply and retention and other behaviors. Specifically, history tells us exactly how your depositors have reacted (or not reacted) to changes in financial influences such as rates and rate spreads over time. Your institution's rate paid history does the same for your repricing.

MountainView applies a high powered and sophisticated statistical methodology to comprehensively quantify your uncertain deposit behaviors using McGuire Advanced Assessment Methodology. This advanced econometric approach analyzes historic deposit data as a simultaneous equations system that reflects banking practice and consumer decision theory. Our approach produces higher precision forecasts that quantify scenario deposit total balances supplied, rates paid, and retention behaviors, plus identifies inter-category dependencies. We maintain unambiguous links from the data to all applications with a view to ensuring that audit trails are clear and complete.

Our core deposit analysis produces:

  • High precision quantification of historic behaviors that explain the drivers of past trends
  • Scenario and time period specific forecasts that define direct inputs into financial models
  • Defensible regulatory compliance inputs that free managers to add earnings performance

Comprehensive Deposit Analysis

Our comprehensive deposit analysis is for institutions that seek to fully understand and leverage deposit behavior and value relationships for higher performance and compliance satisfaction. Based on our analysis, you can make improved pricing and deposit supply decisions that reduce liquidity needs and control your cost of funds. With this analysis, MountainView can help you produce higher levels of current income, while maintaining your IRR compliance. We do this by providing you with better matching of assets to fully quantified core deposit average life, premium and duration information across multiple interest rate scenarios.

Express Deposit Analysis

We deliver our express deposit analysis to institutions that choose to more economically measure IRR in order to maintain current income performance and meet regulatory requirements.

As part of this service, MountainView delivers to you a streamlined report that provides core deposit liquidity information plus income and equity at risk IRR core deposit term and value inputs. Our report presents accurate and defensible information on core deposit balances supplied behaviors and repricing, plus average lives, durations, and premiums across multiple rate shock scenarios.

Repricing/Runoff Analysis

We offer a repricing/runoff analysis for our clients that want to obtain core deposit inputs for their ALM models. Using McGuire Advanced Assessment Methodology, we provide you with tailored category level core deposit ALM model inputs for base case (current rates) and for +500/-300 bp rate shocks, in 100 bp increments. We deliver to you repricing and runoff data as spreadsheet values and provide you with calculated beta coefficients, average lives, present values, and effective durations for reference or use as override inputs. MountainView formally back tests prior year actual runoff against forecasted values and our statistical analyses are updated annually as part of our three year commitment to you.