What is interest rate risk for credit unions?

Interest rate risk (IRR) for credit unions is the exposure of a credit union's financial condition to adverse changes in interest rates. It affects net interest income and the economic value of equity. Credit unions manage IRR through Asset/Liability Management (ALM) models that analyze how rate changes impact earnings and capital.

How does TCT's IRR Management Suite help credit unions?

TCT's IRR Management Suite provides a comprehensive ALM model with earnings-at-risk methodology. It gives credit unions real-time analytics, stress test scenarios, and actionable insights to maximize balance sheet performance while maintaining sound interest rate risk management in compliance with NCUA regulatory expectations.

What is earnings at risk (EAR) analysis for credit unions?

Earnings at risk (EAR) analysis measures the potential decline in net interest income over a defined period if interest rates change by a specified amount. For credit unions, EAR is a key component of ALM modeling and helps boards and management understand the income impact of various interest rate scenarios.

Interest Rate Risk Management Suite

Maximize Your Balance Sheet to Maximize Your Earnings

TCT's ALM model offers credit unions a comprehensive and statistically valid methodology that supports best practices in Interest Rate Risk management built on state of the art earnings at risk methodologies.

ALM Base Case Reports

TCT's Base Case reports utilizes the credit union's core financial indicators to provide a robust measure of interest rate risk currently present over a five-year period and in five different shock scenarios.

ALM Simulation Tool

Know the impact of your decisions on net interest income, net earnings, and equity before you act. This online tool allows you to model your budget assumptions, test strategies and assure regulatory compliance on a regular basis.

IRR Limits Calculation Tool

Credit unions use this online tool to create equity-based limits for IRR exposure. Assure that your IRR limits are compliant and reasonable and support your short and long-term goals.

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