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THE PLANSMITH COMPASS

1. O Commercial 5 accounts Projections f f i To see totals for groups of accounts Loans a Projections Budget Maturity Variance FedFunds Notes 3 ama peat a Targat New Oftating Tota PR Avetage SI m ply cl ick on the folde r that CO nta l ns 3 Commercial Loane er wa T n Balano eg Maturities Kiate Interest Yield Balano EA cpa Loans Un hange e B SBA Lams Uroworen mi mee the accounts or folders you would like to g Aed Esae 2007 _Jan 64 319 415 409 761 64144 re Feb 60 578 360 788 7 36 61 682 d 4 enan ss a e see summarized D Personal Loans Ap 59 608 337 265 695 581 Non I Loars M 64 023 383 802 7 36 61 21 Sot nun ag 3 ee Gy Lom Lors Rese Sate sean Tat In the example on the left we have ity ee a see te er highlighted Commercial Loans In the a Other Assets 406983 735 6469 yy Liabilities 2008 Jan 71 518 235 719 3 072 777 455 758 7 41 71 302 T Ban i ee account screen we have all the data for E Personal ODA Mar 70 049 499 7 19 1 207 7 70 436 879 7 25 70 403 E NonPeteonal DOA ae 71 z 338 7 96 2 258 t a a x m D DOA ay 72 21 3 279 7 79 2197 7 45 9 466 7 17 71 65 Po aan e a ta ts ta a the 5 accounts with this folder S NOW Account Jul 74 337 2 9652 7 78 1 659 7 11 456 696 7 22 73 835 E Personal NOW Accts Aug 75 501 3423 763 2309 735 465 316 725 74 944 E NonPersonal NOW Accts Sep 76 625 4 368 7 47 3244 7 65 461 097 7 27
2. Account Category List Select Plan Training Bank Balance Sheet BE 7a tL ssets Liabilities CJ Capital Income Statement L Off Balance Sheet Items C Memo Items Interest Rates H E E Data Item List Account Properties Data Wizard Selected Category Account Assign C Subcategories Accounts C All Subcategories C All Subcategories and Accounts Assign J Include Plan Reference NV Substitute Descriptors Indent Levels ea ial Sanaa J To pullin the plan s function codes check the Substitute Descriptors box highlight a cell on your worksheet select an account category such as Assets shown in Example A E oes and double click the account category to reveal the El peer 5 ENEE subcategories Pull the Subcategories and or Accounts 22 ont gt nisin ontecon an a into the worksheet by selecting the corresponding radio a gt ea one button from the list Finally select either the vertical or 26 c aada ee ee 27 00242 horizontal Assign option to populate the cells 29 c aadb Example A To populate the names for each subcategory and or account move the cursor on the worksheet to an adjacent column or row uncheck the Substitute Descriptors option as shown in Example B and select either the vertical or horizontal Assign option After you finish building your report you can hide any column or row that contains function codes to enhance the appearance of y
3. Description Data Type Jan Feb Mar Apr May Jun Jul Aug 2007 2007 2007 2007 2007 2007 2007 2007 2 aada Total Commercial rld T 61 T 36 T 43 6 96 7 36 T 55 7 81 762 3 aadbb Total Residential rld 10 19 7 46 74d 7 46 7 42 7 45 7 46 7 46 4 aadc Total Personal Loans rld 6 78 6 98 6 97 6 89 T 15 T 55 T 50 Tf z 6 Select the Custom function for Row 5 Formula Editor Please enter the formula description Custom Enter the formula below RF J A Hote Please use the letter R to refer to a generic row location For example to add the contents of rows 1 through 10 and then subtract row 15 enter SumlA1 AT O A1 5 Note how the letter R for row is required with each row number to be added When OK is selected the calculated values will appear in Row 5 Along with the standard and functions you may also use the sum function Ref Description Data Type E Fo G H o J E L 1 Jan Feb Mar Apr May Jun Jul Aug 2007 2007 2007 2007 2007 2007 2007 2007 AEE Total Commercial id 761 7 36 733 6 96 7 36 7 55 7 81 7 62 3 aabb Total Residential id 10 19 7 46 7 44 7 46 7 42 7 45 7 46 7 46 lee Total Personal Loans vid 6 78 6 98 6 97 6 89 7 15 7 55 7 50 7 37 al ute 9458 2180 2174 2131 21 93 2255 2977 22 45 5 88 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 We can change the title from Custom to T
4. 45 40 3 5 3 0 2 5 20 Now you ll need to create the scenario This can be acomplished in a couple of ways The first way would be to type or copy rates into the rate list at right You can enter the rates into the Result column or enter a spread Automate Fed Funds 020 ooo 0 20 ea ee 6moTbil 20 0m iwtMT 030 oim EER p 2wCMT 50 0 00 EER SyCMT 6 0 00 EES SywCMT 1 30 0 00 WOwCMT 270 om E 9 SOyCMT 00 om E 4 zt 1 5 1 0 oO O45 O O o gt may A A AA A FFF HF HF HF SK S amp 2 oS 4 a oF o of s Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The second method is to drag the Yield Curve or various points to the shape you desire 5 5 5 0 45 3 aa Right clicking on the current curve will allow you to drag the 35 entire curve at once 3 0 oe Note that the curve will automatically change color if it is aa deemed likely or unlikely by the RateHistoryAnalyzer Non aa Yield Curve rates will change automatically based upon the 05 new curve 0 0 In order to view greater detail for each scenario or show all scenarios on the screen various display options are available by selecting your desired view Here we are viewing all Active Scenarios Viewing Results The Non Parallel Rate Shock results can be accessed via the Risk Compass report package as well as within the Compass reports and using the Excel Add In
5. ad 5 7 P 5 i i E i x ma lel oh ay eye el feliz M Corporate Bonds Maturity Balance Sheet 2 Projections Budget Maturity Yarance Callable Fed Funds Hotes EI Assets ea Cash amp Due Last EOM Balance 598 Total Scheduled Maturities pro Balance Difference HET Tae Cash EDM vield 1 67 Rate 1 67 Yield Difference DD be E Due From Banks hais E 1B Due From Banks po Ad Et Fed Funds Sold Scheduled Adi Scheduled Scheduled Bb he E Fed Funds Sold scheduled Maturities Scheduled Matz Scheduled PrePrits New Matu El 0 Securities Maturities State Maturities rate PrePrits State Maturities Tg GUUS Treasuries UserEdit User Edit No Model ie US Treasuries E Sep I _ U 5 Agencies Oct 130 1 59 130 1 59 0 0 00 0 BB he E US Agencies Nov 0 0 00 0 0 00 0 0 00 0 A _Y Mortgage Backed Securities Dec 5 3 12 5 3 12 0 0 00 0 MES 2014 Jan 0 0 00 0 0 00 0 0 00 0 Bi a Municipal Securities Feb 104 1 25 104 1 25 0 00 0 poopoo he Municipals Mar 0 00 0 0 00 0 0 00 0 o S Marketable Securities Apr 103 1 70 103 1 70 0 0 00 0 g a Other Secunties May oO 0 00 0 0 00 0 0 00 0 EB Money Market Acct Jun 104 1 44 104 1 44 0 0 00 0 m E Investment COAR s Jul 0 0 00 0 0 00 0 0 00 0 a Corporate Securities Aug 0 0 00 0 0 00 0 0 00 0 popo be Corporate Bonds Sep a 0 00 D 0 00 0 0 00 0 2l a Gross Unrealized AFS G L Oct 0 0 00 0 00 0 0 00 0 aL ba E Unreal Gains Losses oy Fae 1 69 B6 1 69 0 0 00 0 E 44
6. 1 1 discount rate 12 100 u t Pe The discount rate is for that specific period and the number of years is counted from the start Number of years for 1 month out is 1 12 The market value is determined by summing all of the discounted cash flows for this account Cash flows on adjustable rate accounts can include repricing balances if the Weighted Average Repricing Date WARD option in the Account Wizard is set to yes Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Duration Duration is determined by multiplying each discounted cash flow by the number of months from the start summing those numbers and dividing by the market value Principal Payment Total maturity adjusted scheduled maturity pre payment balloon payment Adjusted scheduled maturity scheduled maturity amortization of prior pre payments Amortization determined by account property rate of amortization Interest Payment Determine number of months nom for interest payment 1 If account property Payment Frequency at term then nom number of months entered for new maturity attribute representing the amortization or single payment period Interest period total maturity period exit rate 12 nom If nom still is zero then use the following Calculation 2 If account property Payment Frequency anything other than at term a For 60 monthly time periods interest is calculated for ea
7. 72 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Risk COMPASS We suggest you perform the parallel and non parallel shocks using Financial Compass the same parameters If you have not set them as the same you may get a message like this The Rate Shock and Yield Shock data are not synchronized due to the following problem s If you proceed the parameters will not be equal and non parallel One is ramped and the other not ramped shock data will be absent from the report Due to these discrepancies no Yield Shock data will appear in the Risk Compass report Do you wish to proceed anyway Non Parallel Rate Shock Market Value of Equity No 15 a a eea The Risk Compass report package is set up to automatically adjust for the Non Parallel analyses Two new charts provide results for the NIM and EVE simulations Market Value of Equity Ratio oe Nw Son Oost ow ow scen 0 Scen 4 scen s Scen 3 scen 1 Scen 2 Seen Scen 5 Seen amp E Minimum Equity Requirement Comparison for each simulation is to the same data Zero Point as the Parallel shock The Zero Point data will show in red The minimum requirement for the income simulation will default to the Minimum Margin ratio from the Risk Tolerance The minimum requirement for the EVE will default to the minimum equity ratio as designated in the Utilities Options Details of Worst Case Scenarios Zero Point
8. Navigating an SBU Consolidation It is recommended that you ALWAYS access the branch or department plans through the consolidated plan Even if you just wish to change one item in a particular plan you should access the individual plan through the Consolidation screen Compass will always assume that your Plan mdb files reside within the same folder and use the same naming conventions If you move the plans to a new folder Compass will retain the link among the sub plans IMPORTANT However if you change the name of any of your sub plan files residing in the folder you MUST enter the consolidation screen right click on each plan box click on Properties and make sure the name is corrected there for each plan To open a branch or department plan either double click on the plan box you wish to open or right click and select Open Plan After exiting the individual plan you will return to this screen Notice that one of the boxes appears in Red This means that this plan is designated as a Cost Center The plans in Blue are designated Profit Centers plans with balance sheet data 102 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 HOW THE SBU CONSOLIDATION WORKS To run the SBU consolidation routine make sure you are in the SBU or Total Bank plan Select the Compute the Plan option and you will see the Compute box below Plan Compute 334 Select a scenario EE Plan ha Ez Step 1 Diagnostics Hi Step 2 C
9. To correlate accounts locate the appropriate Compass account in the right hand table that you want to link Select the account by clicking on the name Then while holding the left mouse button down drag it from the 97 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 right hand column to the middle Link to column lining it up with the Consolidated Plan s account Release the mouse button and the account will be properly correlated If you did not correlate this account prior to running the Add em Up routine you would receive a notice on the Consolidation Error log that the data did not get consolidated and you would need to correlate the account as outlined above ADDING NEw ACCOUNTS Anytime you add a new account to your general ledger you need to add that account in the consolidated plan as well as each plan within the Consolidation You also need to correlate the new account using the plan s Consolidation Correlation Table To update simply right click on the plan box and select Correlate Accounts Total Holding Company Fliminations 4 ilar Bank Open Plan Remove Plan Correlate Accounts Properties To correlate new accounts follow the same procedures as previously outlined above Locate the Compass account in the right hand table that you want to link Select the account by clicking on the name Then while holding the left mouse button down drag from the right hand column to the m
10. Example of Distribute replace existing After Edit Branch 01 Branch 02 Branch 03 Branch O4 Manual Manual Manual Manual Manual Manual Ok Sep 13 000 243 2 500 2000 0 f Annual growth rate Oct 13 000 2 dll aU 2 000 0 ip ear pica Nov 13 000 2 377 2 500 2 000 0 f Ramp fromto a value Dec j 13 000 2 394 2 500 2 000 A 2007 Jan 13 058 2 422 2511 2 005 0 aggregating Offset f Distribute replace existing Feb 13 046 2 430 2 09 UN U C Distribute as offset Mar 13 035 2 455 2 907 2 005 0 Apr 13 024 2 468 2 505 2 004 0 mE May 13 013 2 482 2503 2002 i Juri 13 002 2407 2 500 2 000 0 ne Aug 12 980 2527 249 1 997 i 20 000 Average Sep 2 968 2543 2454 495 0 Trana i Oct 12 957 2 550 2 492 1353 0 Nov 12 946 anne 2 450 1 992 0 Dec 12 535 cast 2 400 1 930 l The replacement values are distributed proportionately For example the total dollars for 2007 are 240 000 which divided by the twelve highlighted months equals a total expense of 20 000 monthly In January 2007 the monthly value of 20 000 is an increase over the previous value of 19 911 of 89 Branch 01 receives 58 of the S89 as it was 65 29 of the previous total so it receives 65 29 of 89 or 58 Admin Funds Manager Tota Quick Edit Morua Select a Quick Edit Option f Constant 0 i 0 Distribute Last Calculation Results DISTRIBUTE AS OFFSET This edit divides the value by the number of cells highlighted and portions that amount equall
11. Operating Income Income Statement for Actual months Percentage of Total Income Monthly Operating Income Income Statement e g July s Total Income for Balance of Year Monthly Tax Percentage of Total Income Annual Taxes Compute Summary Actual Tax accrual State Tax Calculation The same as the Federal calculation except accounts must be designated as State Exempt to exclude from Taxable Income If TEFRA Calculation is being used amount in Compute Audit report reflects TEFRA adjustment Tax exempt status on the account level can be viewed on the Chart of Accounts report with the Properties selection Include Tax Yes TEFRA Calculation FTE Income Non FTE Income TEFRA Disallowance Disallowance 1 Nominal Tax Rate Disallowance TEFRA Factor TEFRA Cost Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A TEFRA Cost Interest Expense EOM Balance of Tax Exempt Items EOM Assets EOM Undivided Profits EOM Current Earnings Dividends Apply any Loss Carry Forward or Tax Credits here Note If Capital Notes are issued and reside in the Capital section of the Balance Sheet the expense will not be tax deductible and should be added back into Operating Income for tax calculation purposes The components Cash Flow Accounts with Maturities Cash flows are determined by summing the scheduled maturity pre payment and interest payment for a given pe
12. Report type Actual vs Actua gt Date Range Lastmonth gt Plans To Include Data Type EOM Balance k an fns to an ns Reporting Period Month gt Date Range 2 Two months back gt Dec HEIE to Dec f2m3 Total Bank ka Header Cancel Save As Save Preview If your branch names are longer you may want to consider abbreviating them on the report In order to change the branch name double click in the blue area on the name and a cursor will appear to the right of the name Plans To Include Boneh Monde Backspace over the name to remove the undesired text and Save your changes Plans To Include You may also need to g Fed Ba l EE jh visit the Print Preview to see if the new names a fit on the page as desired 120 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 If you would like to change the order of the units in the report left click on the plan name and hold the mouse button down Drag the branch to the desired spot on your list when you see your cursor change to the highlighted ITEM enabling the drag and drop The Deposit and Loan Comparison reports can be set to compare balance sheet income or expense as well as yields and costs EDM Balance EOM Balance 4g Balance Expense Cost These reports can be used to compare one time period to another or to compare Actual vs Budget The Deposit and Loan Compariso
13. Yield 35 774 6 90 6 308 30 889 6 74 5 396 2006 Jan 6 885 1 967 8 83 548 5 87 37 014 7 06 6 176 Jun 7 579 394 8 35 175 7 27 47127 7 68 7 469 4725 26 565 6 71 4 673 4 195 67 569 Average 5 630 75 128 19 Jul 7 697 320 919 201 7 35 50 178 Fr 763 Apr 8 971 308 9 13 189 7 84 60 601 8 27 8 912 May s2 Oa TOBIN as 303i Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 PRICING MIODELS How to Establish Pricing Models By selecting the Manual button under the Offering Rate column the user has three model selections from which to establish an account s Pricing Model Manual Quick Model and New Model This button will change between Manual and Modeled depending on user selection Projections Budget l Maturity l Variance Fed Funds Notes Total Target New Offering Total Maturities Averac Balances Balance Rate Maturities rate Interest Yield Balang 2008 Manual User Edit Edit Manual Manual Mode Pricing Model Model Selection E This mode allows the user to directly enter rates for each month mie C New Model directly or through the use of Quick Edits Remember selecting the 2 75 jol Mar 10 965 591 7 66 Manual button on the pop up menu and clicking the OK button sets the Offering Rate method to Manual Mode Once in Manual Mode making changes to the Offering Rates is much like using a spreadsheet That is simply move th
14. 0 7099 547363 6959 428711 1282 1320 993164 8286 30957 8122 768555 0 OOO d 1002 EOM Balance Cash amp Due Cash and Due From Banks Fed Funds Sold Fed Funds Sold 3696 379395 Securities 56871 13281 U S Gov t 1998 US Treasuries 2058 77124 U S Agencies 36885 27734 4292 183594 4291 428711 5131 855469 US Agencies 33653 38281 Mortgage Backed Sec 1320 CMO s MBS 0 Municipal Sec 7099 547363 Municipals 6959 428711 Stock 1282 FHLB Stock 1320 993164 Other Securities 8286 30957 Corporate Bonds 8122 768555 Trading 0 Trading Securities 0 Gross Unrealized AFS G L 0 Unreal Gains Losses 0 Working with Spreadsheets Received From Others Spreadsheets that you receive from others including those provided to you by Plansmith may need to be edited to reflect the location of the Compass xla file on your computer You will know that editing is necessary if cells show up as HNAME This occurs because Excel could not automatically change the path of the Excel Add In for Compass from the author s computer to the current computer Before completing this process you will need to know the path that Excel is using for the Add In The easiest way to determine the location is to do a Search or Find on older versions of Explorer First close Excel Then right click the Start button on your windows taskbar Search your entire C drive for the Compass xla file If you find it more than once delete all copies except the one in
15. 1 614 815 1 21 19 153 547 466 175 000 1 19 1 616 161 1 22 18 328 1 149 085 175 000 1 13 l 175 000 1 14 Confirm Manual n 200 000 116 200 000 1 17 1 18 have chosen not to Distribute Evenly the Adjusted Provision values will be i be saved but the account will remain Manual Is that what you meant rl 14 a to do aie 0 1 17 0 1 17 0 1 17 0 1 17 0 1 17 fl 117 Scenario Testing Similar to Growth and Pricing Models multiple model scenarios can be created and saved to be applied at a later date and or used to create different financial scenarios to review Model Selection O Manual C New Model f Keep ALLL constant i Distribute Provision Evenly keep ALLL constant a ee sea Allowance Net Calculated Adjusted Pama toa 1 25 for Charge Provision Provision Loar Offs for Loss 00 s Loan Loans UUs Loss Feb 1 566 985 1 18 18 754 111 300 000 j blar 1 609 444 1 18 18 928 fee 400 000 U Apr 1 610 785 1 18 15 951 0 79 605 23 000 May 1 612 127 1 18 18 974 0 15 840 23 000 Jun 1 613 47 1 18 18 997 0 15 953 23 000 57 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 TAXES Tax Information Access the tax settings by selecting 2011 2012 State tares 4 00 4 00 Projections Tax Information from the ee geet Te uh drop down menu at the top of the Rate se Amourt screen You can either enter a nominal peels pan Clete Federal t
16. 13 148 382 0 1 19 Jun 1 613 471 20 18 500 000 0 1 16 Jul 1 614 815 21 13 547 466 0 1 19 Aug 1 616 161 22 20 1 149 085 0 1 26 Sep 1 617 508 23 20 149 320 0 1 27 Oct 1 618 856 23 20 143 555 0 1 28 Nov 1 620 205 24 2U 143 791 0 1 29 Dec 1 621 555 20 150 032 0 1 30 55 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Advanced Model Functionality Smoothing LLP Calculated Results You may wish to project the provision evenly over time rather than showing monthly fluctuations When the Distribute Provision Evenly button is checked calculated Provision for Loan Loss numbers are annualized rounded to the thousand and spread evenly over each month The Model will update regularly adjusting these numbers on a rounded basis as needed Allowance for Loan Loss Model Model Selection C Manual I New Model Cancel fe Test z V Distribute Provision Evenly Save Save As Target Allowance Net Calculated Adjusted Allowance for Charge Provision Provision Ok teat sxe ene Taa Loan Offs for Delete Loss 000 s Loan O00 s Loss 450 000 1 575 937 Feb 1 586 988 1 18 18 754 11 300 000 Mar 1 609 444 1 18 18 928 227 400 000 Apr 1 610 785 1 18 19 161 0 148 149 233 000 May 1 612 127 1 19 19 394 0 148 382 233 000 Jun 1 613 471 1 20 20 127 500 500 000 233 000 Jul 1 614 815 1 21 20 110 250 547 466 233 000 Aug 1 616 161 1 22 19 343 1
17. CNEF Investments Other Freed Income Trading Gross Unrealized AFS G L MTM US Agencies MTM Municipals MTM Equily Investments ercial T Morigage Floating Coment Fixed lt Less gt Commil Partic Coren Line of Credit Real Estate Commercial Residential Moto HELOC Motg 10yr Call Motg1 Orr Save Date EOM Balance 37 772 5 287 149 0 22 161 0 0 95 513 0 0 191 534 2 307 2 200 0 232 4 664 1 601 535 53 149 343 10 543 22 77 027 403 099 113 341 110 932 142 628 94 352 231 905 25 636 Average Balance 28 591 2 918 362 0 12 839 0 98 465 0 0 191 364 2 944 2 200 0 232 4 668 3 065 524 65 149 445 10 556 522 77 080 403 373 113 918 110 625 140 252 94 311 239 496 25 520 Income Expense 127 759 0 0 329 513 12 420 3 732 226 3 222 o 468 579 37 523 1 872 274 401 1539 167 430 611 406 519 516 002 Yield 0 00 0 00 0 02 0 00 014 0 00 0 00 1 56 0 00 0 00 Print Subfoldess Shows Expat To Excel Column Order fern SUPPLEMENTAL DATA EOM Average Balance Balance Current Earnings Curent Earnings 2 773 3 252 Off Balance Sheet Items a Interest Rate Swaps Loan Commitments Commitments gt 1 yea 0 0 Commitments lt 1 ear 0 0 Standby Letters of Credit Outstanding Letters of Credit 0 0 Interest Rate Caps Interest Rate Floors Memo Items Number of Employees Numbe
18. Compass Plans worksheet is correct If they are not Add Replace the plans listed Plansmith recommends that whenever the plan list is changed that you save and close the workbook then re open it to refresh all numbers and formulas Using User Defined Functions On occasion there will be instances where you will want to use the pre defined function fx keys that are stored on Excel Function codes are prewritten formulas that simplify the process of entering calculations and further streamline the process of using the Compass Menu Items When you installed the Excel Add In Compass created a new set of function codes that are listed under the User Defined category x wv fe wlaly a us lwlry tle le le le le le LR LR le ONDA WM iWin kK Oo re eT c D E G J Search for a function ono Cc YO en CICK Or select a category user Defined lt gt Select a function cmpCategoryCode cmpDataYalue cmpData alueY TDAvg cmpData alueYTDSum cmpGAPYalue cmpInsthame cmpAccountNumber CatOrAcctRef Plan_Number No help available Help on this Function OK Cancel Account Number function retrieves Compass alphanumeric account code specific to your bank One application of this function is to reverse engineer a report originally sent from Compass to Excel using the Print to Excel option e cmpAccountNumber Exact Account Name Bank Number Category Code is just
19. Difference US Agency MK 4 73 7 55 2 82 commer cial Float 6 41 5 80 0 61 Commer cial Adj 6 25 5 66 0 59 Residential Fix 6 00 6 14 0 14 Residential Float 5 37 5 49 0 12 Residential Adj 4 39 4 49 0 10 CD s 2 Mo gt 100 000 2 00 1 52 0 48 CD s 18 Mo gt 100 000 1 57 1 74 0 16 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 UPDATE FINANCIAL Data is normally imported into the model via DataBridge The monthly verification process involves reviewing your actual general ledger data for each month end The view will default to that last month of data imported into the model Simply select the appropriate month and year for earlier years and enter or correct individual accounts Note that interest income or interest expense items are entered in the third column of data Yields will be calculated automatically Non interest income and non interest expense accounts start after the balance sheet accounts Running totals help you check accuracy as you go Update for Mar 2014 X DOWN ono DATA Balance Sheet Assets Cash amp Due Cash Due From Banks Due From Banks 1 8 Due From Banks CDs Fed Funds Sold Fed Funds Sold Fed Funds Securities U S Gov t US geancies AFS Mortgage Backed Securities MBS CMOs Municipal Securities Muricpals Stock FHLB amp FRB Stock Equity Investments Other Securities Corporate LEAPS
20. Financial institution performance has always been better than predicted by historical interest rate risk measurement techniques There are several reasons for that but an important reason is that managers do not blindly react to movements in market interest rates Products types of accounts may be repriced in response to market changes but not in lock step with those changes Compass lets you demonstrate and develop your strategy for adjusting to market rate changes While Quick Pricing Models as described in the previous section allow you to show a simple or linear reaction like a fixed Spread to Prime or a Factor of treasury securities for municipal bonds New Pricing Models allow you to do much more Compass supports up to 26 different relationships between a driver and the price depending upon the level of the driver Three examples of typical models include the following No Change in Price those with Ceilings and Floors and the Step Model No Change in Price Check Credit Lines are always priced at 18 but are contractually variable Check Credit Rate Seg Driver Spread D 10 20 30 40 Driver Rate This pricing strategy requires only two entries to describe A a very low level of the driver 0 and the 18 price of the product and B a very high level of the driver 30 and the same 18 price Why choose 0 and 30 The choices of high and low limits are not important as long as they are extreme enough to cover any
21. OF mmm welds ul and mmmm yields July Cancel 132 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 HELP MENU Online User Manual Online Change Notes Plan Information Connectivity Add Features About USER MANUAL The Online User Manual is available online in a pdf format Downloaded the contents of its entirety or search for any specific information you may need ONLINE CHANGE NOTES Descriptions of the latest Compass enhancements are made available during the upgrade process and can be viewed anytime by selecting the Online Change Notes option where you can choose to open or save the notes to a designated location on your computer PLAN INFORMATION We have added this window to check certain settings in your model for diagnostic purposes Plan Information Institution name Test Bank Comment Date of last update December 2010 Date of last modification Tuesday March 01 2011 Date of last compute Tuesday March 01 2011 Compute needed jes Other File version 113 Created Tuesday March 01 2011 Horizon years 5 Plan pear 2010 Fiscal start January Negative balances adjustment False 133 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 CONNECTIVITY The Compass software will continually check for updates as well as validate its licensing each time it s used In order to perform those functions it will need
22. Annualized Interest 1 200 x 360 30 14 400 B Annualization of Monthly Other Income Other Expense and Taxes All Non Interest Income Non Interest Expense and Taxes are calculated on an account by account basis using an accrual method of 30 360 Example Monthly Salaries for March 126 856 Accrual Method 30 360 Annualized Salaries 126 856 x 360 30 1 522 272 C Year to Date Income or Expense for Ratio Calculation Year to Date Income or Expense is calculated on an account by account basis by summing the Monthly Annualized amounts then dividing by the Number of Months Example Annualized Interest for January 156 366 February 167 843 and March 176 613 Sum of months amounts 500 812 Number of months 3 Year to Date Interest 500 812 3 166 937 D Year to Date Calculation of Average Assets or Average Earning Assets The Year to Date average calculation for Earning Assets and Assets uses the Averages Balance Sheet Report data summing the Monthly Averages and then dividing by the Number of Months Likewise Balance Sheet balances are derived by summing data for all periods reported and then dividing by the number of periods When summing numbers together use only those for the periods chosen Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Example Average Assets for January 79 573 February 99 225 March 127 611 and April 128 818 Sum of mon
23. Changing scenarios Bi Step 3 Computing individual accounts iz Step 4 Analyzing the plan Summary data Click the down arrow to change to the Low or High rate scenario When you choose a particular rate scenario all reports reflect that scenario until your next Plan Compute The red squares are progress indicators They will automatically change color as Compute steps are completed Click the Compute button to start The order of operations in the Compute routine are as follows Compute Individual Accounts Balance the Balance Sheet to Fed Funds Compute Net Income and Income Taxes Add Subtract the Difference in Income from last Compute to Current Earnings Balance the Balance Sheet to Fed Funds or Cash PE W Ea The final balancing step is to Fed Funds provided that the Reinvest Net Income flag is checked Please refer to the Utilities section of manual under Chart of Accounts If this flag is left unchecked the final balancing plug will be to Cash instead Since large changes in income can lead to large unwarranted changes in Cash it would then be necessary to review and revise Cash projections from time to time All of the balancing accounts that are adjusted by the Compute cannot be modeled since any model would conflict with balance changes from the compute These accounts are Fed Funds Sold Fed Funds Purchased Undivided Profits Current Earnings and Cash amp Due For information on the Strategic Business Uni
24. File Update Rates Projections Compute Reporting Utilities Help Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 NAVIGATION TOOL BAR Compass provides for easy navigation A button bar with graphic symbols allows you to move through the various operational functions faster You can also use the menu bar located just above the button bar The menu bar offers access to some additional functions that are used less frequently than those on the buttons Home will take you back to the initial solash screen with the company name and plan file displayed Open Plan allows the user to browse for a plan It has the same function as the Open option in the File menu When you click this button and select a plan temporary files are created for the new plan Save Plan saves the temporary files into the permanent plan files on the disk It has the same function as the Save option in the File menu DataBridge is used to update your financial data The default is to the DataBridge download where you import each month s information Update Financial is where you can edit actual general ledger data Rate Forecast allows you to update download or modify interest rates driver rates for each of three rate scenarios plan high low You can also model one driver to another Account Projections takes you into the actual planning area to review and project each balance sheet and income statement item Compute the
25. Mar Apr May Jun EOM Interest Bearing Deposits 000 s 2007 2007 2007 2007 EOM Loans 000 s EOM Time Deposits 000 s Commercial EOM Current Earnings 000 s aadba Total Commercial TarBal 148 201 152 309 149561 149994 146441 150830 155 129 EOM Dividends 000 s aadbb Total Residential TarBal 19 920 19 911 20 234 20728 20 199 19844 20 252 any sauces ads ss aade Total Personal Loans TarBal 1 181 1 325 1116 1 113 547 685 572 ale si Goa erena acl aad Total Loans TaBal 236 303 236 723 230 899 233 025 234785 239 124 241 413 EOM Tier 2 Capital EOM Total Deposits amp Commercial Loans 62 72 64 34 64 77 64 37 62 37 63 08 64 26 EOM Other Liabilities y Ratios 101 Actual 22 37 24 64 24 63 23 49 23 14 24 13 23 67 Earning Asset Ratio EOM Risk Based Capital Ratio Equity Capital Ratio Capital Deposit Ratio Loan Deposit Ratio Loan Asset Ratio Loan Loss Reserve Ratio Demand Deposit Ratio Time Deposit Ratio Free Funds Ratio Return on Average Assets Ratio E EOM Earning Assets 00 s aa EOM Non Earning Assets 000 s D EOM Paying Liabilities 000 s TT Risk Weighted EOM Earning Assets 0 S E Return on Equity Capital Ratio Break Even Yield Net Overhead Int Inc Earning Assets FTE Ratio Int Exp Earming Assets Ratio Net Interest Margin FTE Ratio Int Exp Paying Liabilities Ratio Interest Spread FTE Ratio Efficiency Ratio FTE Capital T otal Deposits Ratio Non T axable Asset Ratio To place the value into the report hig
26. Rate Spread 7 00 7 00 7 00 7 01 21 00 21 00 f Manual o lebih Hie Cemre To set up the model first select the Driver the model should be linked New Model to in this case Prime Next select the Calc and Edit mode refer to the Seve Growth Modeling section for more detail on these options It is Driver Commercial Floating sea July Rate 900 2 Cale Spread ki Value jz Lag go Mon sometimes helpful to switch the Edit mode to Modeled Rate when setting up floors and ceilings In this example we set up the model to capture a portfolio floor of 7 and ceiling of 21 The final step is to link the floating rate account to the new Driver Rate created In most cases you will not enter a spread as it has already been built into the Driver model 32 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Adjustable Rate Loans with Floors and Ceilings Pricing Model Floor and Ceiling data will also be downloaded to this account type using Hodel Selection the same fields as the Floating Rate accounts You will also see this Manual information in the Maturity Tab and Account Wizard f Quick Model Lars C New Model Commi RE Adj Off save For adjustable rate accounts there is another step necessary to ensure HENI oe that the floors and ceilings will be held in the Rate Shock Analysis and any prive PRIME ees dynamic simulation Both the Offering Rate and Repri
27. g If you do not have a full year of historical data then the model will first project a total for the current year based upon the last actual month s number with zero growth For example if the last posted month is 10 000 then the total for the year will become 120 000 Subsequent years will grow based upon the growth percentage times the projected total for the current year New Month from previous Month Income Expense Model The final modeling selection is New Month from previous Model Selection Ok Month This option allows the user to change projected Manual income expense based upon historical information This Fee bodel model takes into account seasonal and cyclical effects To Annual Growth Rate create this type of model select New Month from New Month from previous Month previous Month from the Model Selection list and a grid 5 to 25 Growth Save As will be displayed as shown Enter the monthly growth rate for the current year as well as the future years scroll down to display After entering the monthly rates click on the Save As button and type in the name of your model where prompted Note that this model will appear on a master list of models accessible by clicking on the drop down arrow next to the model name 53 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DDA Service Charges Projections Budget Variance Hotes T a a a I Income Income Income Inc
28. reflected ONLY in the form of maturities To have the balances go down faster than the scheduled payments adjust the scheduled maturities in the Maturity Tab or add a prepayment model Account Editor Diagnostics Here the sum of the maturities does not equal the EOM balance The diagnostics message stating that the Scheduled Maturities do not match the last EOM Balance prompts the user to look at the Maturity Tab to review the maturity schedule and correct the error 19 Scheduled Maturities do not match the last EOM Balance Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Save Cancel If you check the Fix Small Maturity Imbalance in the DataBridge Settings D10 dropdown menu The default is to adjust for a difference of 2 or less for E lt kakaa The red flag generated from Repricing Bals exceed EOM or are less than EOM minus Sched Mats causes the most confusion because the error results from the analysis of three separate pieces of information The last EOM Balance is compared to the Scheduled Repricings as well as the Scheduled Maturities to make sure all pieces fit together accounts whose EOM balance exceeds 250M and 5 or less for accounts with balances less than or equal to 250M You can also define a custom Small Imbalance Threshold in Utilities DataBridge Settings Account Editor Diagnostics ricing Bals exceed EOM or are less than EOM minus Sched Mats P
29. 0 00 0 00 0 00 0 00 Jun 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 Jue 285 2 220 25 220 250 350 40 65 Aug 2 25 225 2 20 215 2 20 2 50 3 50 4 00 6 25 Sep 225 225 2 20 215 2 20 2 50 3 50 4 00 6 00 Oct 2 25 225 2 20 215 2 20 2 50 3 50 4 00 6 00 Nov 2 25 225 2 20 215 2 20 2 50 3 50 4 00 6 00 Dec 2 25 225 2 20 215 2 20 2 50 3 50 4 00 6 00 28 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Here we see the Offering Rate going to 25 BPS in October 2008 Projections Budget Yanance l Fed Funde Hotes l EQ Mer Offering Balance Balance Rate Expense 008 Quick Modeled Dec 20 458 5 396 0 49 20 15 2008 Jan 21 135 2 925 0 45 20 59 Feb 204a fool 0 43 20 17 Mar 20 296 ore 0 45 U1 Apt LEER faded 0 45 13 56 Jul 13 361 gg 0 48 19 42 4143 0 25 1956 Dec 19 760 ne 0 25 4 IFF 0 25 19 72 z009 Jan 19 850 ne 0 25 4 206 0 25 13 805 The lag function is not applied during the Rate Shock simulations Rate Shock is a change to the current rate environment not to past rates so lags are not applied Using the lag function may unnecessarily create more complication than needed It may be more straightforward to use Step models that incorporate Offering Rate changes that are different when rates go up versus when rates go down Pricing Model Hodel Select in P A eas 2 In order to create Promotional Pricing click on the Create A Promotion button on C Quick Model Cancel your New Offering Rate model Th
30. 0 00 3 21 US Agencies QM Spread w 15 yr CMT v ala 0 40 alil SBA Pools Manual wv lt None gt v 0 00 0 00 0 00 Private CMO s Manual w lt None gt v 0 00 0 00 0 00 Agency CMO s Manual v lt None gt v 0 00 0 00 0 00 MBS s QM Spread w 5 yr CMT v 3 55 0 60 4 15 MBS s Var QM Spread w 1 yr CMT v 3 33 1 50 4 83 Municipals QM Spread w State amp Local v 4 41 0 00 4 41 Taxable Municipals QM Spread w 5 yr CMT v aiT 0 00 ici Equity Securities 0 00 0 00 Other Debt Securities Rate Selections Other Bank CD s Commercial Loans Fix The Compass program can be customized to provide additional Carinercial Losre ar levels of operational efficiency This utility is used to reduce the c ial L ven number of available rates to a managable size Place check ommercial LOans var WH marks next to the rates that you want to use and remove the SBA Loans Unguaranteed check marks from the rates you do not need You can use this SBA Guaranteed Loans utility at any time to add or remove rates as your needs change Commercial RE Fixed Commercial RE Var v 2 yr CMT v 25 yr v 3 mo Thill 3 yr CMT PRIME Commercial RE Var wi Flo J E mo Thill J 5 yr CMT v 1 mo LIBOR Residential RE Fixed 7 1 yr CMT v 10 yr CMT v 3 mo LIBOR Residential RE Variable si Re OK Cancel Click on the Set Rate Availability button at the top left of the Rate Spread Utility Screen and you will see a list of Driver Rates Check the rates you would like to see disp
31. 1 1 Nominal Tax Rate if different than 34 Accounts with TEFRA Account Properties will have their Offering Rate adjusted according to the TEFRA adjustment setting present see Tax Calculations Avg Quarterly Totals and Subtotals Sum of Account New Balances for period Total Category New Balances for period Weighted Average of Offering Rates for period Avg Annual Totals and Subtotals Sum of Account New Balances for period Total Category New Balances for period Weighted Average of Offering Rates for period YIELDS AND COSTS REPORT Note Report selection FTE Yes will adjust Federally Tax Exempt accounts income by multiplying by 1 51515 for Federal Nominal Tax Rates of 34 or 1 1 Nominal Tax Rate if different than 34 Accounts with TEFRA Account Properties will have their income adjusted according to the TEFRA adjustment setting present see Tax Calculations Account Monthly Yield Cost Annualized Income or Expense Average Balance Avg Monthly Yield Cost on Subtotals and Totals Sum of Annualized Incomes or Expenses Sum of Account Average Balances Note Sum of Account Average Balances will include any accounts that had Income or Expense during the period on the report A 22 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Monthly Interest Spread Excludes Loan Fees Average Rate on Assets Average Rate on Liabilities Monthly Interest Margin Includes Loan Fee
32. 18 1 134 00 1 134 00 IDO0001 28 Feb 2018 15 033 33 14 033 33 7 29 0 00 1 000 00 1 000 00 1 000 00 IDO0016 30 Jul 2013 5 529 50 4 600 56 10 17 439 71 928 94 489 00 489 00 IDO0023 O2Jun2014 11 484 48 10 551 93 7 90 464 11 932 55 468 00 468 00 You have the ability to archive each month s instrument level detail including your changes both before and after using the Export to Excel button Data can be exported from either the account level or category level You can also always refer back to this information by accessing your monthly back up plan file In order to achieve maximum functionality every instrument must have a unique Instrument ID Please be mindful if you use different ID numbers for one instrument for example for loan participations Loan and deposit instruments are populated directly from your download files Manual adjustments made in the Maturity tab to correct Red Flags will not be reflected in the Instrument Tab The Instrument Tab will tie to the unadjusted maturity data downloaded from the extract files The Current Rate displayed on the History and Instrument tabs for each portfolio equals the weighted average yield on the portfolio as of the beginning of the month but may not agree exactly with the EOM Yield blue box yield on the Account Projections screen as the Current Rate will take prepayments into account Commercial Term Yar Go to Account Projections Historic Prepayment 2 180 Current Time Period Oct
33. 2 3 4 Shock amount during most recent Rate Shock 200 150 100 50 0 100 200 300 400 Non Interest Income Loan Fees 1 135 200 1 135 200 1 035 200 935 200 835 200 735 200 635 200 535 200 535 200 Non Interest Expense Loan Loss Provision 64 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 a STATIC SIMULATIONS VERSUS DYNAMIC SIMULATIONS Your Financial Compass Non Parallel Shock Module calculates risk based upon a static balance sheet assumption the same basis as the Parallel Shocks Rate paths are deterministic using scenarios created by a sophisticated Statistical analysis of historical yield curves Dynamic balance sheet risk can also be assessed using Financial Compass Please contact Support if you d like more information on dynamic simulations Basis Risk Yield Curve Risk and Option Risk are evaluated using likely and unlikely scenarios The likely scenarios will include forecast yield curves from the Blue Chip Financial Forecasts Unlikely scenarios will be derived using Plansmith s Yield Shock formulas which analyze over twenty years of yield curve history in order to determine the likelihood of a particular rate environment in comparison to the current yield curve The Unlikely Scenarios will include changes in interest rates of a significant magnitude e g up and down 300 and 400 basis points across different points of the yield curve For example a 400 BP rise in short term interest rates while
34. 2012 Export to Excel Calculated Adjusted Instruments 143 Prepayment 3 23 Prepayment 3 23 Expected Actual Instrument IE Maturity Date BOM Principal EOM Principal Pee Principal Principal sellelbles f Aejaz Payment Payment Prepayment Prepayrnert J827 72564 F440 257 25 6 08 436 547 95 oof Af2 30 317113 00 317 113 00 DOOOOUOOT O05 May 4013 19 239 23 19 038 32 6 00 156 14 156 91 1 00 IDQOO0002 05 0ct2016 240 850 00 240 530 00 6 00 0 00 0 00 0 00 0 00 47 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Model History Instruments i Calculated Adjusted Instruments 143 Prepayment 3 23 Prepayment 1 91 j Expected Actual T h e offe rin 8 ra te S fo reac h Instrument 12 Maturity Date BOM Principal EOM Principal a sg Principal Principal co a Saps t are being tracked as a Payment Payment accoun E pia ER IUES _ Ben Lane 9 827 729 64 9 440 257 25 6 08 498 547 93 387 472 38 317 113 00 188 116 32 proxy for current ma rket IDOO00001 f 05 May 2019 19 235 23 19 038 32 6 00 196 14 196 91 1 00 1 00 IDOoo0002 05 0ct 2016 240 830 00 240 830 00 6 00 0 00 0 00 0 00 0 00 rates These will be useful as a eS Commercial Term Var _Prepayments xIsx Microsc you analyze trends based on Insert Page Layout fare Data ein View Developer Add Ins spreads to current rates The i fferi is disol d Calibri Ju aa Si wrap Text Genera
35. 20234 20 728 20 199 19844 20252 19817 5 adc Total Personal Loans TarBal 1 181 1 325 1 116 1 113 547 665 572 565 MEENE Total Loans TarBal 936 303 236 723 230 899 233 025 234785 239 124 241 413 232 450 7 a E Commercial Loans 6272 6434 6477 6437 6237 6308 6426 6464 89 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 ACCESS TO STORED VALUES In addition to the account data the Report Designer also provides access to pre calculated ratios and data created with the Compute the Plan function You can access these values by scrolling down on the left menu to Summary Items Within the Summary Items you will see averages income and expense totals pre calculated ratios and custom ratios created using the Ratio Designer Report olete Default Data Types Time Selection Fonts Change kNew Report gt v Accounts EOM Balance v This Year v By Month v Body z Save Save As Summary Items Custom Ratios Actual M Include Totals Averages Arial 9 Accounts Summary Items al lt Design Area O Title lt PlanName gt Please be sure to save any report changes before attempting to print the report Subtitle 1 New Report Subtitle 2 Note fe indicates actual values Risk Weighted EOM Non Earning Asse Preview Report Fania kPa ti i i C O S EOM Loan Loss Reserve 000 s EOM Capital Notes 000 s q Description DataType E F Gees Ses doo EOM Demand Deposits 000 s
36. 36 240 351 40 186 142 44 167 048 Federal Tax 8 375 405 8 725 786 8 771 744 9 324 207 9 922 523 10 354 065 11 597 351 12 860 052 14 133 990 State Tax 1 342 120 1 398 267 1 405 631 1 494 161 1 590 038 1 659 191 1 858 422 2 060 764 2 264 906 Net Income 16 454 626 17 142 997 17 233 288 18 318 677 19 494 151 20 341 974 22 784 578 25 265 327 27 768 152 Earnings Change 3 039 526 2 351 154 2 260 864 1 175 475 0 847 823 3 290 427 5 771 175 8 274 000 Percentage Change 15 59 12 06 11 60 6 03 0 00 4 35 16 88 29 60 42 44 Return on Average Assets 0 75 0 78 0 78 0 83 0 89 0 93 1 04 1 15 1 26 Return on Average Equity 6 56 6 83 6 87 7 30 As of the end of February 2014 8 11 9 08 As in the standard Rate Shock Income report we are measuring the impact of rate change on earnings The Earnings Change is displayed as the change between the zero point No rate change and each respective rate shock increment To calculate Earnings Change the Net Income at the zero point is subtracted from the Net Income at each shock point In the example above the Net Income at the zero point is 19 494 151 and the Net Income at 100 bp is 17 233 288 thus giving an Earnings Change of S2 260 864 A 17 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Percentage Change is the Earnings change from each shock increment from the zero point in percentage terms Return on Average Assets is com
37. 774 770 69 914 580 71 079 400 75 734 580 82 796 010 89 835 300 96 830 160 Equity Securities 174 935 197 714 220 492 243 270 266 048 311 604 357 160 402 716 448 272 Total Interest Income 74 868 593 75 963 493 76 207 106 78 033 488 80 241 645 87 677 425 97 313 516 107 000 529 116 687 443 Loan Fees 1 135 200 1 135 200 1 035 200 935 200 835 200 735 200 635 200 535 200 535 200 Asset Income 76 003 793 77 098 693 77 242 306 78 968 688 81 076 845 88 412 625 97 948 716 107 535 729 117 222 643 Interest Expense Interest Bearing Deposits 927 770 927 770 927 770 927 770 1 131 241 6 754 855 11 752 070 16 724 300 21 761 310 Borrowed Funds 67 338 67 338 67 338 67 338 102 35 466 002 1 119 762 1 788 755 2 457 747 Total Interest Expense 995 110 995 110 995 110 995 110 1 233 598 7 220 860 12 871 831 18 513 053 24 219 062 Net Interest Income 75 008 684 76 103 584 76 247 197 77 973 579 79 843 247 81 191 765 85 076 885 89 022 676 93 003 582 Loan Loss Provision 525 000 525 000 525 000 525 000 525 000 525 000 525 000 525 000 525 000 Net Interest Income After Provision 74 483 684 75 578 584 75 722 197 77 448 579 79 318 247 80 666 765 84 551 885 88 497 676 92 478 582 Non interest Income 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 Non interest Expense 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 Operating Income 26 172 150 27 267 050 27 410 663 29 137 045 31 006 713 32 355 231
38. 833 333 is portioned according to the original percentage in each branch For Branch 01 the portion for January 2007 is an increase of 166 000 as 166 000 is 19 94 of 833 333 So the original amount in Branch 01 for January was 4 117 000 increased by 166 000 to equal 4 283 000 112 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 SBU CHANGING A PROJECTED INCOME STATEMENT ITEM FOR INDIVIDUAL BRANCHES 1 First open the Account Projections and select the individual account you wish to forecast Make sure that the branch modeling button is set to Manual Any branch column set to Modeled cannot be changed using the Dept View Tab Also you will not be able to create Models using the Dept View Tab 2 Highlight the months in the column for the branch that you wish to change 3 Right mouse click and select Quick Edit 4 Choose the Quick Edit function that you want to use refer to the Quick Edit instructions located in the Account Projections section of the manual 5 Click OK Changes will be made to each branch based on the Quick Edit feature you choose to use Projections Budget Varnance Dept View Notes Branch 01 Branch 02 Branch 03 Branch 04 Admin Funds Manager Manual Manual Manual Manual Manual Manual O Manual 13 000 2 009 2 500 13 000 2 d43 13 000 2 360 Select a Quick Edit Option Ok f Constant f Annual growth rate Esnez f Ramp to a value f Ramp from to a
39. Addin do Manual File name 3 Addin cin 4 nm r Files of type Add Ins xlam xla xl v File name ompasszia Add ins adam xda 7 dl pees Windows XP Windows Vista View View c Inthe Add Ins folder check Plansmith s Compass and select OK Add Ins lS Add Ins available Analysis ToolPak Analysis ToolPak VBA F Conditional Sum Wizard Euro Currency Tools Fis Internet Assistant VBA Lookup Wizard oe F Solver Add in 6 Select the Add Ins option on the menu bar and the Compass menu option will appear r V USU LALI Ca Home Insert Page Layout Formulas Data Review View Developer Addas ni Compass Menu Commands C To load the Add in for Vista Users with high security settings 1 Click then Microsoft Office Button 2 Click Excel Options ER Proofing Save Advanced Customize C 3 Add Ins Trust Center Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C 3 Click Trust Center 4 Click Trust Center Setting Microsoft Office Excel Trust Center The Trust Center contains security and privacy settings These settings help keep your computer secure We recommend that you do not change these settings Trust Center Settings 5 Click Trusted Locations option Trust Center Trusted Publishers Add ins a Click Add new location ActiveX Settings Macro Settings Message Bar External Content Privacy Optio
40. Admin Funds Manager Total Select a Quick Edit Option Th Jul 13 000 2 409 2 500 2 000 19 809 Constant c Aug 13 000 2 326 2 500 2 000 19 826 C Annual growth rate Sep 13 000 2343 2 500 2 000 13 84 Ramp to a value saa Oct 13 000 2 360 2500 2 000 15 86 ue from to a value Nov 13 000 2377 2 500 2 000 19 877 Po S Dec 13 000 2 354 2500 2 000 19 8594 Debut teplice aeetiad 2007 Jan 13 653 2 532 2626 2 100 20 911 Distribute as offset Feb 14 305 EATE 2 r5 2 201 21 929 Mar 14 955 2014 2 076 2 301 2 946 Aggregating Offset 1000 Apr 15 605 2 957 3 001 2 401 May 16 253 3 101 3 126 2 501 ze Jun 16 901 4 246 3 250 2 600 25 997 Last Calculation Results Jul 17 547 3393 3374 2 700 Tr Total Aug 16 192 3 542 3 455 249 2503 Average Sep 18 5836 3 693 3 622 2 098 29 04 Trend Oct 19 479 4 645 37 46 2 997 30 066 Nov 20 120 3 995 3 5069 3 095 Dec 20 76 4 152 3 993 3 194 Toya ooo oo ooo oye E an G E a G E an cc 0 The Aggregating Offset of 1 000 has added a total of 1 000 to January 2007 and 2 000 to February 2007 and so on The proportional distribution allotted 653 to Branch 01 in January 2007 65 29 of 1 000 and 1 305 to February 65 29 of 2 000 000 according to the branch percentage of the total column prior to the edit 117 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DISTRIBUTE REPLACE EXISTING This edit will take the total amount entered and divide it equally among the highlighted cells
41. For example the December 2012 balance in Branch 01 has changed from 4 511 000 to 4 607 000 This is an increase of 96 000 The original Branch 01 figure of 4 511 000 was 20 36 of the original December total of 22 147 000 so the increase for that month is 20 36 of 471 000 or 96 000 109 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RAMP TOA VALUE This method is used to reach a target balance by a specific date The Total column in this case has been ramped to a value of 22 618 000 The same increase as the annual growth example The branch columns will receive a proportionate amount of the total increase in each month based upon the balances that were present before the edit Example of Ramp to a Value After Edit Funds Quick Edit Branch O1 Branch 2 Branch 03 Branch U4 Admin Manager Total De Constant c 4 083 380 7 401 8 687 20 551 O Annual growth rate a A ae _ beret ia 4117 389 7425 a712 30 645 C Ramp from to a value Feb 4147 399 7545 3 725 20 817 C Offset Smera Mar Alii 406 f BBS ofA 20 991 D OopPo o f Distribute replace existing Apr 4 26 420 foe 66949 21 1 EG D SADE EEEE 21 342 E EE Jun 4306 442 8 105 5 666 21 520 Jul 4 355 454 8 266 8 623 EEE Aug 4 457 473 0 920 ggz Last Calculation Results Sep 4 491 Add 6 665 a Azz ees Oct 4 526 496 o a03 ggz Trend Now 4 560 AUS o 442 o4z Dec 4 607 nee 4 105 a4 co G a G G a G G a G G a G G a G G a RAMP FROM TO A
42. For the second test the amount of Scheduled Repricings must not be lower than the last EOM balance less the Scheduled Maturities for the First Time to repricing Remember that a loan that has a principal balance of 1 000 today may not have the Custom ABC factor Cost factor Monthly Tasable Y 30 360 Payment frequency Tax status Accrual method Average term for new transactions months 240 Amortization method same principal balance in the future when it comes time for repricing To check this data you will first need to check the initial repricing period This can be First Time to repricing months ae viewed in the Account Wizard or by selecting Edit Hext Time to Repricing months 12 Properties Absolute floor 2 65 Ceiling 2 Mey TR 6 8 Relative floor 5 Ceiling 5 Range Calculation Results Periodic cap 20 l E Balloon due months D i Trend 4 6 35 l l l ee 6 35 In this Residential RE Adj account example the first time to reprice is set to 36 6 55 months The minimum amount of repricings needs to be the last EOM balance of 10 406 minus the amount of maturities over the First Time to repricing E period 36 months of 1 675 Use the Calc Total Avg amp Trend again Thus a 5 36 the minimum amount of repricings should be 10 406 1 675 8 731 Scheduled Maturities Next 36 Months Running the Calc Total Avg amp Trend to add up the Scheduled Repricings s
43. JAE f Offset alue IS projection starts wit 4 350 Aggregating Offset the January EOM balance of 5489 C Distribute replace existing 8 630 Distribute as offset 7 426 000 and ramps the balance Te AT mark sheet up to 12 000 000 among all Dec 4 511 5 H Ramp to 12000 ki 2013 Jan 4 548 52 9 06 a Feb A586 l Mar 4625 55 g 2 Last Calculation Results Apr 4 663 BE Ma 4702 57 ee Total Jun 474 592 sz Average Jul 4 70 an Trend ANY CHANGES MADE USING THE DEPT VIEW TAB WILL BECOME PERMANENT Changes made with the Dept View Tab are permanently saved to each branch database The only way to return a plan to its state prior to any adjustments is to retrieve a backup copy of that database Please make sure that any changes you make using this feature can be permanent or easily changed back to what you desire SBU CHANGING A PROJECTED BALANCE SHEET FOR MULTIPLE BRANCHES Perhaps the greatest time savings will be realized in using the Dept View Tab to edit multiple branches at the same time 1 First open the Account Projections and select the individual account you wish to forecast All branch modeling buttons must be set to Manual Any branch column set to Quick or Modeled cannot be changed using the Dept View Tab Also you will not be able to create Growth Models using the Dept View Tab 2 To remove the models from all branches click on the Modeled button over the Total column You ll get a prompt to set all Depart
44. June amp July while the rest of the year will remain at a 5 growth rate Please remember that not all accounts will easily lend themselves to modeling Perhaps the Quick Edit option may be the best way to project income and expense 54 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Loan Loss Reserve and Loan Loss Provision Modeling The Loan Loss Reserve LLR and Loan Loss Provision LLP accounts in Compass can be linked together via the Modeling function so that changes in one account will be automatically updated in the other account This Modeling functionality allows users to build models that incorporate loan growth changes include expected net charge off projections and or project required Provisions based on Allowance as a of Loans targets Those calculated results will be incorporated in both the LLR and the LLP accounts and automatically updated as forecasted loan balances change over time To enter the Model screen click on the Manual or Modeled button at the top of the EOM Balance Column from the LLR account or the Expense column from the LLP account The model can be Projections Budget Variance FedFunds ni accessed from either account When set to the Modeled mode Jon changes made from the LLR account will be reflected on the LLP a ane account and vice versa This modeling feature is available for the first account within the Loan Loss Reserve and Loan Loss
45. Loading the Add In into Excel After saving the Add In to your computer you must load it into Excel The loading instructions that follow in Step A for Excel 2000 2006 users and Step B for Excel 2007 users assume that the Add In is saved in C Program Files Compass If your pc security level Vista does not recognize the Excel Add In you may need to perform Step C After the Add In has been loaded and before using it for the first time please exit Excel and save to complete the loading function A To load the Add In to Excel 2000 2006 1 Choose Tools then Add Ins File Edit view Insert Format Tools Data window Compass Help Adobe PDF Dae eS SRY kv meling F7 r AZ Add Ins Customize aor Options baat hy C 1 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C 2 Select Browse then point to the Compass xla file Click OK Excel will install the Plansmith s Compass Add In and include it in the list in the Add Ins menu Look in E Compass v8 d fe Be Tools 64 Compass 8 Web Help Copy of Financial amp Budget Compass Manual Add Ins available Analysis ToolPak T Analysis ToolPak VBA OK Autosave Add in fal Conditional Sum Wizard Euro Currency Tools T Internet Assistant VBA pows 7 Lookup Wizard T MS Query Add in 7 ODBC Add in Favorites File name tee OK Files of type Add Ins
46. MBS Fixed eH MBS ADJ f Quick Model t 36 Mo CO Prepayments Ey Municipal Sec sis Municipals Enter a monthly prepayment rate hau Municipals Taxable BE EEH Other Investments ee eee Bee Corporate Bonds W Use Historic Prepayment 4 co m ot m 42 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Model Tab Mo Model B Detailed Model Compass supports three types of prepayment models aa a ae E Quick Model B Automated Quick Model A Quick Model specifies a monthly percentage of prepayment This percentage will be calculated regardless of the current market rates and the contractual rates on the existing portfolio Perhaps the most common use for the Quick Model is for consumer loans especially auto loans Historic analysis shows that these loans generally prepay faster than contractual payments These prepayments may not be driven by customers desire for refinancing at a better rate They may result from customers tendencies to want to reduce their debt as well as from disposing of the collateral prior to final maturity Please note that if you enter 8 or more the entire portfolio will prepay within one year You will notice that the color associated with the account in the chart changes to yellow when you apply this model An Automated Quick Model will mechanically apply a Quick Model based on the prepayment percentage calculated from your bank s own historical experience Within the ex
47. Non Parallel 65 Rate Spread Utility 15 Rate Update 14 Ratio Designer 92 Red Flags 12 19 Report Designer 85 Reporting 80 Font Changes 81 Headers and Footers 81 Page Breaks 81 Print Options 82 Scripts 83 Smart Print 82 Save Plan 5 Strategic Business Unit SBU 102 Adding Accounts 105 Branch Department Maintenance 119 Capital Allocation 103 Consolidating 106 Expense Allocation 101 Forecasting Using The Departmental View Tab 106 Funds Manager 105 Funds Pools 104 How the SBU Consolidation Works 103 Navigating 102 Taxes 105 T Taxes 58 Temporary Files 4 Trend data 25 U User Edit 22 Utilities Menu 122 Y Year End Shift 123 Z Zero Out Plan 124
48. Plan mdb file just the record C Program Files Compass Test Version 84T est Plans Utilities Setting T otalB ar of it in the program Change the Maximum files allowed option if you wish to access more than four plans and have them all show up in the Select a Plan File box Maximum files allowed 10 Delete 131 Cancel Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Fonts Preferences Fonts x General Chart of Accounts Dividends Reports Models Last Files List Forts Date Formats Font options can be changed to affect all reports in the fn ae or ie x __Shange Font Reporting section Select the item you wish to change from t t 3 A AEE the Font settings for drop down list and choose the font type by clicking on Change Font This is how the text will appear Date Formats Preferences Date Formats Xx General Chart of Accounts Dividends Reports Date Format selections are available through the Date Hodei eae bons Date Formats Format Type drop down list This will change the display Select Date Format Type Using this format string on your reports if you choose to add the date in the Usem Eefl Shot Date ay ooo Header or Footer Gives this date 1424 08 Custom date formats are constructed by stinging together a series of letters that represent the various Units of time For example for the month of July a single m welds Fran welds
49. Provision folders If set back to the Manual mode these accounts will not be linked and numbers currently in the model will be kept static Allowance for Loan Losses Projections Allowance for Loan Loss Model Model Selection f Manual C New Model Apr 18 928 ain aan Basic Model Functionality Within the model users can review historical numbers which are highlighted in darker grey Columns highlighted in white are editable by the User You can set targets for Allowance levels as a Percentage of Loans and input expected Net Charge off levels Based on that input a Calculated Provision for Loan Loss will be populated on this screen and the Allowance for Loan Loss column will be updated By saving this model and exiting this screen both the LLR and LLP accounts within Compass will be populated with the data outlined below As you update Loan balances in future months the model will recalculate the LLR and LLP and update those accounts accordingly Allowance for Loan Loss Model Model Selection C Manual C New Model Cancel fey Lestl zl T Distribute Provision Evenly Save Allowance Calculated Adjusted Resulting Save As for Provision Provision Loan Loan for Loss T otal Delete Loss Loan Loans 000 s Loss 1 575 937 18 15 450 000 ARR RE 2014 Feb 1 586 988 18 18 300 000 Mar 1 603 444 18 18 400 000 Apr 1 610 785 18 13 148 143 0 1 18 May 1 612 12 19
50. Quick Model Cancel f New Model lsy CMT 2 5 FLr H ave T 42 53 FLr None Save As a Chart fox Driver January Rate a455 2 Delete A Time Las Months char 5 Yr CMT 2 5 FLr None Curent Price 700 4 10 8 6 4 2 0 0 1 2 3 4 5 6 Driver Rate D e 5 3 Add Delete Clear Normally the relationship between the Driver and the Offering Rate is expressed as a Spread adding or subtracting an amount from the Driver to get the Rate Another option is to use a Factor A factor multiplies the driver by an amount rather than adding or subtracting This produces a speed or rate of change between a driver and a rate For example if your savings rate typically goes up about for every 1 change in Prime you could model this as a 25 factor of Prime Factors are input as decimals so you would enter 25 as 25 To model by factor change the Calc mode from Spread to Factor You can also choose to solve for the spread rather than the rate by changing the Edit mode from Spread to Modeled Rate You can then construct a model by asking If Prime were __ what would we charge for this loan or pay on this deposit 27 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The Time Lag Function in Compass is designed to allow the user to administer rates in their rate forecast This is accomplished by setting the lag option in the Offering Rate models The lag period is a monthly
51. Scheduled Maturities Exit Rate Scheduled Prepayments Scheduled Prepayments Exit Rate Scheduled Repricings Scheduled Repricings Exit Rate Total Maturities d 1053 d 1052 d 1013 d 1011 d 1036 d 1003 d 1028 s 3023 s 3022 s 3001 s 3005 s 3098 s 3095 s 3011 s 3021 s 3096 s 3003 s 3094 s 3013 s 3015 s 3081 s 3097 s 3079 s 3078 s 3099 s 3084 s 3065 s 3060 s 3092 s 3057 s 3070 s 3002 s 3006 s 3061 s 3074 s 3063 s 3076 s 3012 s 3064 s 3080 s 3004 s 3059 s 3066 s 3014 s 3016 s 3071 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 EOM Cost EOM Yield Expense Income Memo Items Current Year amp Proj New Balance New Maturities Compute Summary Data Annualized Expense S s Annualized Income S s Average Assets 000 s Average Capital 000 s Average Capital Notes 000 s Average Demand Deposits 000 s Average Earning Assets 000 s Average Equity Capital 000 s Average Interest Bearing Deposits 000 s Average Liabilities 000 s Average Loans 000 s Average Non Earning Assets 000 s Average Paying Liabilities O00 s Average Required Capital 000 s Average Time Deposits 000 s Avg Investment Loss Reserve 000 s Avg Loan Loss Reserve 000 s Bond Gains S s Break Even Yield Capital Deposit Ratio Capital Risk Weighted Assets Ratio Capital Total Deposits Ratio Cash Adjustment 000 s Demand Deposit Ratio EOM Assets 000 s EOM Capital 000 s
52. Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 Repeat this process for each account with a Red Flag After clearing Red Flags on the branch department close the plan and you will return to the consolidation screen Open the next plan on the screen and clear its red flags After clearing all red flags exiting and saving each plan you will return to the Total Bank plan Update the interest rate forecast s E A Click the Rate Forecast button AutoUpdate B Click Auto Update C Follow the prompts to update your Rate Forecast D Upon completion you will see Rates are Current in the upper left hand corner Compute All Departments P A Click the Compute button F3 Compute All Plans 5 B Click the Compute a Parallel Rate Shock button wil Make sure that you choose the appropriate shock time horizon and shock increments and whether you want a ramped rate shock The shock time horizon and shock increments that my bank has chosen are C Click the Compute a Non Parallel Rate Shock button 2 Click Yes to update default yield scenarios and projection formulas Make sure that you choose the same shock time horizon as your Parallel Rate Shock Compute The shock time horizon my bank has chosen are At this point you are ready to print history variance gap and rate shock reports A Click the Reports button B Double click on the report you wish to view C Ifyou need to change any report properti
53. Spread is the difference between the contract rate to the customer and the current rate that you are offering on that product to new customers The assumption is that your current rate is always competitive and is therefore a market rate Since the spread between current offering rates and maturity rates influences prepayments Compass applies the following calculations Assets Maturity Exit Rate less Offering Rate Spread Liabilities Offering Rate less Maturity Exit Rate Spread Therefore a positive spread on an asset or liability reflects a favorable condition for the customer and Compass calculates a prepayment A negative spread is less favorable to the customer and Compass calculates little or no prepayment It is important to think of a broad range of spreads so that your model will be set to react to any possible change in projected vs contract rates Plansmith recommends that your model cover spreads as wide as 10 to 10 Here s an example of how a New Detailed Model appears You will notice that the color associated with the account in the Chart changes to purple Prepayment Seg Spread Percent A 10 00 0 75 B 4 00 0 75 C 3 00 0 83 D 2 00 0 92 E 1 00 1 17 F 0 00 1 50 G 1 00 2 r5 H o m S 2 yr balloon l 3 00 6 00 J 4 00 6 33 K 10 00 6 33 Frepayment Fercentade 44 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Regulators expect that a bank understand and utilize their ba
54. The middle section is a close up view of the scenario selected at left as 4 gt Flattened EL well as other options Make sure the date displayed is the proper rate Elos oened shock date The right hand section shows the numeric values for each JEn index and lists the Treasury Yield Curve and other Driver Rates present lt B gt Steepened in the Financial Compass Rate Forecast screen e Each Scenario represents a change in the Treasury Yield curve from the current position As U S Treasury rates change over time the default scenarios will adjust accordingly and will automatically update in the model We suggest you use the default scenarios downloaded each month as they will include likely and unlikely scenarios based upon the current level of interest rates Likely scenarios appear in Blue and unlikely scenarios appear in Red Move Down 67 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 In order to test a scenario for its likelihood Plansmith s Yield Shock formulas evaluate the likelihood that the current Treasury Yield curve will change from its current position to the scenario position ge we Or F F SF SO The likelihood of any scenario is derived using three tests as follows 1 If any Yield Curve rate is at or beyond either 0 or 100 it is flagged as unlikely 2 Ifa single rate is clearly outside of the norm of the other rates it is flagged as unlikely see Figure 11 This test b
55. Total Assets 100 Only Earning Assets considered for Tax Exempt Assets Demand Deposits Total Deposits Ratio Average Demand Deposits Average Total Deposits 100 Time Deposits Total Deposits Average Time Deposits Average Total Deposits 100 Free Funds Ratio Average Earning Assets Average Paying Liabilities Average Earning Assets 100 Liquidity Ratio EOM Cash amp Due EOM Fed Funds Sold EOM Total Securities EOM Pledged Securities EOM Total Liabilities EOM Other Liabilities EOM Pledged Securities 100 Tier 1 Leverage Ratio Total Tier 1 Capital Total Assets for the Leverage Ratio 100 Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Tier 1 Capital Ratio Total Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Total Capital Ratio Total Tier 1 Capital Tier 2 Capital Total Risk Weighted Assets Disallowed Reserve 100 Capital Conservation Buffer Applied to periods starting January 2016 Lowest of three calculations Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Plus Capital Conservation Buffer Tier 1 Capital Ratio Minimum Tier 1 Capital Plus Capital Conservation Buffer Total Capital Ratio Minimum Total Capital Plus Conservation Buffer Rate Shock Income illustrates the impact of rate changes on your Net Interest Income
56. Total Risk Weighted Assets Disallowed Reserve Tier 1 Leverage Ratio Total Tier 1 Capital Total Assets for the Leverage Ratio 100 Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Tier 1 Capital Ratio Total Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Total Capital Ratio Total Tier 1 Capital Tier 2 Capital Total Risk Weighted Assets Disallowed Reserve 100 Capital Conservation Buffer Applied to periods starting January 2016 Lowest of three calculations Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Plus Capital Conservation Buffer Tier 1 Capital Ratio Minimum Tier 1 Capital Plus Capital Conservation Buffer Total Capital Ratio Minimum Total Capital Plus Conservation Buffer CET1 less CET1 Minimum plus Buffer Applied to periods starting January 2016 Common Equity Tier 1 Capital Ratio Common Equity Tier 1 plus Capital Conservation Buffer per table Tier 1 less Tier 1 Minimum plus Buffer Applied to periods starting January 2016 Tier 1 Capital Ratio Minimum Tier 1 Capital plus Capital Conservation Buffer per table Total Capital Ratio Applied to periods starting January 2016 Total Capital Ratio Minimum Total Capital plus Conservation Buffer per table A 10 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 A
57. VALUE This edit works the same as the Annual Growth edit The monthly increase is portioned according to each Branch s percentage of the total balance before the edit A starting point and ending target are entered and the values in between are interpolated Example of Ramp from to a Value After Edit Quick Edit Funds Branch 0T Branch 2 Branch03 Branch U4 Admin Manager Total aa ene Eat Dprion Ok 2011 Manual Manual Manual Manual Manual Manual Manual Oonetar Dec 4 083 380 7401 a687 20 551 f Annual growth rate Cancel 0O 20an C Ramp to a value 22 Jan 4188 356 7 554 6 5672 0 21 000 f Ramp from to a value Offset Feb 4 256 409 EE 0 956 21 364 C Aggregating Offset Mar 43295 422 7934 q O47 7 TOF pice cee ene en 22 0 C Distribute as offset Apr 4410 436 5 163 4 079 22 091 oa o Po o o May 4 476 452 Oddo J167 22 459 Ramp from 21000 Jun 4 566 469 0o94 3 159 D To 25000 Jul 4 653 465 Act 93 212 1 Aug 4 796 FOS 3 1785 3 064 ast Calculation Results a Sep 4 067 525 3 391 de Average i Oct 4 938 H4 3 605 4 1 od Trend Mov 5 006 o5 4 021 3 250 Dec 5 092 577 10 064 J267 D o 25 000 The after edit value of 21 000 000 is 355 000 greater than the before edit value in January of 20 645 000 Branch 01 increased by 71 000 in January as it was 19 94 of the total January balance of 20 645 000 and 19 94 of 355 000 is 71 000 Additionally December s value in Branch 01 before th
58. as before with each branch receiving its percentage according to its share of the total volume before the edit For example Branch 01 had a previous January 2012 balance of 4 117 000 19 94 of the previous total of 20 645 000 and has received 19 94 of the additional 1 000 000 to bring its new total to 4 317 000 co co AGGREGATING OFFSET The Aggregating Offset option is similar to the offset edit except that the addition or subtraction increases by the same amount each month of the projection In this example the first month has 1 000 000 added the second 2 000 000 and so on Example of Aggregating Offset After Edit Funds Quick Edit Branch O10 Branch 02 Branch 03 Branch 04 Admin Manager T otal f Constant a iene oe 4 083 380 7401 8 Ba 0 20 551 C Ramp ta a value EE 202 Jan 4317 408 7 786 9 134 21 645 437 D sc o Feb 450 Aa Bare OSS O O a Feb 4 550 8 278 9 575 22 840 Aggregating Difset Mar 4 roa JEF of fo 10 0035 24 038 C Distribute replace existing Apr F O20 498 9291 10334 25145 ican 26 344 Aggregating Offset 100d 27 448 28 560 Aug 5 993 635 11469 1122 29 423 Last Calculation Results a Sep B232 Br 12 024 11 6856 30 614 o Det 6 471 709 12 587 12 041 37 808 mm p Eam G Eam G E am G E a G Eam G E an D Trend Hor B TAr 1 31 and 1 2 392 Dec 6 955 foe Taf 4 12 658 The Aggregating Offset of 1 000 000 has added a total of 1 000 000 to January 2007 and 2 000 000 to
59. been called you can remove them from the callable tab by right clicking on the item and selecting Delete Bond 51 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 INCOME EXPENSE ACCOUNTS The projected data for income expense is formatted differently from the balance sheet The projected income expense is displayed for all years to the right of the current year There are several options for editing data in this screen The first is the Manual mode This mode operates similarly to the Manual mode in the balance sheet Projections Tab Just type in your numbers or use any of the Quick Edit options refer to the Quick Edit Options located in the Account Projections section of the manual Service Chrg Demand Projections Budget Variance Hotes 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Income Income Income Income Income come Income Income Income Income 2008 Manual Manual Manual Manual Manual Mar B04 J20 4 910 14 026 21 949 35 250 44 250 63 500 62 500 62 50 Apr 1 985 3 632 6 460 11 210 25 659 36 000 45 000 64 250 63 250 63 25 Nov 2 019 5174 Shela 23 459 34 852 41 250 K0 250 53 500 65 500 65 500 Dec Iila 6 301 11 861 25 206 4 329 4 000 A O00 60 250 69 250 69 250 Total 26 035 47946 91338 195 581 350 69 462 080 562 500 673 500 701 500 Fed SOO Income Expense Model Income Expense Model Model Selection C Manual Fee Model Cancel f Annual Growth Aate f New Mon
60. branch or department OR from the Total Bank Dept View tabs refer to item SBU Forecasting using the Departmental View Tab under the Consolidation The SBU Planning Model section of the manual B Make revisions by clicking Account Projections button C Select major accounts and adjust projected growth if necessary D The Offering Rates Report should be reviewed to verify that prices for next month are close to the bank s current rates for new loans and deposits B2 6 E Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 Revisions are made by selecting Account Projections button Click on the account Click on the model button in the Offering Rate column and make your adjustments Projections Budget Maturity Repricing VYVanance Fed Funds Total EOP Her Offering Total Maturities Balance Balance Hate Maturities rae Interest amaf Quick gt Modeled Feb fff Ud EOM rield 2b 180 Mar er 2r 2r 4 401 Apr r220 1 155 4 50 J67 4 57 290 779 If the box says Manual you will need to enter the rate in each month of your projections Better yet give us a call and we ll review Offer Rate modeling with you F G Exit and Save your changes to the individual plan and open the next plan your wish to edit When all changes are complete Compute All Departments from Total Bank Plan Re Compute Rate Shock as well After revisions reports showing projected results and the revise
61. c bbga Demand Deposits c bbgb Interest Bearing Deposits c bbh NOW Accounts c bbi Money Market Accounts c bbj Savings c bbk Time Deposits c bbl CD s gt 100K C C CD s lt 100K c Ca Other Int Bearing Deposits c cb Fed Funds Purchased C CC Borrowed Funds c cd Data Item Codes Adjusted New Maturities d 1030 Adjusted New Repricings d 1037 Adjusted Scheduled Maturities d 1038 Adjusted Scheduled Maturities Exit Rate d 1043 Adjusted Scheduled Repricings d 1045 Avg Balance d 1004 Budget Average Balance d 1049 Budget Cost d 1031 Budget EOM Balance and Memo Items d 1033 Budget Expense d 1039 Budget Income d 1040 Budget Yield d 1046 Cost d 1048 EOM Balance and Memo history d 1034 C 14 Trust Income Service Charges Fee Income Loan Fees Other Fee Income Extraordinary Income Realized Bond Gains Other Extraordinary Income Insurance Income Other Income Non Interest Expense Employee Occupancy Data Processing Marketing Loan Loss Provision Investment Loss Provision Extraordinary Expense Realized Bond Losses Other Extraordinary Expense Furniture Equipment Auto Supplies amp Printing Legal amp Professional Outside Services Other Expense Off Balance Sheet Items Interest Rate Swaps Loan Commitments Standby Letters of Credit Interest Rate Caps New Maturities Exit Rate New Prepayments New Prepayments Exit Rate New Repricings New Repricings Exit Rate Offering Rate Repricing Rate Scheduled Maturities
62. compared In this case the income statement contains the components to be used in the chart First select the items to be charted by Right clicking on the line items Select Insert Page Break Mark Unmark row for charting and the item selected will appear highlighted in yellow To remove the highlighting right click and select Clear Marked Remove All Page Breaks Rows Mark Unrmark row For charting Build the chart Clear marked rows Return on Average Equity Continue right clicking and marking each item you wish to include in the analysis Once all items have been selected right click again and select Build the chart A Quick Chart will appear Quick Charts can be printed by clicking on the right arrow next to the printer button and selecting Printer or they can be exported for use in other applications by selecting either File or Clipboard If you select File you have the option of saving the image as a Bitmap Metafile or JPEG image Sample Bank vf Petiri on Ave rage 6 00 Asset 400 g lithotarnlig Asset a FTE ff let EqvEari lig Asset 0 00 Jar Maran Mao JIS ep TN Feb S007 Apra JuAn Ags Octan Dec A In the example above it is clear that interest expense is rising much faster than interest income thus causing the projected decline in ROA and made easier to interpret using the charting capabilities within Compass When comparing ratios the charts will appear as line charts and when comparing dollars amounts or
63. contain rate shifts of sufficient magnitude and across different tenors After selecting Yes to updating default yield scenarios you will enter the Non Parallel Rate Shock Module screen This screen is comprised of three main sections 66 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Preview lt Gincal fin RateName _ Current Spread Result Automate lt Scenario i lt 1 gt Blue Chip Plan lt 2 gt Blue Chip High 3 lt 3 gt Blue Chip Low yr CMT yr CMT D yr CMT lt 4 gt Flattened 30 pr CMT mo LIBOR mo LIBOR 0 day CP 0 day BA 7 lt 7 gt High Flat i 0 day CD i i A 0 yr Fixed eee e tate amp Local EVE wee a UtiityA 000 ooo 000 WthDistictCOFl 1 71 E 2 26 lt 5 gt Inverted mo LIBOR lt 6 gt Steepened a ea 0 Tails Go co on Ery EEEN 1 00_ 0 29 0 66 _ ECH 0 56 _ 0 00 masi peal Ea gt o m E oo T a oo Twist Name Blue Chip Plan Deactivate Current Month is Sep 2010 Shock Current Balance Sheet and Rates fi Year SS EE At left is the Scenario List These are the non parallel rate environments 1 lt 1 gt Blue Chip Plan _ being analyzed The default is a maximum of eight scenarios allowed currently but more can be made available New scenarios can be created by selecting the New button and scenarios can be rearranged using the Move Up and Move Down buttons 33 Blue Chip Low
64. create dynamic reports e cmpLastUpdate Bank Number Plan Year shows the ABS 72 xX Vo fe cmpLastUpdate 1 B G D E F G H cmpLastUpdate 1 s axi mpLastUpdate para Moo 9 39810 10 No help available 11 Plan_Number 12 13 Formula result 39810 14 Help on this function Cancel 15 current year four digits of the plan e cmpPlanYear Bank Number Feb 09 Function Arguments f ajx Td c aaa Plan_Number fil Fis i a 00C c aak 7009 3 00C Mo help available c aac Plan_Mumber c aac a 001 c aac Help on this Function Cancel a 00 Formula resulk 2009 Institution Name shows the bank or unit name from the selected Compass plan This is useful for report headings or column headings that will update automatically when the plan list is modified or when unit names are changed in Compass e cmplinstName Bank Number oax Gal el kal n ABS xX w A cmpinstName 1 i Feb 09 ame 1 l axi mplnstMame pian Number 1 ced 1 Training Bank Mo help available Plan_Number Formula result Training Bank 10 11 Help on this Function Cancel 12 C 12 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Entering Functions Values and Formulas Manually The most direct and yet the most difficult way to build a spreadsheet is to type the
65. discounting rate in the market value calculation Current market values of the interest bearing balance sheet categories are calculated using the discounted cash flow method or supplied in the call report Theoretical liquidation value of an institution determined by calculating the Market Value of Assets and the Market Value of Liabilities then subtracting Market Value of Liabilities from Market Value of Assets 1 A mathematical relationship between a driver independent variable and an outcome dependent variable Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Minimum Margin New Maturities New Repricings Offering Rate Optionality Prepayment Prepayment Model Price Ramped Rate Shock Rate Sensitivity Gap Rate Shock 2 A shortcut to apply a single assumption or set of assumptions to a number of different elements The net interest margin needed to meet all expenditures as well as dividends and capital formation if needed If the net interest margin falls below the minimum then capital formation and ultimately the capital ratio will fall Maturities resulting from amortization or final maturity of balances added after projections begin These amounts are determined by account properties set with the Account Wizard or Edit Properties options See also Scheduled Maturities Balances that will reprice each month on transactions originated subsequent to the last day of ac
66. flag Click the Diagnostics button bottom center of data screen for guidance Restore Data Interest C15 206 As loaded 515 831 450 856 559 653 Revised 515 831 450 886 559 653 Change T 0 0 To clear the red flag manually enter the rate There are four types of rates that could be affected the offering rate in the Projections tab the scheduled maturity xrate rate in the Maturity Tab and the new repricing rate as well as the scheduled repricing xrate in the Repricing Tab B1 3 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 File Update hs Rates Projections Compute Reporting Utilities Help oh A BF B7 E Corporate Bonds M amp turity Balance Sheet 2 Projections Budget Maturity Variance Callable Fed Funds Hotes EG Can t Due Last EOM Balance 598 Total Scheduled Maturities nra Balance Difference a 7 B cash EOM rield 1 67 Rate 1 67 Yield Difference P 00m h Ba E Due From Banks D ee E 1 8 Due From Banks Adi aj a Fed Funds Sold Scheduled Adi Scheduled Scheduled Bb o he E Fed Funds Sold scheduled Maturities Scheduled Mats Scheduled PrePrits New Matu 5 i S ec rities Maturities State Maturities rate PrePrits State Maturities i D amp L 5 Treasures User Edt User Edit No Model ofo he B US Treasuries E Sep i a U 5 Agencies Oct 130 1 59 130 1 59 0 0 00 0 Pop oe E US Agencies Nov 0 0 00 0 0 00 0 0 00 0 A _
67. from your trial balance or other GL system report If not locate the difference by reviewing sub totals or line items Differences of up to 10 may result from rounding and can be adjusted in Miscellaneous Expenses Remember ALL adjustments other than capital or taxes need to be made in a subsidiary plan If you have made any adjustments to your general ledger data you will need to Compute All Departments at the Total Bank again before clearing any Red Flags Clearing Red Flags You now need to make sure each subsidiary plan does not have any red flags To open a subsidiary plan please navigate to the branch through the Consolidation screen Once you are in the subsidiary plan click the Account Projections button Correct any Red Flags Select the first account that has a red flag Click the Diagnostics button bottom center of data screen for guidance Restore Data Interest 20 205 206 As loaded 515 8631 450 566 559 653 Revised 515 631 450 886 559 653 Change 0 0 0 To clear the red flag manually enter the rate There are four types of rates that could be affected the offering rate in the Projections tab the scheduled maturity xrate rate in the Maturity Tab and the new repricing rate as well as the scheduled repricing xrate in the Repricing Tab B2 3 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 File Update Rates Projections Compute Reporting Utilities Help
68. its definition If you do not see a consolidation error log the consolidation is complete and you can go directly to view reports Refer to the Reporting section of the manual P ConsolidationError log Notepad File Edit Format View Help iThe following plans have consolidation errors Those plans marked withan asterisk C had significant enough errors that they could not be consolidated 1 C Users roxanne Desktop consolidation Log Bank mdb 2 Ci Users roxanne Desktop consolidation Log Bank Nev Sub mdb Ci Users roxanne Desktop consolidation Log liminations mdb Cr Users roxanne Desktop consolidation Log Holding Co mdb Aw Here is a Summary of the errors found Error Type 12 2f13 4 Account Errors IX XIXIXIKX Account Errors One or more of the accounts in the marked plan have settings that conflict with the consolidated plan The specific accounts and the descriptions of their errors are found below Bank Error Type New Loans Correlation Bank Nev Sub Error Type imvcntanacedcanbusnbenanecacbedmaddacanan p E Core Deposit Intangibles Maturity Eliminations Error Type Kaka ne wanda nae nan nanan nanan eens ania Poe ceeceesecesessss Core Deposit Intangibles Maturity Holding co Error Type scab aianesni nrc area craven a ana eee ee es Subordinated Debt Accrual Correlation This account is missing from the Consolidation Correlation table Maturity T
69. lower the Database Compact Utility default difference threshold of 10bps applied in the External Tools gt DataBridgeDownloadErrors log Options e Fix Small Maturity Imbalance adjusts the last month of maturity data and repricing data for user defined differences by plugging the minor difference in the last scheduled maturity or last scheduled repricing bucket Save Cancel e Download in Whole Dollars and Cents will store rounded data xl ee a ae 3 Consumer Fixed e Display Distribution Sets shows the distribution 4 l l Consumer Fixed set number in each DataBridge correlation table 3 Consumer Fixed as a reminder when adding new balance sheet 3 Nonaccrual Consumer accounts 3 Consumer Fixed e Compact DBs on Download is a feature that automatically compacts the Plan mdb and Rateworks mdb database files as they increase in size over time e Log Missing Branch Codes will display branch codes in your data files that are not currently accounted for in the model SBUs only Using Reports 1 Compute the Plan prior to viewing any reports 2 Print the following reports They can be found in the Reporting section of the menu bar e Balance Sheet Report EOM Balance e Balance Sheet Report Average Balance e Income Statement Monthly Not FTE Adjusted 3 Use the Compass Balance Sheet and Income Statement reports to verify that the balances agree to your financial institution s Month End Balance
70. margin as rates move up and down holding all account volumes constant Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Risk Cushion Scenario Scheduled Maturities Scheduled Maturities Xrate Scheduled Prepayments Spread Total Maturities Total Maturities Xrate Variance Report Xrate Yield The difference between the risk adjusted margin for a 100bp rate change or the risk adjusted capital for a 100bp rate change and the current margin or capital A particular set of rate and volume assumptions created to test the results of an alternate course of management action Contractual principal payments and final maturities of the portfolio that existed on the last day of the month of actual data See also New Maturities Prepayment Total Maturities The Xrate of the Scheduled Maturities in a particular month The amount of payments or principal reductions in excess of contractually required amounts Prepayments are calculated by application of a Prepayment Model to an account or category 1 The difference between the Driver Rate and the Price expressed as an addition or subtraction See also Factor 2 The difference between the existing rate to the customer and the institution s current rate for new transactions on that product In Compass a positive spread is always defined as an advantage to the customer The sum of Adjusted Scheduled Maturities Prepayments and New Maturitie
71. month as well as a future Hate Shock for a period you choose below These will stay in effect until another Rate Shock calculation ts performed To view future shock select the option in report properties To calculate rate shocks in the future simply select the time period and click OK Compass will store Omonths out Ramped Shock the future values until the next Rate Shock Shock intervals E months basis points Compute is run J months 10 months Current Month is Oct 2009 Shock Plan Shock levels a00 f 300 15 months Ok Cancel Report Properties Rate Shock Income To view your Rate Risk reports as a future shock right click on the report and select Level of Detail Full Account Properties Change the Show Future Rate Page break after assets Shock option to Yes To view the current Show Future Rate Shock month change the setting back to No aaa Header Cancel Save As Save Preview Charts 4 Basic E lt Adjust Chart List gt li Average Assets 000 S ull Net Interest Margin Fte A atio Advanced Graphs depicting Future Rate Shock vs Minimum Equity and Minimum jl Proj Met Int Inc Under Diff Ra Net Interest Income can be viewed in the Advanced Charts section in the fl Proj ROA Under Diff Rate Envir Reports menu If you run a rate shock compute 0 months out the report ul ia iia sree PEN and chart options are unavailable as there is no data to di
72. multiplied by Product Profitability divided by Total capital covering that asset Cost per 1 of Revenue Net Rate of Liabilities Asset Net Overhead Asset Ln Loss added together and divided by the Asset Rate Summary Page Items in the summary are sorted by Return on Equity highest to lowest A 27 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A ee Gross Product Costper Retun of Value Balance Yield Profit 1 of on Earning Index Costs pretax Revenue Equity Assets OD Protection 19 18 00 2 69 15 31 0 15 110 00 0 2 MBS amp CMO s 1 565 5 00 2 06 2 44 0 41 39 11 12e s 46 Res RE Floating 345 7 09 4 09 3 00 0 55 3024s ees 08 FHLB Stock hoe p 00 3 06 2 14 0 64 20 46 53 15 US Agencies 4 076 424s 2 he 1 62 062 21 54 Piles 1 66 Res RE Fixed paba pde 4 69 1 72 0 73 17 37 5 36 93 Commercial Loans v ar 24 3504 b 54 s 44ers elt 0 65 15 25 18 97 2 09 Commercial Real Estate 10 054 p 45 4 39 2 05 065 14 74 7 00 1 16 Commercial Loans Fixec 31 4961 bse 434 edd 0 65 14 66 24 95 3 66 Municipals 16 531 daer 3 79 5g 0 56 Pea 12 90 1 00 US Agency Step Ups 10 143 3 02 3 24 BES 0 05 EE Paer 61 Installment Fixed bo p 95 B024 43 0 07 pART 51 D3 Home Equity variable Bees B34 6 175 1r 0 97 1 24 rel 09 Due From Banks 2 d3 0i 2 40 2 40 0 00 OU 1 90 00 Int bearing Due From Ba q7 eeo 2 40 a054 0 04 OO 0475 00 Cash 599 00i 2 40 2 40 0 00 OO is 00 Fed Fun
73. net pre tax income Allow for the calculation of negative state taxes Edit Budget T axes To calculate the effective Federal Tax Rate the formula is Operating Income 35 540 034 Federal Tax 11 373 236 Federal Tax Operating Income State Tax State Tax 1 822 510 To calculate the effective State Tax Rate the formula is Net Income 22 344 286 State Tax Operating Income The tax amounts in the forecast are already adjusted for any tax exempt items as well as any adjustments you have in your Tax Information for the period being analyzed If you have questions regarding this analysis or need assistance in setting policy limits for Net Income ROA or ROE please call Support at 1 800 323 3281 A 18 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Rate Shock Market Value illustrates the impact of rate changes on your equity The Market Value of Equity also referred to as Economic Value of Equity is the theoretical liquidation value of your institution in a changing rate environment Rate Shock Sample Rate Shock Market Value AS of the end of December 7013 400 300 200 100 0 100 200 300 400 Assets Cash amp Due 440 235 440 234 440 234 445 239 440 227 440 046 447 966 447 030 447 710 Securities 422 409 422 404 416 051 414 534 407 625 394 245 360 831 365 117 356 105 Loans 1 328 465 1 317106 1 274131 1 234 459 1 197543 1 163 369 1 132 175 1 103 651 1 077 319 Loan Loss Reserve 18 519 18
74. non maturing deposit accounts in Gap analysis to reflect repricing betas Decay rates are also used for simulating a maturity structure for present value calculations in EVE Non maturity deposits include Savings Accounts Money Market Accounts and NOW accounts Decay rates may also be applied to non interest bearing checking accounts not used in Gap The most difficult aspect of using decay rates is to determine which artificial maturity is correct It is expected that financial institutions of all sizes assess the loss of their non maturing balances due to non competitiveness over time This analysis can be completed by the bank or a third party vendor including Plansmith s Educational and Advisory Services who can assist in this analysis Another method of calculating decay rates is to determine repricing speed This is accomplished by performing an historical analysis and figuring the percentage of a non maturing account s historical pricing change compared to outside rate indices Compass will automatically calculate an estimated Decay rate in months for each non maturing deposit account Compass compares the relative rate change of each non maturing deposit account to the 6 month T Bill rate over 72 months or less depending on the amount of history loaded in the plan Compass calculates a Rising Beta indicating how much the product rate increased as rates rose by 100 basis points Conversely a Falling Beta is calculated to determine ho
75. on Equity are reflected for the various rate shock levels This report is not available for nonparallel rate shocks If you have questions on running nonparallel shocks for Net Income results please call Support at 800 323 3281 To access the Rate Shock Net Income report right click on the Rate Shock Income report and select Yes to Show Net Income If you would like to review this information on a regular basis we suggest using the Save As option and save the report to your list Report Properties Rate Shock Net Income Level of Detail Summa Page break after assets Show Future Rate Shock Show Het Income Header Cancel Save As Save Preview Incorporating non interest income and expenses into the rate shock results is easy The report will default to show the forecasted Loan Fees Loan Loss Provision Non Interest Income and Non Interest Expense for the period of the shock For example in the sample below the results are for a two year shock as of month end February 2014 The forecasted Loan Fees Loan Loss Provision Non Interest Income and Non Interest Expense are constant in all rate scenarios and are derived from the two year projection from March 2014 through February 2016 A one year analysis will use a one year forecast three year the three year forecast etc A 15 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Rate Shock Net Income 2 Yea
76. outside rates like Prime or Fed Funds If an account has no model it will be shocked by the full amount of the shock increment For example in a 400 basis point rate shock a savings account with a Manual rate of 1 would decline to a zero rate and would climb to a rate of 5 which is unrealistic e Pricing models must be broad enough to cover any possible levels of shocked rates If the driver reaches a rate that is higher or lower than the highest or lowest rate in your pricing model an unreasonable price may result For example if Prime were currently 5 a 400 basis point rate shock would change Prime to as low as 1 and as high as 9 Plansmith recommends that your pricing models cover Driver Rate levels from 0 to 10 or higher e Prepayment models are necessary if your assets and liabilities have longer terms or if they have optionality Optionality means that your customer or obligor on a bond has the legal right to early redemption The major categories for this are 1 callable bonds 2 mortgage loans or mortgage backed securities and 3 Certificates with maturities in excess of one year The fact that customers act in their own best interest not the financial institution s creates what is called Convexity in in the market value calculations Please refer to the Prepayment Utility section of the User s Guide for information on applying prepayment models How MUCH SHOCK Is ENOUGH The answer will change from
77. possible level that your rate simulations might produce in the Driver Ceilings and Floors Auto Loans will never be priced at less than 7 nor more than 12 between those points the Auto Loan Rate is at Prime 5 Rate Spread Auto Loan Rate 12 11 T T o 10 S o g 7 T 10 20 30 40 t Driver Rate A ceiling and floor can be described as two changes in slope Each change in slope requires an additional entry to the Pricing matrix You can calculate these two additional points by subtracting the spread from the floor and subtracting the spread from the ceiling Examples of two accounts whose behaviors are often modeled using ceilings and floors would be Floating and Adjustable Rate Loans 30 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Floating Rate Loans with Floors and Ceilings It is very easy to capture the behavior of Floating Rate Loans with Floors and Ceilings Your loan maturity extract file normally contains the floor and ceiling fields so it is important to make sure your Compass DataBridge is set up to capture these fields Extract File Description N A Default 0 265 Start Monthly loan maturity location Default 0 266 End Monthly loan maturity location Default 0 267 start Day of the year of loan mature Default 0 268 End Day of the year of loan mature Default 0 269 Start Year of loan maturity location Default 0 ee i 270 End Year of loan maturity location Defa
78. pricing models you have set and edit only those you want to change Lock accounts set to manual Hide locked models i Lock accounts with detailed models Edit Offering Rate instead of Spread Lock accounts set to manual does not permit editing pricing set manually Lock accounts with detailed models does not permit editing of Offering Rate models by mistake Hide locked models removes locked models from view here oe YS a Edit Offering Rate instead of Spread change rate not spread to driver 15 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Setting Rate Availability on Driver Rate Screen From the Rate Spread Utility Screen you can set the Driver Rates that you want to see in the Driver Rate column This helps avoid clutter If you do not use all of the Driver Rates available to you then suppress them to shorten the list Set Rate Availability Restore Save Lock accounts set to manual Hide locked models j Lock accounts with detailed models Edit Offering Rate instead of Spread Account Name Model Type Driver Rate Driver Value Spread Factor Offering Rate lt Interest Bearing Due From Bank QGM Spread w Fed Funds v 4 17 0 00 4 17 Fed Funds Sold QM Spread w Fed Funds v 4 17 0 00 4 17 US Treasury Bills Manual wv lt None gt v 0 00 0 00 0 00 US Treasuries Notes QM Spread w 2 yr CMT v 321
79. replace existing are Distribute as offset Feb 1 3 044 2As 2 508 2 007 1 4936 D om Mar 13 088 2 462 251 2013 Ramp to 20843 Apr 13 132 2 408 2 525 2 020 May 13 176 2514 2 Ars 202 Jur 13 219 2539 2 Ade 2 034 Last Calculation Results Jul 13 263 2 565 z2 551 z204 Total Aug 13 307 2 59 2 5059 2047 Average Sep 13 350 2 618 256 2 054 Trend Oct 13 394 2644 2A 2 061 Nov 13 437 2 6 0 2 ood 2 06 Dec 13 481 2696 2 5092 20rd The Ramp to a value edit works the same as the Annual Growth edit The monthly increase is portioned according to each Branch s percentage of the total expense before the edit D o Toa o a e a e j e CS ome RAMP FROM TO A VALUE A starting point and ending target are entered and the values in between are interpolated Example of Ramp from to a Value After Edit Branch 01 Branch OZ Branch 03 Branch O4 Admin Funds Manager Tota Jul 13 000 2409 2 501 2 000 19 80 Select a Quick Edit Option ok Constant Sep 13 000 2 343 2500 2 000 Annual growth rate aan Earca Oct 73 000 2 360 2 500 2 000 Ramp fromto a value Hov 13 000 EATE 2 500 2 000 Offset Dec 13 000 2 a4 2 500 2 000 pvezeuing Diiss 2007 Jan 13 058 2 422 2511 2 009 Distribute replace existing Feb 14 290 3 B59 4797 7790 S Distribute as offset 7 1 3 405 5 agg gt OBS i as ae Ramp from 20000 Apr 16 576 3 141 3 188 2 550 75 455 May 17 745 3 405 3 413 fal 27 a73 To 4000 i Jun 18 512 3 633 3637 2910
80. rise These correlations are adjusted monthly with continual rate index input 69 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Unchecking the boxes for the red or orange rates will disable the correlation so the rates will not change As in the example above if you leave the Libor rates checked they will change according to the correlation to the Treasury rates when each scenario is loaded If unchecked the rates in red and orange will not change We recommend you leave the rates checked so that the rates change with each Treasury Yield Curve that is loaded into the model Each rate index in red will appear with a coefficient of multiple determination or R as below Coefficient of Multiple Non Yield Curve Rates Determination R PRIME 9969 1 mo LIBOR 98 33 3 mo LIBOR 98 48 6 mo LIBOR 98 28 30 day CP 99 45 90 day CD 98 74 30 yr Fixed 91 61 Corp Aaa 92 88 Corp Baa 13 97 State amp Local 84 35 11th District COFI 92 95 The R factor is a statistical measurement of the historical relationship between the Non Yield Curve Rates rates and the treasury curve and represents the percentage of the variance in the data that was accounted for in the model The closer the R is to 100 the better the model is able to fit historical data and as it is our hypothesis that any historical correlations will be maintained in the short term a higher R provides us greater confidence in ou
81. same distribution method is in effect for the non interest income expense area if adding totals without projections present SBU BRANCH DEPARTMENT MAINTENANCE All models are maintained on an individual plan basis Simply open the plan and change the model you want changed This allows for complete customization of the planning for branches or departments For example Branch 1 in Anytown may have its deposit products priced differently than Branch 2 that just opened up in Newtown which is 20 miles away The Compass system easily handles those differences If you generally have uniform pricing throughout your organization please contact Plansmith Support Services at 1 800 323 3281 as the pricing of your products can be centrally located in your RateWorks database Unique Reports Certain reports in the SBU Total Bank can Report Properties Balance Sheet be generated for all departments at the Level of Detail Summan Date Range Thisyea same time For example if you wish to Daa Tyne EOM Balance an gt ff200e to Dec 200 generate balance sheet reports for all Reporung Penod Mow E branches or departments change the Print Calculate Mix Mo All Departments switch to Yes Pane bicak aite dacie Budget Important This report must then be E kdlude Swaps saved as part of a report Script refer to Pint All Departments Scripts in the Reporting section of the manual Header Cancel if Save As 5 Preview i Anal
82. the Beta button displays the Beta Dialog box and the relationship of this account to the various Driver rates The historical data shows a better correlation of NOW Accounts to the 11 District COFI and has many months of data to back that up Beta Dialog NOW Current Suggested Value Driver PRIME 11th District COFI 93 11th District COFI v Pivot NA 1 36 1 36 Spread NA 1 22 A22 Rising Beta NA 0 04 0 04 Falling Beta NA 0 07 0 07 The Beta analysis covers the most recent 5 years of history plus the current year Use the slider below to reduce the number of months used for the analysis E NOW Accounts 93 11th District COFI Yield DO NNOODDO oHoMoHOHOHO cooococceaa Jan 2007 Jun 2011 11th District COFI The calculation of the Pivot Spread and Rising and Falling Betas are the same as in the previous example The Driver Pivot is the rate for that index as of last month end Note the varying Rising and aaa Reena F Driver 11th District COFI 11th District COFI Falling betas derived by a oe ie comparing the product rate in Bees a a Financial Compass to the 11 Srey URS a District COFI The Rising Beta is 4 Falling Beta 0 07 0 07 BP for every 100 BP rise in rates and the Falling Beta is 7 BP Notice that the previous driver used Prime only shows a correlation of 86 while the chart shows the high correlation to the 11 District COFI E HOW Accounts E 52 11th Distri
83. the Offset option except it replaces the values in each cell If you know a total amount and want that amount to be spread over several months then this option will perform that function For example if the known total growth will be 770 for the next 7 months the highlighted months this option would place 110 in each month Distribute as offset This is the same function as above but instead of replacing the value it adds or subtracts the calculated value to from the existing values in each cell Quick Model Mode This allows the user to quickly enter an annual growth rate For Projections Budget Maturity Variance FedFunds Notes example an annual growth rate of 12 grows the EOM balances by 1 per month for the next 5 years Similarly to grow a balance by 25 966 2 per month the user would enter an annual growth rate of 24 T 10 683 EOM balances are re forecasted with each new download Compass nss recalculates the forecast by applying the annual growth rate to the Madal saree last month s balance from the monthly download This continuous n EE re forecasting of future EOM balances creates a rolling forecast s 2 a Keep in mind that as EOM Balances are re forecasted so is the New m api Balance column T 980 24 10 965 249 10 965 10 965 10 965 10 965 297 10 965 10 965 Dec 10 965 260 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 New Model Mode J
84. the far right allows the addition and subtraction of data up to 10 strings EXAMPLE OF RATIO BUILDING For simplicity sake let s say you wanted to build a Loan Deposit ratio even though it s already calculated for you in Compass You first have to bringing the Loans category into the numerator position To move Loans into the numerator place your mouse cursor over the Loans category and hold down the left mouse button Drag and drop the Loans to the numerator box 92 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Ratio New Ratio Save As Accounts Summary Items al Balance Sheet a D Assets HO Cash amp Due fl Fed Funds Sold H Securities Data Types Numerator Average Balance Average Balance Budget Average Balance Budget Income E spense Aggregation Method Budget Target Balance Denominator m EDM Balance ae Ornimercial lncome E spense gt Commercial Loans Fixed rash o Commercial Loans Yar wot Ratio Components a Commercial Loans Var flr a Commercial Lis Adj wy ct Loans Commercial Revolving War wi 100 e 2 Tas Exempt Loans Fixed ow Tas Fsemnt nans War wc Once the Numerator is selected from the Accounts Summary Items menu you can choose a Data Type From the Numerator drop down box select Average Balance Note All numerator va
85. the location that you intend to use If you are not sure which path is correct write down the path of all the locations Now return to Excel and re open the spreadsheet lt 1 Microsoft Excel Book2 File Edit View Insert Format To vbe Repeat Ctrl Y D ae cut Ctrl x H1 Copy Ctrl C E Paste Ctrl V i Paste Special 4 5 Fill gt 6 Clear gt r i Delete 9 Delete Sheet 10 Move or Copy Sheet A Find Ctrl F n Replace Ctri H 15 Go To Ctrl G 16 r Edit Links Excel 2000 2006 To initialize the transferred spreadsheet select Edit then Links When the Links box appears you will likely see multiple entries one of which will be Compass xla and others that have a path ending with Compass xla Select the correct link by clicking on it and then click the Change Source button Once selected the other paths should disappear If they do not try another path that you wrote down Da a Ld re eg p i Home Insert Fage Layout Formulas Data Review qe ae GED EL 4 El Connections A o z pa 6 E B te Cow le oo ceric From From From From Other Existing Refresh m Access Web Text Sources Connections All Edit Links C 10 Get External Data Connections Edit Links in Excel 2007 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C In addition to changing the links you will need to update the plan list and verify the plans listed on the
86. time to time Consult your financial institution s policy or with your regulator as a starting point Remember that rate shock is designed as a kind of worst case test It is prudent to use maximum shock amounts that are larger than any reasonably predictable volatility in interest rates over the next few years WHAT IF THE RESULTS ARE BAD It s ironic that Rate Shock Income and Market Value move in opposite directions for many financial institutions Regulators are currently focused on Market Value measures however and market values are impacted most by 1 rising rates and 2 long maturities You could liquidate these long positions but the cost would probably be prohibitive A more reasonable solution is to revise asset liability projections to concentrate on safer loan investment and funding choices in the future Compass lets you experiment with various plans and compute Prolonged or Future Shock results to demonstrate that your action plan will work To perform a future shock just select how many months out you d like to run the shock in the Shock Future Balance Sheet and Rates in the Compute Rate Shock calculation box then select this option for viewing in the report properties menu 76 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DECAY RATES A decay rate is an artificial maturity that can be applied to Gap to Market Value or to both within Financial Compass Decay Rates are normally applied to
87. valuable way to learn how financial institutions work The modeling techniques used in Compass represent real world behavior cause and effect relationships between various elements Understanding these relationships is a key to success Compass helps by letting you build and experiment with these relationships First you start with excellent historical data including detailed projected cash flows from your current customer relationships Projection assumptions revolve around interest rates in your market called Drivers your price for assets and liabilities as influenced by those Drivers and the volume changes that result from that environment We all know that it is impossible to predict any of these factors with precision therefore Compass lets you test multiple possibilities quickly and easily Regulators require all financial institutions to perform interest rate risk analysis Compass provides for that and more Compass lets you test future courses of action so that you can adjust to current and future challenges Risk management allows you to demonstrate action plans that produce good results no matter which way rates move in the future Compass performs all risk measurements and provides the ability to adjust as your policies and regulators dictate Flexible gap time buckets rate shock increments and reporting all ensure that you will be prepared with the answers A unique risk measurement tool developed by Plansmith Margin Risk
88. was an increase from 20 645 000 to 21 000 000 a change of 355 000 The increase for each month will be distributed to each branch proportionate to each branch s percentage of the total before the edit In this case Branch 01 had a figure of 4 117 000 in January 2012 which was 19 94 of the total figure of 20 645 000 to start As a result this branch will receive an increase in January 2012 of 71 000 or 20 of the total increase that month of 355 000 Quick Edit Branch 01 Manual Branch DZ Manual Branch 03 Manual Branch 04 Manual Admin Select a Quick Edit Option Manual Ok Cancel f Annual growth rate f Ramp to a value f Ramp fromto a value f Offset f Aggregating Offset f Distibute replace existing f Distribute as offset oo Feb Mar Apr May Jun Jul Aug Sep Oct Mov 4 103 4 179 4 143 4 100 4 202 4 215 4 207 4 2 9 42a 4 269 402 40 416 425 43 440 454 461 46a 476 f 11 f 669 d faglB fala a000 0 125 cis 0 310 gar Asije 045 0 63 Dord a457 0 345 a04 o U16 f dou f ood mm A E G Oo coyc Constant Z Last Calculation Results Total Average Trend Z Funds Manager Total Manual bianual 2012 Jan 4 188 396 f nto 0 062 21 000 1 000 21 000 21 000 21 000 21 000 21 000 1 000 1 000 21 000 21 000 4 207 454 o 454 fed 21 000 Dec ANNUAL GROWTH RATE Using this option the projectio
89. with a Spread set to 1 will be called when the Offering Rate falls below 1 60 Market Spread is impacted by 1 Call Freq 2 Remaining Maturity and 3 Credit Risk if any Remember the Spread as defined by Compass is a positive benefit to the customer or as in this case the issuer The Spread should be set to zero if not supplied by your broker Usually set to an amount between zero and one percent 49 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Final Maturity Date Date downloaded from your extract file or supplied by your broker for manual entry Click on the Maturity Tab to make sure that the amount is also included in the appropriate month on the maturity table If not the call will not work Scheduled Adj Scheduled Scheduled Maturities Scheduled Mats Maturities Sate Maturities rate 2012 User Edt User Edit Jun 0 0 00 0 0 00 Jul 0 0 00 0 0 00 Aug 0 0 00 0 0 00 Sep 0 0 00 0 00 Oct 0 0 00 0 00 Hov 0 0 00 0 00 Dec T 0 00 0 0 00 2015 Jan 1 000 1 00 1 000 1 00 Feb 0 0 00 0 0 00 Mar 0 0 00 0 00 Apr 0 0 00 0 00 May 0 0 00 0 00 Jun 0 0 00 0 0 00 Jul 2 000 1 50 2 000 1 50 Aug 0 0 00 0 0 00 Sep 0 0 00 0 0 00 Oct 1 000 1 50 0 00 cc First Repricing Date This applies only to securities such as Step Ups that can potentially reprice at certain intervals or specified dates Here s an example of how the Callable Tab works Projections Budget Maturity Yana
90. xla xll v Cancel 3 After loading the Excel Add In for Compass your Excel main menu will contain Compass in the Excel standard menu bar E1 Microsoft Excel Balance Sheet Ad In Link xls B To load the Add In to Excel 2007 1 Click the Microsoft Office Button Excel Options Popular Formulas 2 Click Excel Options Proofing Save Advanced Customize 3 Click the Add Ins category Trust Center Resources 4 Inthe Manage box select Excel Add Ins and then Click Go z Ga 5 Load the Compass xla Add In file to the Add In Available List a Inthe Add In available box click Browse and open your C Program Files Compass folder Manage Excel Add ins C 2 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C b Select the Compass xla file and click OK f abit om i a Ou s Compass Addin v gt Search p Lookin Compass a Py My Recent Data yy Organize 22 Views gt fp New Folder Fe paahi Manual r KEE RE 2 Desktop SEIEN Favorite Links sei O O OOOO aa aasa D E2 Shortcut to Data a ZIRE Compassada 3 26 2007 3 46 PM M My GD Shortcut to Version 8 Risk Compass Plans Documents 43 Recently Changed M t 3 canoes H Recent Places My Network More Places Folders v dJ Audible P Business Objects E a CE Remote Tools ib A Citrix J Common Files r Compass J
91. you wish F Print a copy of the DataBridgeDowloandErrors log Select File Print from the left hand corner of the small box not from top of your screen Total balance of maturity data is not equal to the last EOM GL Balance for Account and Account has an EOM weighted yield of rate and an Average Monthly GL yield of rate error messages will be corrected later DataBridgeDownloadErrors log Notepa File Edit Format View Help I sample cConsolidation Bank amp Trust 1 mdb has the following errors GL Code 1110501 in Line 65 in the GL Extract File planglbal txt is not in the Balance on the following accounts the total balance of maturity data is not equal to the last EOM CMOS MBS Municipals SPE EEA EEE EEE EEE EEE SEG SEES SB BBB BABBAGE ESSE AAAA AARAA AAAA AA EEE I sample cConsolidation Mortgage Company mdb has the following errors on the following accounts the EOM weighted yield differs from the Average Monthly GL yield Account Eom weighted yield Avg Monthly GL Yield EOM Avg commercial Loans Fix 8 50 8 81 0 30 B1 1 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 NOTE Each separate unit has its own set of DataBridge errors To correct the error for a particular unit you must open that unit by selecting Consolidation and enter its DataBridge screen Make any additions to the Correlation Tables needed to correct the C
92. your Rate Forecast history Although one s pricing practices may not intentionally be to gauge prices off of an outside index the bank may be unconsciously pricing its products off of that index in reality To obtain the beta we first calculate correlations between all indices in your Rate Forecast and the product price to see which index is the best fit The beta is then calculated by examining each period where the index Pricing Model rose or fell and reviewing the product price to see if the price rose or fell If the product price rose when rates rose then we use that data to calculate the rising beta When rates fell and the product price fell we use that data to calculate the falling beta A beta will not be calculated if the product price moved opposite to rate eee index changes a E The best fit for a beta model will be an indexed loan Hodel Selection C Manual f Duick Model Cancel f Mew Model April Rate portfolio such as Commercial Variable or HELOC If we Ba iag look at a HELOC account it is normally indexed to Prime Calec Spread Rate This HELOC account already has a Quick Model of Value 175 Lag g Mon Prime 1 75 35 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Beta Button In order to use the beta function the New Model option should be selected and the Beta button will become visible Clicking on the Beta button brings up the Beta Dialog screen This product
93. 0 0 00 0 00 3 55 3 70 7 25 7 22 1 00 6 22 0 00 0 00 0 00 6 10 0 00 6 10 7 22 0 50 6 72 7 Interest Bearing Due From Bank QM Spread w Fed Funds Fed Funds Sold QM Spread w Fed Funds US Treasury Bills Manual w lt None gt US Treasuries Notes QM Spread w 2 yr CMT US Agencies QM Spread w 5 yr CMT SBA Pools Manual wv lt None gt Private CMO s Manual w lt None gt Agency CMO s Manual w lt None gt MBS s QM Spread w 5 yr CMT MBS s Var QM Spread w 1 yr CMT Municipals QM Spread w State amp Local Taxable Municipals QM Spread w 5 yr CMT Equity Securities Manual w lt None gt Other Debt Securities Manual wv lt None gt Other Bank CD s QM Spread w 1 yr CMT Commercial Loans Fix Detailed v 5 yr CMT Commercial Loans ar QM Spread w PRIME Commercial Loans Var w Floors QM Spread w PRIME SBA Loans Unguaranteed QM Spread w PRIME SBA Guaranteed Loans Manual wv lt None gt Commercial RE Fixed QM Spread w 5 yr CMT Commercial RE Var QM Spread w PRIME Commercial RE Var w Floors Manual w lt None gt Residential RE Fixed QM Spread w 30 yr Fixed Residential RE Variable QM Spread w PRIME 44 4 44 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4j 4 4 The Rate Spread Utility Screen You will quickly see that all your accounts are viewed in one place with the ability to change driver and spread relationships in several locations at once There are several sub utilities that allow you to lock prevent inadvertent changes the complex
94. 0 x E Comm RE Morn Accerual Demand Deposits Interest Bearing Deposits Dn Save Ratio As Home Equity Non Acerual Personal Direct Hon Accrual Hame Loan Deposit Created By COH 4 Other Loans On 02 21 2008 Overdratts By gt Note Both the numerator and the denominator have a Loans In Process Loan Loss Reserve Fined Assets Investment Loss Reserve Modified Goodwill 09 OREO ores Other Assets 2 4 Liabilities Ok Cancel Demand Deposits Select OK to save your new ratio into Custom Ratios section of the Report Designer You can now add the new ratio to any custom report using the Report Designer 94 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 To access ratios that were created earlier use the drop down box in the upper left hand corner of the Ratio Designer screen and previously created ratios will appear Select one and its components will appear in the Design Area ready for any alterations To Create a New Ratio select the lt New Ratio gt option in the same box and it clears the current values from the Ratio Designer To view the Loan Deposit Ratio just designed go to the Report Designer and slide the scroll bar down to the bottom to the Custom Ratios section where all custom ratios are stored CUM Lapltal Notes UUU S I EOM Demand Deposits 000 s Ref Descript
95. 000 1 149 085 233 000 Sep 1 617 508 1 23 19 576 0 149 320 233 000 Oct 1 618 856 1 23 19 8093 0 149 555 233 000 Nov 1 620 205 1 24 20 042 0 143 791 233 000 Dec 1 621 555 1 25 20 275 0 150 032 233 000 Manually Adjust LLP Calculated Results The Adjusted Provision column will also allow you to utilize this screen for analysis but overwrite the calculated numbers Note that if this column is populated the model will inform you that the data will be transferred to the LLR and LLP accounts initially but the LLR and LLP accounts will be set back to Manual and future model changes will not be reflected in these accounts This is a good tool to utilize if you would like to analyze these accounts periodically e g quarterly and apply your results but do not wish to have monthly fluctuations flow through your projections 56 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Allowance for Loan Loss Model y ee Model Selection C Manual C New Model e Testl z Distribute Provision Evenly L j Total Target Allowance Calculated Adjusted Resulting Loans Allowance for Provision Provision Loan 000 s asa of Loan for oss T otal All Loss Loan Loans Loans 000 s Loss 1 603 444 1 18 13 928 400 000 0 1 18 1 610 785 1 18 19 078 148 149 150 000 1 18 1 612 127 1 19 19 228 148 382 150 000 1 19 1 613 471 1 20 19 228 500 000 500 000 1 19
96. 002 Eom Balancel lt lt Cash amp Due Cash and Due From Banks Fed Funds Sold Fed Funds Sold Securities U S Gov t US Treasuries U S Agencies US Agencies Mortgage Backed Sec CMO s MBS Municipal Sec Municipals Stock FHLB Stock Other Securities Corporate Bonds Trading Trading Securities Gross Unrealized AFS G L Unreal Gains Losses Compass accounts and or categories Compute Summary Tax List Budget Average Balance Budget Cost Budget EOM Balance Budget Expense Budget Income Budget Yield Cast EOM Balance EOM Cost EOM Yield Expense Substitute Descriptors Roce 4 zi Using the assign buttons when a Folder is selected will assign all of the Folder contents in the selected direction mgpass T Account Properties Category Account List _ Options List Options T F Data Item List Dates Months Years _ Values IV Substitute Dest riptors Using the assign buttons when a folder is selected will assign all of the folder contents in the selected direction Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Data Wizard acts as a shortcut to create arguments and populate reports with data The wizard allows you to reference cells that contain the codes you l l Build Edit Plan List pulled from the Category Account List Data Item List or Account Properties opi Category Account List You
97. 06 Commercial Loans Adj Commercial Leases Vari Changes 5H 1 66 6660000068 Commercial Loans Adj Commercial Floor Plans 5H 1 66 6660002168 Commercial Loans Adj Commercial Floor Plans aan Pi 1 HAHAHAHAHA Commercial Loans Commercial RZE Fixed Commercial RZE Var Cancel AAU ABHAHA 108 Commercial Loans ae Commercial sae Commercial Loans Adj Commercial Fixed Commercial RZE Adj Commercial RZE Adj w fl Comm R E Constr Fix 4 When the DataBridge performs the download any accounts flagged in the Distribution Table are held in memory during the EOM AVG and INC EXP portions of the download Upon completion of the maturity portion of the download the DataBridge calculates from the maturity data the percentage of total dollars to be distributed into each of the accounts in the set The average and end of month balances are distributed in proportion to the total maturities in each category The weighted average yield is calculated for each category from the rates on that account s maturities The yield times the average balance is used to proportion the income to the categories This process insures that the balance sheet and income totals will never be changed If the application is out of balance to the general ledger or if all of the data cannot be read because of missing descriptors the error will be allocated proportionately among ALL the members of the set DATA VERIFICATION Data verification aft
98. 1 Base any accounts manually added within this folder Additional Tier 1 Capital Manually added via accounts opened within this folder Total Tier 1 Capital Common Equity Tier 1 Capital Additional Tier 1 Capital Tier 2 Base Optionally Included based on Capital Classification Setting Borrowed Funds Preferred Stock Capital Notes Net Unrealized AFS G L Other Capital Limited ALLL The maximum of 1 25 of Total Risk Weighted Assets or Total Loan Loss Reserve Tier 2 Capital Tier 2 Base Limited ALLL any accounts manually added within this folder Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Total Capital Total Tier 1 Capital Tier 2 Capital Quarterly Average Assets Current Month MTD Average Assets Last Month MTD Average Assets Two Months Ago MTD Average Assets 3 Total Assets for the Leverage Ratio Quarterly Average Assets any accounts manually added within this folder Risk Weighted Assets Total of Risk Based Capital Factor calculation for each asset account These are applied through the Account Wizard settings Choose a defined percentage e g 0 100 a Custom percentage or a Custom percentage by Month Total Risk Weighted Assets Risk Weighted Assets any accounts manually added within this folder Disallowed Reserve Total Loan Loss Reserve less 1 25 of Total Risk Weighted Assets or O if the result is negative Net Risk Weighted Assets
99. 1 Projections Budget Maturity Repricing Vanance Fed Funds Total EOP Mew Offering Total Maturities Balance Balance Rate Maturities rake Interest amaf Quick gt Modeled Feb fff Ud EOM rield 2b 180 Mar tee 2r 4 401 Apr r220 1 155 4 50 J67 45 290 779 If the box says Manual you will need to enter the rate in each month of your projections Better yet give us a call and we ll review Offer Rate modeling with you Exit and Save your changes to the individual plan and open the next plan your wish to edit When all changes are complete from Total Consolidated Plan Compute All Plans Re Compute Rate Shock as well After revisions reports showing projected results and the revised rate shock may be printed B1 7 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 MONTHLY UPDATE PROCEDURE FOR SBU Verify that the latest extract files from your data processor have been copied to the same folder where your plan mdb files are located after you have made a backup This path is Perform the download A Open Compass by clicking on the Compass icon on your desktop B Select the Total Bank plan from the Select a Plan File window and click Open Your plan is called fash D Verify that the Month and Year are correct C Click the DataBridge button E Click on the Perform Download button The DataBridge will load information to each of the subsidiary plans automaticall
100. 101 11 O00 0 0 12 30 99 3 486413400 500 450 460 OF OT I0 I oo mm2 12 30 99 4 4864134R8 500 455 465 01 01 43 E 035 01 0 23 12 30 99 5 46413456 600 470 470 0101A 12 ooo 0 01 24 12 30 99 6 4864134T4 EO 475 475 01 01 11 12 ooo 001 25 12 30 99 Bond ID Typically this will either be the CUSIP number or a code that uniquely identifies the amount of a particular issue that is included in an account Book Value thousands This data is downloaded into the Scheduled Maturity fields Coupon Rate The rate paid on the instrument at the time of origination The coupon rate may often be different from the yield Yield to Maturity The annualized rate of return that you would earn if you bought an investment at its current market price and held it until maturity Call Date This is the first date on which the security can be called or the historical call date past date Call Freq months The Call Freq months determines how often the Spread will be checked against the difference between the Coupon Rate and Offering Rate to determine prepayment or call If you do not have any data for this field enter a value of one 1 month or zero 0 months for a one time call Spread Or Spread to Call This is the differential between the Coupon Rate and Offering Rate that triggers the call The Spread will only be checked on or after the Call Date For example a bond with a Coupon Rate of 1 70
101. 14 02 Apr 2021 Bank name The Palmetto Bank Min Equity Ratio 6 00 Yield Scenario Updates Always prompt first on Parallel Data in Risk Compass Include when possib 02 Aug 2016 Hide Instrument ID s 10 Sep 2014 30 Sep 2013 02 Feb 2017 IDOOOODS4 05 Apr 2014 IDO000026 20 Now 2015 IDO000132 15 Dec 2014 1D0000011 25 Jun 2013 I1DO000018 04 Apr 2016 IDO000030 20 Jul 2016 IDOOO0078 02 Aug 2013 Strategic Business Units SBUs If you operate a departmental system the historic data is loaded into each unit You may view and export to Excel historic prepayment and instrument level detail at both the Total Bank and at each unit Model assumptions are set and maintained at the unit level only 48 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The information for the Put Call Evaluation Module is accessed by clicking on Account Projections Choose the appropriate account and select the Callable tab The data for these fields are either downloaded from your Investment Maturity file or manually entered from reports generated by your broker In the example below we have chosen a Municipal Bond account The data is arranged as follows Projections Budget Maturity Vanance Callable Fedirunde Hotes mee Betas Cag its canae i i A EA thousands Fate Maturity month ate Date 1 4864134N7 1000 4254 50 04 01 12 3 00D 01 01 20 12 30 99 2 464134P2 2000 4454 55 0
102. 4 Change 8 Change Asset MV i 20 A 0 34 Liability MV 245 893 246 385 0 20 244 659 0 50 MV Equity 30 789 30 258 023 30 494 100 MV Equity Ratio 10 93 10 94 11 08 The Bank meets its minimum equity requirement of 8 00 in all rate scenarios Risk Compass will detail the results for the two worst case scenarios If any scenarios are outside the policy guidelines they will be listed as in the example below The Bank is under its minimum equity limit of 10 00 in scenarios 2 5 6 and 7 73 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Viewing Results Reporting Options l l l l l The Reporting Options allow for the entry of verbiage in each of the non parallel analyses It is recommended that your institution add commentary regarding the scenarios used in the analysis If you are unsure of what to enter we can recommend sample language for you to use Yield Shock Properties Reset All Defaults Yield Shock Properties Simulation of Het Interest Margin OF the non parallel weld curve shock scenarios analyzed xyz bank believes that scenarios one two and three are more realistic than the others These scenarios were derved from the Blue Chip Financial Forecasts based on monthly surveys of the nation s top Economists Although the worst case scenarios identiied above are belleved to be unlikely per management discussion at the ALCO Board meeting WDY we still find tt necessary to best th
103. 519 18 519 18 519 18 519 18 519 18 519 18 519 18 519 Fixed Assets 51 671 51 671 51 671 51 67 51 67 51 67 51 67 51 67 51 671 Intangible Assets 14 645 14 645 14 645 14 645 14 645 14 645 14 645 14 645 14 645 OREO 23572 23572 23572 235r 235r 235r 235r 2I Dr 2J BrE Other Assets 63 051 63 051 63 051 63 551 63 551 63 551 63 551 63 551 63 651 Total Assets 2 334 352 2 322 973 2 276 440 2 232 451 2 188 814 2 140 929 2 096 191 2 054 625 2 016 353 Liabilities Demand Deposits 436 134 436 134 436 134 436 134 424 370 405 106 392 693 376 067 364 240 Interest Bearing Deposits 1 467 799 1 467 8601 1 467 609 1 467 617 1 461 171 1 441 011 1 420 405 1 399 466 1 379 555 Borrowed Funds 54 514 54 514 54 514 64 514 64 514 4 514 64 514 4 514 84 514 Other Liabilities ze 0rd ze 0rd zerda de ord 2 0 4 deor d de ard de ard de Ard Total Liabilities 2 011 320 2 011 322 2 011 330 2 011 338 1 992 936 1 956 504 1 920 485 1 884 962 1 851 182 Market Value of Equity 323 032 311 651 265 110 221 113 195 878 184 425 175 706 169 663 165 171 Equity Change 127 154 115 773 69 232 25 235 0 11 453 20 172 26 015 0 707 Change in M of Equity 64 91 59 10 35 34 12 65 0 00 5 85 10 30 13 28 15 68 Mark to Market Capital Ratio 13 64 13 42 11 65 9 90 6 95 6 61 6 36 B27 6 19 Duration of Equity months 70 16 To calculate Equity Change the Market Value of Equity at the zero point is subtracted from the Market Value of Equity position at that rate ch
104. 6 or ee 2 oe So o In the Annual growth rate edit mode the Total expense projection increases 5 from 19 911 to 20 843 or 932 Each month the increase in total expense has been distributed proportionately between the branches For example the December 2007 Total expense changed from 20 100 to 20 843 This is an increase of 743 The original Branch 01 December 07 figure of 13 000 was 64 68 of the original December total of 20 100 so the increase for that month is 64 68 of 743 or 480 115 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RAMP TOA VALUE This method is used to reach a target expense by a specific date The Total column in this case has been ramped to a value of 20 843 the same increase as the annual growth example The branch columns will receive a proportionate amount of the total increase in each month based upon the expense numbers present before the edit Example of Ramp to a value After Edit Branch 01 Branch 0 Branch 03 Branch 04 Admin Funds Manager Tota Select a Quick Edit Option Jul 13 000 2 309 2 500 2 000 13 80 a o Aug 13 000 E 2500 2 000 19 82 Annual growth rate Cancel Sep 13 000 245 2 500 2 000 19 84 Ramp to a value ema Oct 13 000 2360 2 500 2 000 19 56 Ramp from to 4 value How 13 000 foe 2 500 2 000 193 87 Lisal Dec 13 000 2 394 2 500 2 000 19 89 oo o yoy oyo m i an A a apoyo lo co Saran ya 2007 Jan 13 000 2411 2500 2 000 13 511 istibube
105. 672 81 052 80 554 77 761 79 823 77 156 79 560 8 06 8 12 9 68 8 71 9 50 8 98 8 73 8 71 8 68 8 65 8 63 8 61 8 58 8 56 8 51 8 45 8 44 8 43 26 03 27 23 10 49 10 83 10 58 10 51 10 96 10 96 10 96 10 96 10 96 10 96 10 96 10 96 10 96 10 96 10 965 10 965 The Projections tab is where forecasting is performed models are built and instantaneous calculations are made in response to change This view shows the major elements of recent history in gray and five years of forecasted data Below the column headings of EOM Balances and Offering Rates are the options that define user input and modeling User Edit indicates that the user can manually change the data Compass maintains correct mathematical relationships between the elements of each balance sheet account to accurately reflect real life This mathematical relationship automatically solves for the New Balances required when you input EOM Balances and solves for EOM Balances if the user is giving New monthly additions Balance forecasts Here are the equations depending on the item being forecasted New Balance EOM Balance Previous Month s EOM Balance Maturing Balances Caution If the scheduled maturities exceed the current EOM balances the New Balance for Maturing Accounts becomes negative a logic error and you will have to rethink your forecast EOM Balance Previous Month s EOM Balance Maturing Balances New Balance 22 Pl
106. 7 7 66 157 8 98 76 939 8 71 10 96 591 7 66 591 8 35 81 970 8 68 10 96 184 7 66 184 8 64 79 055 8 65 10 96 Mh o gt mio Q3 9 OM Oar m oO J oy ol 10 9 10 9 195 Quick Edit Clear 7 66 DEN 195 8 64 8 73 8 75 8 59 9 83 8 45 81 497 78 672 81 052 80 854 77 761 79 823 8 63 8 61 8 58 8 56 8 51 8 45 cell you want to change and type the new value Compass also includes specialized editing methods Quick Edits to make data Copy 860 77156 3 44 revisions easy Paste 3 07 79 560 8 43 Calc Total Avg amp Trend 52 8 82 79 333 8 40 Feb 10 968 2a g5 A0 8 50 71 552 8 39 10 965 Sep 10 965 297 8 73 297 8 59 76 955 8 42 10 96 Dec 10 965 260 9 05 260 8 25 79 592 8 43 10 96 23 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Quick Edit Options The Quick Edit feature provides greater power with several shortcut and calculation aides This feature is only available when the column is set to Quick Edit Manual or User Edit Activate the Quick Edit by highlighting any Select a Quick Edit Option Ok range of cells and then clicking the right mouse button The option menu ae A l growth rate Cancel offers several selections including Quick Edit Clear Copy Paste and C Ramp to a value Calculate Total Average and Trend of the highlighted data Select Quick ie HeWAN I Edit and the following options become available PA eai Die C Distr
107. 76 053 l aa larann Ot me m re s n e 77238 This operation can be performed at any E Persona Money Markets Nov 78 906 2 282 807 113 754 478 024 732 78 333 E NorPersonal Money Markets a a a 5 ay 5 L H 7 035 7 79 835 a a a er guo o Hn level within the account structure up to Sa Time Deposits Mat 8 749 1 810 699 2235 7 0 504 374 7 45 78 Be r 200 N Apr 78 338 473 7 20 34 7 59 499 471 7 48 78 544 be be age ig ae E scart r re Total Assets At this point the user can c ne a ee EE ig ss Fs at Fs investigate other tabs and can apply CD gt 36Mth gt 100 000 Sep 76 640 3771 7 18 4 070 7 60 486 874 1 61 76 789 E Brokered CD gt 100 000 i g il a a iS d h ill Il h 2 e dov 75 713 7 995 6 92 5 917 7 68 75 956 5 fg lt a 9 o o tosses models that will alter all the accounts Bo 0 eun cma e o o e 7 baa Eee within the chosen category E CD gt 26Mth 100 000 Pitta fe Conmertai marss asame R a eS Interest w 2007 2008 2009 2mo 2m1 car B 4s Load BB Brokered CD lt 100 000 Asboaded 4607249 546030 5332051 6045923 6E3978 0 U Revees E Other Irt Besrnng Deposits a feces __ 4 607 249 5 460 301 _5 932 051_6 045 923_ Esen 1 2 3 4 pn 7 7 J 9 n g Plan Fie C Program Fiee Compase Sample Bank Sample Bark mdd 2 9 2003 2 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Assumption Validation Feature Red Flags Red Flags next to an account name indicate that a logic or data error exis
108. A E Ureeal Gains Losses Cy Loans yy Commercial E Commercial Loans Fix E Commercial Loans Var E Commercial Loans Var w Floors R E Jul 38 943 505 3 37 505 3 94 142 347 439 38 94 Aug 38 943 505 3 40 505 3 80 142 058 43 38 94 Sep 33 943 1 007 3 47 1 007 3 90 141 638 45 38 94 Oct 38 943 498 3 53 498 3 94 141 403 43 38 34 Nov 38 943 1 006 3 60 1 006 4 38 140 843 4 34 38 94 Dec 38 943 507 3 63 507 4 01 140 440 4 33 38 34 003 Jan 38 943 506 3 67 506 4 02 140 446 4 33 38 34 Feb 38 943 503 3 70 503 4 75 140 300 4 32 38 94 Mar 38 943 510 3 73 510 4 25 140 086 4 32 38 94 Apr 38 943 1 004 377 1 004 4 64 139 507 4 30 38 94 May 38 943 496 3 80 496 4 57 139 063 423 38 34 Projections For More Projections eR hm 9 1 GO Od Go we E SBA Loans Unguaranteed Jun 38 943 497 3 84 497 4 30 138 802 4 28 38 943 B SBA Guaranteed Loans Jul 38 943 514 3 83 514 4 82 138 372 4 26 38 943 5 A Real Estate Aug 38 943 499 3 92 499 4 59 138 103 4 26 38 943 S Commercial Commercial RE Fixed Oct 38 943 493 3 99 499 4 70 137 776 4 25 38 343 Commercial RE Va Nov 38 943 494 4 03 494 4 69 137 463 4 24 38 943 Commercial RE ae w Floors Dec 38 943 1 001 4 07 1 001 471 137 006 4 22 38 943 IMA aa 30 0149 400 aq Aa0 awn 12e c0 am 90 G49 J Residential 4 Residential RE Fixed Residential RE Vatiable Residential RE Var w Floces Restore Data Hini Pint Tab Home Equiy Loans Ineses v 207 208 209 20m0 1 2 E As Loaded Home Equity Loa
109. AE EN EE E EAE enue EE AA A E E 125 Compass Calculation Index scsssssssssessessessessessecseussessussucsucsussucsaesacsassateaeeneentenss Appendix A Compass Monthly Update and Validation Procedures sscsssscesessesecseseseeseseeseeeee Appendix B Excel Add In for COMmpaSS cccssssssssssesessssecsesesscsesscacsesscscsusacscsacacsnsacecsatacsusecesees Appendix C GN OSS ANY oie epoetencaseceea EEE E i Yellow highlighted topics refer to Financial Compass features only Green highlighted topics refer to both Financial Compass and Budget Compass Plus features All features are available for Budget Compass Plus and Budget Compass clients with a system upgrade Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Congratulations Your organization has chosen the best planning system available for community financial institutions You are now part of the Compass team Many of the ideas for Compass have come from our community of users Compass is the result of over 40 years of experience working with our clients we welcome your comments and suggestions Planning Every financial institution benefits from building plans both short and long term Compass is designed so that the planning process is as simple and fast as possible Your computer does the work of processing the very complex interactions between the interest rate environment and financial institution management decisions Compass is also a
110. Compass program and select No to saving plan changes This will return your database to z 204 its state prior to shifting The second is to retrieve your backup copy of the plan If you have shifted your plan by accident and saved your changes without making a Patom Dewnload backup please contact Plansmith Support Services at 1 800 323 3281 Download Maturities Only Downloading Scheduled Maturities after Shifting the Plan There is an option in the DataBridge screen to download scheduled maturity data only Make sure the December maturity file is in your data directory and press the Download Maturities Only button ZERO OUT PLAN This option will remove ALL data and models from your database file It is useful when creating a plan e g for a new branch using the File Save As option Lock BUDGET Developing a budget plan in Compass is accomplished by inputting actual balance Lock Budget and income expense data then re forecasting from the latest monthly update After receiving approval on the final projections the next step is to transfer the Please select a starting projections into the Budget Tab or lock your budget ALWAYS make sure you are ae Budget locking computed numbers as budget z foo k Cancel 124 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 When you lock your budget you are moving the data from Account Projections to the Budget area of the database where it will be sto
111. Debt Securities 4 Other Bank CD s EB Other Bank CD s Gross Unrealized AFS G L B Unreal Gains Losses Loans 4 Commercial E Commercial Loans Fix EB Commercial Loans Var E Commercial Loans Var w Floor SBA Loans Unguaranteed B SBA Guaranteed Loans Real Estate 4 Commercial Commercial RE Fixed Commercial RE Var Commercial RE Var w Flo 4 Residential Residential RE Fixed Residential RE Variable E Residential RF Var w7 Flnr lt gt Plan File Pronram Files Camnass S amnle Rank Samnle Rank medh 2 21 20NA TAR PM on OO e wh 85 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 GETTING DATA INTO THE DESIGN AREA First place your cursor on the report description line where you want your data Next select the data type from the drop down menu Default Data Type at the top of the screen Each account has many components such as Average Balance Interest Yield etc so you must tell the designer which of these elements you want to use for this data line Once you have specified the data type select the account you wish to put into the report If you need to delete a line right click on the Description column and select Delete Row r p Compass Report Designer File Update Rates Projections Compute Reporting Utilities Help Ole Oo OFT el a if x m TON IE 1 ESD Repo
112. EOM Capital Notes 000 s EOM Current Earnings 000 s EOM Demand Deposits 000 s EOM Dividends 000 s EOM Earning Assets 000 s EOM Interest Bearing Deposits 000 s EOM Investment Loss Reserve 000 s EOM Liabilities 000 s EOM Loan Loss Reserve 000 s EOM Loans 000 s EOM Non Earning Assets 000 s EOM Paying Liabilities 000 s EOM Time Deposits 000 s APPENDIX C d 1035 d 1041 d 1042 d 1050 d 1051 d 1012 s 3040 s 3043 s 3031 s 3033 s 3028 s 3041 s 3044 s 3032 s 3034 s 3029 s 3050 s 3049 s 3073 s 3087 s 3089 s 3086 s 3008 s 3007 s 3090 s 3100 s 3075 s 3051 s 3069 s 3068 s 3067 s 3046 s 3088 s 3085 s 3054 s 3036 s 3010 s 3009 s 3026 s 3093 s 3045 s 3053 s 3052 s 3082 s 3083 C 15 Total Maturities Exit Rate Total Prepayments Total Prepayments Exit Rate Total Repricings Total Repricings Exit Rate Yield Fed Tax Exempt Non TEFRA Avg Assets 000 s Fed Tax Exempt Non TEFRA EOM Assets 000 s Fed Tax Exempt Non TEFRA FTE Int Inc S s Fed Tax Exempt Non TEFRA FTE Int Inc Adj S s Fed Tax Exempt Non TEFRA Int Inc S s Fed Tax Exempt TEFRA Avg Assets 000 s Fed Tax Exempt TEFRA EOM Assets 000 s Fed Tax Exempt TEFRA FTE Int Inc S s Fed Tax Exempt TEFRA FTE Int Inc Adj S s Fed Tax Exempt TEFRA Int Inc S s Fed Taxes Distributed S s Fed Taxes Undistributed S s Free Funds Ratio Int Exp Earning Assets Ratio Int Exp Paying Liabilities Ratio Int Inc Ear
113. February 2007 and so on The proportional distribution allotted 200 000 to Branch 01 in January 2007 19 94 of 1 000 000 and 398 000 to February 19 92 of 2 000 000 according to the branch percentage of the total column prior to the edit 111 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DISTRIBUTE REPLACE EXISTING This edit will take the total amount entered and divide it equally among the highlighted cells Example of Distribute replace existing After Edit Funds Quick Edit Branch 0T Branch 02 Branch 03 Branch 04 Admin Manager Total Select a Quick Edit Option ok Constant Nov 4049 370 Fre 9 720 0 0 f Annual growth rate Cancel Dec 4083 390 740l 9 697 0 0 0 0 f Ramp to a value f Ramp fromto a value 2007 Jan 3 389 arr 7 194 a440 20 000 Offset Feb 3984 793 7249 9 304 0 20 S ceee ia Mar 3 980 359 7303 9 328 f Distribute replace existing 0 C Distribute as offset 20 May 3 988 403 7 444 9 165 0 2 Muhu 240000 Jun 4 002 411 7533 9 054 0 0 D Jul 4 014 415 r 5619 fda Last Calculation Results Aug 4 074 432 rr db r699 20 Sep 4 071 439 fod f bon Total D VETAgE i Oct 4 069 446 P14 Tor 0 2U UU Trend Mov 4 066 453 hore 509 Dec 4074 461 0 051 r44 0 0 The distributed total of 240 000 000 has been divided by the twelve cells highlighted which portions out a total balance of 20 000 000 to each cell The net change between the new total
114. Last Calculation Results Jul 20077 3 003 3 061 3 089 J ad Aug 21 240 4135 4 085 4 260 33 727 Average Sep 22400 4392 4308 3 446 34 545 Trend Det 23 559 4 650 4531 4 624 76 36 Nov 24 716 4 411 4 705 3 802 Dec eua gird 4 975 3 980 m A GA m A G m G GA a mm m i G a G G a G E a G G a G a G G a G G an G G a a a cs ce re ca Co 40 000 cc cc The January 2007 Total after edit value of 20 000 is 89 greater than the before edit value in January 2007 of 19 911 Branch 01 increased by 58 in January 2007 as it was 65 29 of the total January 2007 expense of 19 911 before the edit and 65 29 of 89 is 58 Additionally December s value in Branch 01 before the edit was 13 000 and now is 25 871 an increase of 12 871 This increase in Branch 01 is 64 68 of 19 900 19 900 is the increase from the original Total expense value of 20 100 in December to 40 000 116 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 OFFSET The Offset option adds subtracts a value to from each cell that is highlighted This edit is useful when a forecast is in place but additional increase decreases need to be made to that current projection Example of Offset After Edit Branch 01 Branch 02 Branch 03 Branch O4 Admin Funds Manager Total Select a Quick Edit Option Ok Jul 13 000 2 309 2 400 2 000 19 80 f Constant x Aug 13 000 2 326 2 500 2 000 19 82 19 84 19 56 Z Annual growth rate Eenes Se
115. Loans Dec oO 0 00 0 0 00 0 0 00 0 Click the Maturity Tab Change the last number in the Scheduled Maturities column to eliminate a small difference If differences are more than 5M or 5 call Plansmith Compass automatically corrects Red Flags for this issue if you have checked Fix Small Maturity Imbalance in the DataBridge Settings The default is to adjust for a difference of 2 or less for accounts whose EOM balance exceeds 250M and 5 or less for accounts with balances less than or equal to 250M You can also define a custom Small Imbalance Threshold in Utilities DataBridge Settings This means that the total for repricings in the Repricing Tab within the stated Account Wizard repricing period does not match back to the last EOM balance The Fix Small Maturity Imbalance function may automatically plug this difference if checked This is an issue with the forecasted balance sheet This type of an account needs to have its balance reductions reflected ONLY in the form of maturities To have the balances go down faster than the scheduled payments adjust the scheduled maturities in the Maturity Tab or add a prepayment model Or you can automatically plug the Negative New Balances by selecting Don t Allow Negative New Bals in Maturing Accounts from the Utilities Options Chart of Accounts Tab For any other type of Red Flag please contact Plansmith Support Services at 1 800 323 3281 B2 4 6 Plansmith Corporation
116. Manual Manual Manual Manual Manual Manual dul 13 000 2 aU 2500 2 W100 13 80 0 ZD a a 0 0 0 Mar 13 000 2 446 2 00 2 000 0 13 94 0 0 0 mm i G m G a A G a G G a G E a i So o o coyco Sep 13 000 2 549 2o00 2 00 20 04 Oct 13 000 2 566 2 00 00 20 06 Nov 13 000 2503 2 500 2 000 0 20 08 Dec 13 000 2 610 2 2 00 0 20 100 ZD a a pam 114 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 After Edit Projections Budget Yanance Dept Yiew Hotes Branch 01 Branch U2 Branch 03 Branch U4 Admin Funds Manager Tota Manual Manual Manual Manual Manual Manual Manual Jul 13 000 2 409 2 aU 2 00 13 80 Aug 13 000 ede 2 UL z000 19 52 Sep 13 000 eas 2 aU 2 U0 13 84 Oct 13 000 260 2500 2 000 Mow 13 000 eat 2 500 z000 Dec 13 000 ocd 2 aU 2 000 2007 Jan 19 567 3633 3 f EF 3 013 Feb 13 563 3 606 ERLE 3 011 3U Mar 19 553 3 679 3 760 3 006 30 Apt 13 536 3701 3757 3 006 May 19 520 3724 3 754 3 003 Jun 19 503 3 746 3751 3 000 Jul 13 486 3 768 3747 2 998 Aug 13 470 3751 3744 2 955 30 30 0 Moy 19 415 3009 3 70 2 988 Dec 19 403 3 881 EREL 2 925 Soyo E aa G G a G G aa G aa G Eaa G G aa G G aa G Gaa G Gaa G Aaa G Aan G G aa G E aa G a G Eaa G A an In the Constant edit the Total column in 2007 was changed to 30 000 for each month The increase for each month will be distributed to each branch proportionate to each branch s percentage of the total before t
117. O04 O04 007 014 018 O22 O26 0 30 Money Market Accounts Money Market Accounts O10 021 056 073 0 90 1 21 1 41 1 61 1 68 One note of caution is that if you use the beta calculation and there is no rising or falling rate history there may be an artificial floor or ceiling applied to the account For example in the model below the product price does not decrease as the Driver decreases from segment B to A Remember that the beta formula examines only instances where the product rate rises when the index rises and when the product rate falls when the index falls For this account there is no data to calculate a falling beta so the rate stays the same Beta Dialog NOW Checking Seg Driver Spread Hate 0 00 0 00 0 00 Driver PRIME 30 yr Fixed 31 20 yr Fixed al A ooo 005 0 05 en ae B 495 490 005 c 10000 40000 ooo Spread HA 4 90 4 90 el Rising Beta NA 0 00 0 00 Falling Beta N 0 00 0 00 The Beta analysis covers the most recent 5 years of history plus the curent year Use the slider below to reduce the number of months used for the analysis Current Suggested Value Since the beta calculations are historical in nature they should not be applied without review They should serve as a guide to discuss what pricing behavior occurred in the past and if that same behavior should apply to the future The Rate Shock Yield report provides a detaile
118. PLANSMITH S COMPASS Version 8 350 USER S GUIDE reese oate s 30 15 2015 by Plansmith Corporation All Rights Reserved No part of this manual may be reproduced or distributed in any form or by any means except that copies may be made for the exclusive use of staff members of Financial Institutions currently licensed for this product by Plansmith Corporation Compass User s Guide Table of Contents Introduction ae ccccenseeceeneseececesnsseeceessnsseeceessussesserssuseeceenssuscaesensaesereenseeseensenseaseansenseeseenssaseaes 3 Getting Started Opening a Plan ooo ecccssesceseesseeseseesseesseeesseeseeeesseaseenesseaseenessuasesnensusseneeess 4 NaS UN eA E S 4 Navigation TOM Bar sareni ee EEE aE Ea 5 DataBridge Download HiStOry ooo cccccsssssceeeeeeeeeeeeusceseueeeueeneeuuusseueeeeeeeeeaausseeueeeeseeenauseeeueeesees 6 Update Financial Verify Financial Data oc cccssssesssessssesssneseseeseseeseseeseseeseseessneessnnevesneneaee 13 Rate Forecast Update Rate Forecast oo cccsssseessssseesesseeessseneessseeeesseeeesseeeessseeeessseneeessenenessees 14 Account Projections Review amp Revise Forecast ooo cccsesssssessssseeesesneeeessneesessneesessneeeeeseneeessas 17 Forecasting GOWN i crn ayuceiitainabaeteensweie daa tetris tubiesnenem seth ate niece a ai Aa 22 Pricing IGG ONS oso seciidet sracesuraueteaebesersdsizvsere dousaeuthadedespnosanesarstadeduecdevacshnentecsanasectnnetaiseniaie 27 PSV TU ro E shesed
119. PPENDIX A INCOME STATEMENT WITH RATIOS REPORT Note Report selection FTE Yes will adjust Federally Tax Exempt accounts income by multiplying by 1 51515 for Federal Nominal Tax Rates of 34 or 1 1 Nominal Tax Rate if different than 34 Accounts with TEFRA Account Properties will have their income adjusted according to the TEFRA adjustment setting present see Tax Calculations Average Assets Monthly Average for Month YTD Sum of Monthly Averages Number of Months Source Balance Sheet Report Average Balance Average Earning Assets Monthly Average for Month YTD Sum of Monthly Average Earning Assets Number of Months Earning Assets are defined as all asset accounts with Interest Income Source Balance Sheet Report Average Balance Average Paying Liabilities Monthly Average for Month YTD Sum of Monthly Average Paying Liabilities Number of Months Source Balance Sheet Report Average Balance Average Risk Based Capital Monthly Average for Month YTD Sum of Monthly Average Equity Net Unrealized AFS G L Goodwill Loan Loss Reserve up to 1 25 of Risk Weighted Assets Number of Months Source Balance Sheet Report Average Balance Average Required Capital Monthly Average for Month YTD Sum of Monthly Average Assets by Account Risk Based Capital factor for each Account Minimum Equity Ratio specified in Utilities Options General section Number of months Loan Loss Reserve is not in
120. Plan performs the calculations needed to reflect the impact of changes in historical data or projections on the financial statements You must Compute the Plan prior to viewing and printing reports Compute a Rate Shock allows you to calculate a shock impact on Net Interest Margin and Economic Value of Equity in a parallel rate change environment Compute a Non Parallel Rate Shock allows you to calculate a shock impact on Net Interest Margin and Economic Value of Equity in a non parallel rate change environment Reports gives you access to all reporting functions including Financial Variance Interest Rate Risk and Charts Report Designer allows the further customization of reports not already available in the preset report array by using drag and drop functionality Ratio Designer will assist you in creating custom ratios for use in reports or in creating KPIs Key Performance Indicators Consolidation process summarizes all listed plans into a single consolidated plan Executive Dashboard button will navigate those with subscriptions to our web based reporting system for senior management directly to the website Bankers GPS Plansmith s goal positioning system can be launched directly from here with subscription 5 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 p DATABRIDGE Compass provides several ways to load historical financial data as well as maturity and repricing information on the exis
121. Preview mode You may need to check for default page breaks in Properties 81 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 PRINT OPTIONS Access printer options by clicking on the Printer Icon or Drop down menu from the Compass tool bar when in any report displayed within the Reports Directory Please note that these printer options are not available through the Print Preview settings e Print Preview lets you view and change the layout and orientation of the report e File allows you to save the report in a file format suitable for import into other applications or web pages e Clipboard available for graphs is a quick way to capture a graph for insertion into a document or spreadsheet e Excel starts a wizard that quickly exports report data into a spreadsheet of your choice e Snapshot creates an electronic copy of the report or graph in a separate file that can be recalled by an entry automatically created in the Snapshots area of your report menu Snapshots may also be used in Scripts EA M General Print Preview Select Printer Printer C PrimoPDF File Ss xeorx 8860 PS on syri Clioboare Xerox 8862 PCL on Syri Excel pz Snapshot Status Ready Print to file Preferences Location Compass Comment Find Printer Page Range All C Selection C C Pag E Number of copies fi CHEREE Cancel PRIN
122. Sheet and Income Statement Corrections to these balances must be made in the Update Financial screen 11 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 IDENTIFYING PROBLEMS IN YOUR DOWNLOAD The DataBridgeDownloadErrors log identifies problems in the download in a 3 category layout DataBridgeDownloadErrors log Notepad File Edit Format Yiew Help GL Code 10114040 in Line 60 in the GL Extract File GenLedge dat is not in the Balance Sheet Correlation Table and cannot be downloaded Loan Code 14110112 F in Line 1 in the Loan Maturity File Loans dat is not in the Loan Maturity Correlation Table and cannot be downloaded Loan Code 14110712 F in Line 4 in the Loan Maturity File Loans dat is not in the Loan Maturity Correlation Table and cannot be downloaded Consolidated Plan has the following errors on the following accounts the total balance of maturity data is not equal to the last EOM GL Balance CD s 6 Mo lt 100 000 on the following accounts the Eom weighted yield differs from the Average monthly GL yield by more than the specified threshold of 0 1 US Agency MK Commer cial Float commer cial adj Residential Fix Residential Float Residential Adj CD s 2 Mo gt 100 000 CD s 18 Mo gt 100 000 e Missing Codes identified in the various extract files that are missing from the correlation tables DP DataBridgeDownloadErrors log Notepad SEE File Edit Form
123. T PREVIEW amp SMART PRINT Print Preview tools allow you to customize the orientation and margins of each report These settings like font and page break settings are maintained in the database for each individual report so that the time invested in set up is optimized Smart Print automates report set up and spacing A click on the check box next to Use Smart Print will turn the checkmark on or off Turn it off to customize a layout This is recommended anytime you change body or line description fonts You may wish to experiment with different combinations of font choices and sizes as well as margins to be able to produce single page reports Some fonts take more horizontal space than others even at the same point size Be careful to select margins that are supported by your printer Various printers have different minimum requirements for top bottom left and right margins If you plan to use a variety of printers you may want to be conservative in your minimum margin choices 82 Print Preview Page Properties Page Orientation Ls Portrait Margins inches Top Lett Right Interest Inca 1 00 Cash amp Due 1 00 es Interest Be Bottom Fed Funds Solr Fed Funds ae Securities imeen U S Gov t Header Footer US Treasu C Left Left aay Right Right U S Agencie i Cener f Center US Agenci I O s W Use Smart Print ar
124. The Earnings Change is displayed as changes between the zero point No rate change and each respective rate shock increment A 13 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Rate Shock Sample 2 Year Rate Shock Income As of the end of December 2013 400 300 200 100 0 100 200 300 400 Interest Income Cash amp Due 1 725 090 1 725 090 1 725 090 1 725 090 2 475 306 10 828 416 19 167 669 27 514 568 35 660 269 Securities 14 244 860 14 244 860 14 642 620 16 341 510 16 363 900 17 942 550 19 396 460 20 880 790 22 322 040 Loans 96 805 220 97 957 460 101 985 100 106 096 900 110 451 900 118 768 600 127 061 300 135 592 400 144 042 200 Total Interest Income 112 775 175 113 927 400 118 353 019 123 165 508 129 291 231 147 559 510 165 625 397 183 987 778 202 225 359 Interest Expense Interest Bearing Deposits 7 147 687 7 151 456 7 166 528 7 181 601 9 066 348 20 161 470 25 703 960 29 584 590 33 929 700 Borrowed Funds 207 346 207 346 207 346 207 346 422 568 1 136 708 1 571 953 2 135 376 2 698 800 Total Interest Expense 7 435 033 7 438 802 7 453 874 7 468 947 9 488 915 21 298 176 27 275 913 31 719 969 36 628 499 Net Interest Income 105 340 142 106 488 599 110 899 145 115 696 560 119 802 317 126 261 334 138 349 485 152 267 809 165 596 860 Earnings Change 14 462 175 13 313 718 8 903 172 4 105 756 0 6 459 017 18 547 168 32 465 492 45 794 543 Percentage Change 12 07 11 11 7 43 3 43 0 00 5 39 15 48 27 10 38 23 To cal
125. Tolerance answers the question of how much risk an institution can afford to take Dynamic gap prolonged and future rate shock are also available to document action plans Communicating Effective reports go beyond merely producing data to provide information give focus stimulate discussion and develop action plans Compass reports are designed to make YOU look good You will have control over formats that allow just the right amount of detail appropriate for your audience Comparisons between your budget actual results historical performance and even your peers performance will help you identify opportunities Accuracy and appearance are both important Compass identifies questionable data at every step in the process All report totals and ratios are automatic Our goal is to provide error checking using our unique red flags so that input mistakes and just plain bad data don t make it into print And finally Compass is backed up by true model validation Client Support Services A team of proven professionals is standing by to help you with your questions dilemmas and strategy techniques We are available each business day from 8 30 AM to 5 00 PM CST either by Phone 1 800 323 3281 Fax 1 847 705 8200 Email support plansmith com or you may visit our Website www plansmith com 24 7 for tips tutorials and webinar training sessions Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 GETTING STARTED When y
126. Y Mortgage Backed Securities Dec 51 3 12 51 3 12 0 0 00 0 MES 2014 Jan Oo 0 00 0 0 00 0 0 00 0 A a Municipal Securities Feb 104 1 25 104 1 25 0 00 Bb he Municipals Mar 0 00 0 0 00 0 0 00 0 oe 4 Marketable Securities Apr 103 1 70 103 1 70 0 0 00 0 Et a Other Secunties May oO 0 00 0 0 00 0 00 Oio he Money Market Acct Jun 104 1 44 104 1 44 0 0 00 0 a a E Investment CDAR s dul 0 0 00 0 0 00 0 0 00 0 5j Corporate Securities Aug I 0 00 0 0 00 0 0 00 0 Po bee ja Corporate Bonds Sep 0 00 0 00 0 0 00 0 E a Gross Unrealized AFS G L Oct 0 00 0 00 0 0 00 0 op oo h E Unreal Gains Losses Nov ae 1 69 96 1 69 0 0 00 0 E H E Loans Dec oO 0 00 0 0 00 0 0 00 0 Click the Maturity Tab Change the last number in the Scheduled Maturities column to eliminate a small difference If differences are more than 5M or 5 call Plansmith Compass automatically corrects Red Flags for this issue if you have checked Fix Small Maturity Imbalance in the DataBridge Settings The default is to adjust for a difference of 2 or less for accounts whose EOM balance exceeds 250M and 5 or less for accounts with balances less than or equal to 250M You can also define a custom Small Imbalance Threshold in Utilities DataBridge Settings This means that the total for repricings in the Repricing Tab within the stated Account Wizard repricing period does not match back to the last EOM balance The Fix Small Maturity Imbalance func
127. a system Copy these files to the same folder as your plan data Click the DataBridge Data Bridge button or select Update then DataBridge from the pull down menu Update Financial Download For 1 Make sure the time period is set to the appropriate month and year Compass will automatically set itself to download into the first month of ana projected data Verify that the month is correct You may click on the down arrow next to the month and select an alternate month if necessary Perform Download 2 Click the Perform Download button Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 3 Upon completion of the download a DataBridgeDownloadErrors log will be opened in Notepad This log reflects any errors that occurred during the download The most common error will be new application code combinations that have not been mapped to DataBridge To map these new application codes see the Adding New Code section that follows When you make corrections you will need to rerun the download to capture these changes 4 Check to see that the balance sheet is in balance and that Reminder pretax income agrees with totals for the month by following the Data Verification section After making any i Monthly Update complete Please Compute the Plan data corrections directly in the Update Financial screen you will save the data and be prompted to Compute the Plan 5 Compute the Plan before viewing projections
128. an account is edited Allow Pre Payment of New Maturities Optionality can be modeled for simulation purposes on both the existing portfolio as well as for any new volumes in your plan Compass will calculate the projected amount of prepayments based upon the new volumes that you project on your Compass account The prepayment rate will be based on the existing prepayment speeds 128 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 modeled on that account The volume of prepayments is stored in the New Prepayments column on the Maturity Tab in the Account Projections screen Reinvest Net Income The Financial Compass model calculates and plugs the balance sheet to Fed Funds in your projections automatically upon computing the plan During the compute process it is likely that there will be a change to earnings which is plugged to Current Earnings YTD Net Income in Equity The final balancing plug after the earnings adjustment will be to non interest bearing Cash or Cash Balancing in SBUs The Reinvest Net Income option will plug the earnings change to Fed Funds and the Cash account will retain the balance forecast you ve entered In an SBU the Cash Balancing account in the Funds Manager will not need clearing each month If you wish to have income changes posted to Cash then leave this option unchecked Auto compute Base Yield When manually editing Scheduled Maturity data the weighted yield XRate may end up being r
129. ance Balance Balance Sep 0 Dividends Projections Projections Budget Variance Fed Selene Balance The Dividend Payout at left results from the Manual payout option of 500 000 per quarter starting in January At year end the cumulative balance of Dividends paid in the year will be moved to Undivided Profits This plan has a cumulative Dividend of 2 000 000 for 2007 that is moved to Undivided Profits in January of 2008 The net amount of New Balances in January 2008 shows as 1 500 000 because a 500 000 payout has occurred in that month 130 Dec 2 000 0 2 00 2003 Jan 1 500 1 250 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Reports Reports can be printed that will show ALL accounts even PETT fx those without balances or income by checking the g y amp i General Chart of Accounts Dividends Reports Include empty line items box Branch Assumption files ou Models Last Files List Fonts Date Formats and Rate Shock Policy Limit settings only apply to Risk Compass clients Print Assumptions for this Plan should Include empty line items v Print Assumptions for this Plan be selected if you have a SBU or Consolidation and want 7 12 Month Gap Min ggg Ma rag to print reports for ALL of your plans The Policy Limit Parallel Rate Shock Increment NII Limit MYE Limit settings for Gap and Rate Shock will allow the dynamic Lower ao a gn selecti
130. and Rates i Year M Ramped Income Shock T Reporting Options Compute To run the calculations for the scenarios click on the Rate Name Current Spread Result Automate SOyCMT 0 am 299 SOdayBA ooo ooo ooo Utility ooo ooo ooo S bs s s s bs e bs sls Ls Compute button If you perform this compute on a branch model SBU or Consolidation the calculation will take longer as it is performed on all units just like the Parallel Rate Shock The right hand side of the screen displays the Treasury Curve rates Blue for the scenario selected along with other Driver Rates Red and Orange currently in the model The rate indices in red are default Driver Rates from the Rate Forecast In each scenario a model is used to establish values for these rates based on the values of the Treasury Curve rates For example if our multiple linear regression analysis determines that a correlation exists between the 3 mo Libor and the 3 or 6 Month TBill then we can model what the Libor rate should be if the TBill rate changes within a scenario The multiple linear regression analysis and model are key components of the Non Parallel Rate Shock Module The module analyzes 20 years of rate history to develop the correlations that will in turn be applied to each rate scenario Thus in a scenario in which the short term Treasury rates rise as shown at left other short term rates like the 1 mo LIBOR will also
131. and the old is portioned out to each branch depending on the balance percentage of the total prior to the edit In January 2007 the net change is 645 000 which is distributed to each branch The percentage of the total balances in Branch 01 prior to the edit was 19 94 so it received a reduction of 129 000 which is 19 94 of 645 000 DISTRIBUTE AS OFFSET This edit divides the value by the number of cells highlighted and portions that amount equally to each cell Example of Distribute as offset After Edit Funds Quick Edit Branch 0T Branch 02 Branch 03 Branch U4 Admin Manager Total anaes Dec 4 083 380 740 3 687 2055 Cancel SS f Ramp to a value 2007 Jan 4 203 405 tf 2b 9 064 2 478 gt irl Kena eel Me Feb 4319 415 7056 3 085 31 674 C Aggregating Offset Wlar 4 352 425 Yee 910 21 87 436 l Co m A Ga G G mo Z C Distribute replace existing Apr 4 aar 4 121 9 032 fe Distribute as offset hay A Aaa FETS 0 BF 9 054 Distribute 10000 Jun 4 458 458 0 392 ode Jul 4 455 469 6 531 6 899 22 39 Aug 4 533 6 675 6 568 22 257 401 Last Calculation Results Sep 4570 493 3916 g 569 22 447 es Oct 4 506 o05 Odo aor yerage Trend Now 4543 al 9 104 B oFo Dec 4 651 S30 3 251 0 919 m G g g a g gaa G ga pcos ga G a _ The amount divided amongst the cells is a total of 10 000 000 10 000 000 divided by 12 equals an increase of 833 333 to the total balance in each month Again the total increase of
132. ange point For example at 100 bp change the Market Value of Equity decreases to 184 425 from which we subtract the zero point value of 195 878 to get 11 453 The Change in MV of Equity relates the change in Market Value of Equity to the Zero Point in percentage form The Mark to Market Capital Ratio relates the change in Market Value of Equity to the Market Value of the Total Assets At 100 bp it is 184 425 2 140 929 8 61 Duration of Equity months is a volatility measure It is useful to describe the percentage change in rates This bank has a Duration of Equity of 70 16 months Divide 70 16 by twelve to get years and the duration in years is 5 84 This is equal to the percentage change in value at 100BPS on the rate shock The Ramped Shock option does not apply to the Market Value calculation The Market Value shock is immediate and sustained As with the income shock we are only concerned about the adverse impact of rate changes A 19 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Subtotaling for Yields and Costs Account Income or Expense Rate Shock Income report Average Balance Subtotal and Totals Sum of Incomes Rate Shock Income report Sum of Average Balances Interest Spread Interest Income Earning Assets Interest Expense Paying Liabilities Net Interest Income Net Interest Income Rate Shock Income report Earnings Assets e Note The Avera
133. ansmith Corporation Simplifying Complexity Last Updated 1 30 2015 This relationship is critical to understanding the modeling function One of the goals of the model is to ensure that all actions are mathematically correct and consistent with real world events When a planner expresses an action the model must carry that action throughout the Projections Under this methodology it is possible for the planner to express a balance that forces a negative new balance ina future month This may be acceptable for non maturing balances such as Fed Funds or Savings accounts However for maturing balance categories such as loans this is clearly an inaccurate expression since it indicates that the decline in balances from month to month is greater than the Scheduled Maturities Some systems simply set the new balances to zero Compass leaves the negative new balance condition and sets up a Red Flag to alert the user This gives the planner the option to consider the appropriate action Setting a new balance to zero may produce results contrary to the planner s ideas for future growth The only way that EOM Balances can decline faster than Scheduled Maturities is for customers to prepay or redeem early This possibility should be reflected in a prepayment model Sometimes an EOM Balance decline can be forecasted because of a specific event like a major loan refinance that is difficult to express ina prepayment model In that case the best approach is
134. antially Callable Bond Models 57 Alternate Discount amp Decay Rates 58 74 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Setting Report Policy Guidelines In order for policy guidelines to appear on the Risk Compass report you ll need to enter them in Utilities Options Reports By default all settings will be checked For the Gap section enter a range for the RSA RSL ratio The guideline will appear as below and will alert you if you are outside of the Gap parameters The Bank exceeds its risk guideline of between 0 95 and 1 30 RSA RSL for the Gap Analysis For the Rate Shock you may set guidelines for NIM and MVE EVE which will be included in the report as below The Bank is within its risk guideline of 12 change in Net Interest Margin at 300 BP rate change The Bank is within its Market Value of Equity guideline of 25 at 300 BP rate change The limit will be measured at the rate shock increment specified The shock increment is displayed in the report as below Parallel Rate Shock Market Value of Equity Rates Dn Zero Rates Up Change 300 bp Point 300 bp Change Asset MV 0 92 278 623 276 082 270 660 1 96 Liability MV 1 12 248 646 245 902 235 913 4 06 MV Equity 0 67 i 13 MV Equity Ratio 10 76 10 93 12 84 Duration of Equity is 70 months or 5 85 The Bank is within its Market Value of Equity guideline of 25 at 300 BP rate change The results for the No
135. ase call Plansmith Support Services at 1 800 323 3281 Branch Comparison Reports Your SBU or Consolidation contains a unique set of reports called Branch Comparison reports These analyses can assist with breaking down branch contributions to the total bank as well as various business entities within a consolidation The analyses include a comparison of loan and deposit data as well as an income statement comparison Fly Branch Comparison a Deposit Comparison T Income Comparison Loan Comparison Please refer to the end of the SBU section for more information on this feature 101 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 CONSOLIDATION THE STRATEGIC BUSINESS UNIT PLANNING MODEL The Strategic Business Unit SBU was developed to detail branch or department planning in order to achieve accountability and measure profitability Profitability by branch or department can be measured to give management direction on goal setting Financial Compass Consolidation i tt File Update Rates Projections Compute Reporting Utilities a Chl eo he Of f fii amp Strategic Business Unit Business Unit Settings Funds Manager Plan is setto Unds Manager Total Bank Branch 1 Branch 2 Branch 3 Funds Manager The Strategic Business Unit module in Compass is set up to consolidate branches or business units If you are set up as an SBU the consolidation screen will display as below
136. asically looks at the slope between adjacent rates If a single point is adjacent to both a positive and a negative slope then it measures their differences and if the differences are too great it marks it as unlikely Special cases are used for the first and last rates on the curve 3 The third test is much more complex We use a utility called the RateHistoryAnalyzer that measures a collection of ten heuristics based off of historical data over the past 20 years The utility then measures how many actual rate environments fall within two standard deviations of the mean on each heuristic Each time a rate environment is within the margins it is given a point The point scores are then evaluated and any rate environment that falls within two standard deviations of the mean points is rated likely The remainders approximately 5 of all rate environments over the last 20 years are marked as unlikely These measurements are repeated taking into account whether the rate environment was for a 1 2 3 4 or 5 year rate shock These heuristics are then downloaded each month into Financial Compass and each Yield Shock scenario is evaluated against the appropriate set of heuristics What the detail above means is that Plansmith s evaluation of interest rate scenarios is substantiated using 20 years of interest rate history User defined scenarios also are subjected to this analysis as well Please keep in mind that a scenario may change between lik
137. at Yiew Help GL Code 10114040 in Line 60 in the GL Extract File GenLedge dat is not in the Balance Sheet Correlation Table and cannot be downloaded Loan Code 14110112 F in Line 1 in the Loan Maturity File Loans dat is not in the Loan Maturity Correlation Table and cannot be downloaded Loan Code 14110712 F in Line 4 in the Loan Maturity File Loans dat is not in the Loan Maturity Correlation Table and cannot be downloaded e Total Balance of Maturity is not equal to last EOM GL Balance reflects errors that are generally rectified during the compute process Otherwise a Red Flag will display next to the account in the Account Projections screen to alert you that additional action is needed PD DataBridgeDownloadErrors log Notepad File Edit Format Yiew Help on the following accounts the total balance of maturity data is not equal to the Tast EOM GL Balance commercial Float Caommercial Adj J CD s 1 Mo gt 100 000 CD s 6 Mo gt 100 000 CD s 18 mo gt 100 000 cbD s 6 Mo lt 100 000 e EOM weighted yield differs from AVG monthly GL yield displays yield differences in excess of the Threshold you set in Utilities DataBridge Settings DP DataBridgeDownloadErrors log Notepad SEE File Edit Format Yiew Help on the following accounts the Eom weighted yield differs from the Average Monthly GL yield by more than the specified threshold of 0 1 Account EOM Weighted yield Avg Monthly GL Yield
138. ate Y symbol to the left of many of the reports These lines contain a default report format that can be modified to your specific needs Once modified and saved as a custom report format identified with the symbol you will be able to view the latest computed data in the exact format you have chosen Directory _ Reports Chart of Accounts Chart of Accounts 4 Custom Reports Financial Reports Balance Shee Capital Adequacy Income Statement Rate Fisk Account Market Yalue Dura Dynamic GAP Summary Gap Rate Shock Duration Rate Shack Income Rate Shock Market Value Rate Shock Regulatory Rate Shock Yield Fisk Tolerance Summary Market Value Dura Rate Reports Driver Rates Offering Rates fields and Costs Report properties allow you lt Balance Sheet Fi Sample Bank Balance Sheet Average Balance t000 s an Feb Mar Apr Hay Jun Jul 20u mang 2008 2008 2008 2008 2008 Assets Cash amp Due 4 835 14 4 bb Fed Funds Sold 11 83 INSTANT GRAPHS gt 14 128 iti F A 7 A 2 PEEONUES AE Simply double click on any line item oSA Loans ron EY 3 203 120 I PE 1 35f individual account subtotal or 1 805 Fixed Assets 10 83 total 13838 Investment Loss Reserwe 0 ac Get a Pie Chart by double clicking OREO L78o 0 i ve th in ry in Other Assets 4 07 A e 8 caisson j 4 394 Total Assets 360 983 COlumn 14 383 652 to modify many aspects of the template Some properties are specific t
139. ating 18 of the 22 preset Drivers automatically with a subscription A monthly Rate Update projects interest rates in the three scenarios as follows Plan Rates no change in rates from last month s average rate High Rates ramped increase of 1 per year for two years per year thereafter Low Rates ramped decrease of 1 per year for two years per year thereafter Plansmith also provides an optional automated download of a rate forecast from Blue Chip Financial Forecasts Blue Chip surveys 50 of the country s top economic forecasting firms each month The average of these 50 is projected in the Plan Rate scenario the ten highest for each rate forms the High scenario the ten lowest forms the Low Your Blue Chip subscription also includes a monthly newsletter containing commentary and the individual forecasts of each of the 50 participants There is no more credible source for rate projections than this distinguished group The automated rate updates are available after the first Monday of each month Simply click on the AutoUpdate button within the Rate Forecast screen if the indicator states thatyour rates are not current The prompt This will update your historical rates Do you want to update your rate forecast means your projected rates will change You will need to select No if you have a forecast that you do not want changed Otherwise select Yes The update takes about 5 seconds and the indicator wil
140. aturity data from your download file as well as the calculated prepayments and prepayment models Repricing Tab Displays the actual and simulated repricing information including volumes and new rates This tab only appears if the account is set up to have repricing such as ARM loans Variance Tab Compares the actual and projected balances and interest of a specific account or category against the data stored in your locked budget Callable Tab Tracks callable securities and borrowings by CUSIP Notes Tab Make notes here to explain account projections for later reference Commercial Fixed Projections Projections Bubget maj ent tier Wama Jul FORECASTING APPLYING MANUAL EDITS AND GROWTH MODELS TO EOM BALANCES EOM New Balance Offering Balance Rate 27 114 Aug 25 966 Sep 10 618 Oct Nov Dec 008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 11 862 10 683 10 965 10 965 138 6 66 10 965 157 7 66 10 965 591 7 66 10 965 184 7 66 10 965 195 7 66 10 965 222 7 71 10 965 356 adi 10 965 196 7 63 10 965 575 7 92 10 965 306 8 01 10 965 270 8 11 10 965 351 8 20 Total Maturities 138 157 591 184 195 222 356 196 575 306 270 351 aturity Variance Fed Funds Total Maturities xrate EOM eld 8 63 8 98 8 35 8 64 8 64 8 73 8 75 8 59 9 83 8 45 8 60 9 07 Interest 176 292 190 492 83 492 80 181 82 672 81 283 82 434 76 939 81 970 79 055 81 497 78
141. available here as well In the example below we have selected the Total Loans by clicking on it and then pressing the right mouse button to view the options menu at this point The options include L 2 Selected Category places the category name only in the description line Selected Category w Total places the name and the data into the report Subcategories places the name of each subcategory below the highlighted category vertically into the report not the data Accounts places all the accounts below the category with their data into the report Subcategories and Accounts places all the subcategory folders with individual account data into the report designer Each operation is executed as it is selected so the values appear immediately 86 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Note that the Data Type selected above remains the default for each line until the user changes it Therefore if you want to mix data types for your reports you must change the data type before placing the data into the Report Designer You will see the applicable data type AvgBal TarBal Yid etc in the column to the right of the account Description It is only used at design time and will not be printed At the top of the Designer you will find in addition to the data type other options to make your report more meaningful Report Default Data Types Time Selection Fonts Change New R
142. ax loss carry forward Rate as shown at right or enter an Other adjustments State Amount for the entire year To enter an ther adjustments Federal amount click on the down arrow next Should state taxes be distributed according to net pre tax income to Rate and make your selection Should federal taxes be distributed according to net pre tax income Allow for the calculation of negative state taxes Edit Budget T axes Taxes calculate differently than most other Compass accounts During the Plan Compute taxes are determined for the entire year and then are allocated to each month in the year either based upon net pre tax income or ona Straight line basis Each account s tax preference is also uniquely considered in the tax calculation based upon the tax setting established in the account setup see Account Wizard Compass allows the user to specify the exact tax treatment for each account such as Fed Exempt State amp Fed Exempt 20 TEFRA etc To see each account s tax preferences print out the Chart of Accounts report Other tax preferences and adjustments such as Loss Carry Forward and Development Bank credits can and must be taken into consideration in tax calculation Ask your Tax Advisor to help you set up your tax information initially After some experience you will find that Compass projects taxes very precisely DO NOT select Edit Budget Taxes as the budget data will be stored from your projections after locking the budge
143. ay Rates 77 Diagnostics Button 19 Distribution Tables 9 Dividends 130 Driver Model 32 Driver Rates 14 32 E Ensuring Rate Shock Accuracy 76 Executive Dashboard 120 Externally Generated Rate Shock Values 62 F Floating Rate Loans with Floors and Ceilings 31 Forecasting with Trend Data 23 G Growth Model 22 Manual Mode 26 New Model Mode 27 Quick Model Mode 26 H Help Menu 133 Income Expense Accounts 52 Annual Growth Rate 53 Fee Model 52 New Month from Previous Month 53 Interest Rate Risk 60 Investment Maturity file 49 K KPI Policy Editor 126 Lock Budget 124 Loan Loss Reserve Provison Model 55 M Market Value 62 Maturity Tab 22 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 N Navigation Tool Bar 5 New Balances 22 Non Maturity Deposits 77 O Open Plan 5 Options Settings 128 General 128 Chart of Accounts 128 Dividends 130 Reports 131 Models 131 Last Files List 131 Fonts 132 Date Formats 132 Prepayments 42 Pricing Model 26 Beta Calcuations 35 Manual Mode 26 New Pricing Models 27 Quick Pricing Models 26 Time Lag 28 Promotional Pricing 29 Print Options 82 Put Call Module 49 Quick Chart 84 Quick Edit Options 24 Aggregating Offset Annual Growth Rates Constant Distribute as offset Distribute replacing existing Offset Ramp from to a Value Ramp to a Value Rate Forecast 14 Rate Shock 60 65 Parallel 60
144. b plan files residing in the folder you MUST enter the consolidation screen right click on each plan box click on Properties and make sure the name is corrected there for each plan To open a bank plan either double click on the plan box you wish to open or right click and select Open Plan After exiting the individual plan you will return to this screen _ Financial Compas Consoldo or TT ee TTT ee E File Update Rates Projections Compute Reporting Utilities Help en pp ay ay a ae Consolidation Consolidation Settings Pricing and Prepayment Models C Retain C Copy None Copy Pricing and Prepayment None Models from Eliminations Plan is set to Eliminations gt When navigating between plans you may receive the following prompt Tompass i x gt Your Driver Rates may have been Updated through another plan Should this plan be updated with these Mew Driver Rates Yes No Remember that each plan refers to the RateWorks mdb file for its rate forecast In most cases there will only be one RateWorks mdb file shared by multiple plans Every time you open a new plan Compass wants to know if you wish to refresh the rate forecast for that plan We suggest you select Yes every time you are prompted with this message 96 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 A consolidation is a sum of its parts The projections will reflect the total o
145. balances the chart will appear as bar charts 84 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 REPORT DESIGNER While Compass provides a complete set of reports that are customizable with respect to level of summarization and time period some users would like to build reports to express other analyses and relationships The Report Designer allows you to select account and ratio data from Compass vast database and place it ona spreadsheet type layout perform some basic calculations and save it to the report menu Select the Report Designer button in the icon bar and you will be presented with the design screen At the top of the screen just below the Button Bar is where you specify the new report name the data type time periods and other important data modifiers Report Default Data Types Time Selection Fonts Change New Report Accounts EOM Balance h This Tear By Month Body Save Save As Summary ltems Custom Ratios Actual F Include Totals Averages Arial 9 Below this section is the design area The basic elements include the account list on the left side of the page the design area with description column and time periods on the right Just above the design area is the header information used to describe the report Not only does the account list on the left include all the balance sheet and income statement data for your reports bu
146. below this is October Fed Funds 3moTbil Gmolbll 1w CMT 2w CHT seCMT Sw CMT 10y CMT soy CHT Sep Oct 0 15 E 0 26 0 48 Now 0 19 0 15 0 19 0 26 0 45 0 74 1 4 2 65 arr Dec 0 19 0 15 0 19 0 26 0 48 0 74 1 4 2 65 af e Rate Forecast data can be downloaded automatically by selecting the AutoUpdate button in the Rate Forecast screen r i Select the Non Parallel Rate Shock FinComp O m El option and you will be prompted to load the pre constructed yield scenarios from Do you wish to update default yield scenarios and projection formulas the Plansmith website We suggest you always select Yes DO NOT select Yes if you are accessing an archived database where you want No to retain the original rates f j Status bar item Filename Bank name Fist National Bank This prompt can be turned off if desired by selecting _ _ l Utilities Options and General Tab We suggest you Hin Equity Ratio E an OP set the option to Always prompt first Do not Yield Scenario Updates Always prompt first prompt first will automatically pull in the latest rates Always prompt first no matter which database you open and Never Auto Plan Backup Do not prompt first auto update will not pull in any rates Never auto update The rate scenarios downloaded will include three likely scenarios supplied by the Blue Chip Financial Forecasts along with other likely and unlikely scenarios Stress scenarios will
147. ce cmpDataValue SF After removing the sign drag down the highlighted frame to encompass the other cells you wish to populate as in this example with the EOM Balance Mi 7 a 00002 C dat 14 a 00103 L5 c aacd 16 a 00102 7 c aace 8 a 00219 20 21 22 c aacf a 00250 c aacg a 00311 d 1002 EOM Balance Cash amp Due Cash and Due From Banks Fed Funds Sold 5131 855469 Fed Funds Sold 3096 379395 Securities U 5 Gov t US Treasuries U 5 Agencies US Agencies Mortgage Backed Sec CMO s MBS Municipal Sec Municipals Stock FHLB Stack Other Securities Corporate Bonds Trading Trading Securities C 9 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Polishing the Report To create a report without the codes use Excel s Hide function Highlight the column or row right click and select Hide The column or row will minimize and not appear on the report ET wT E Cut a Copy A Paste Paste Special Insert Delete Clear Contents Format Cells Column Width pide Unhide lortgagze Backed set CMO s MBS Municipal Sec Municipals Stock FHLB Stock Other Securities Corporate Bonds Trading Trading Securities Gross Unrealized AFS G L Unreal Gains Losses F d 1002 G EOM Balance 4292 183594 4291 428711 5131 855469 3696 379395 56871 13281 1998 2058 77124 36885 27734 33653 38281 1320
148. ce totals 3 3month E months A common misconception is that these ire ladeiee panier A 6 amp months 12 months balances should be reflected on the Gap Page beskate nS Acai oa P 5 12 months 24 months report as non rate sensitive This is incorrect Page break after RS Liabilities 6 7 8 g Show Loans at Limits as Fixed 33 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Step Model Savings Rate would change only when Prime hits 6 10 and 20 Seg Driver Rate Spread Savings Rate A ood 1 00 1 00 i B 599 100 49 4 6 00 150 4 50 Se 3 DJ 999 150 845 DE 2 E 10 00 3200 7o00 14 a 1999 3 00 16 99 Bauer G 20 00 4 00 16 00 Steps are established by subtracting one basis point 1 100 of 1 from the Driver Rate at the point of each change entering that amount in the table and entering the Rate switch Edit selection as the same amount as the next lower change point This method keeps the model from sloping between the change points You may build as many as 25 steps but if you enter a large number of small steps the results may not be significantly different than a simple single slope model Keeping your pricing models accurate will require periodic review Time spent in building good models will lessen the frequency of revisions and produce better results as rates change Pricing model accuracy is especially important for rate shock analysis because of the wide range of possible ra
149. ch period then reported monthly or if other than monthly is summed until payment period indicated b For 6 five year time periods after 60 months interest period s total maturity period s exit rate 5 Total cash flow total maturity interest payment DISCOUNT RATE The account s offering rate rate on new balances for the first month following rate shock date See Offering Rate column or Rate on New Balances report DISCOUNT PERIOD number of months from beginning of calculation 12 DISCOUNT FACTOR 1 1 discount rate 12 100 4 Period Note Must have scientific calculator a present value table or use a computer to complete this calculation DISCOUNTED CASH FLOW total cash flow discount factor MARKET VALUE sum of the discounted cash flows DURATION sum of each discounted cash flow discount Period 12 market value Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Rate shock income analysis can be performed over a 12 60 month time period This means that those maturities and repricing balances that occur within the selected time horizon will be considered in the calculations of yield and cost The market value component however requires the full maturity schedule for the collection of all cash flows principal and interest until final repayment Without the complete maturity schedule the market value will be computed incorrectly and the bank s mark
150. cing Rate must be November Rate loo modeled with the appropriate floors and ceilings For example you have Teese U Months a Commercial Real Estate Adjustable portfolio that is normally priced at Current Price 6 50 Prime minus 1OOBPS a floor of 6 50 and a ceiling of 22 The Offering Cale and Repricing Rate models can easily be set up with these parameters Edit Spread Spread Factor Comml RE Adj Offer Seg Driver Spread Rate 0 00 0 00 0 00 35 650 650 a 100 2200 15 i 00 22 00 10 5 0 0 10 20 eit Driver Rate Show Loans at Limits as Fixed A ab 2 24 months J months bi because the Gap analysis reflects repricing FTE Adjusted risk and any principal balances received are subject to repricing With this option gt gt set to Yes and a loan portfolio at a floor or ceiling the balances on the report will appear the same as a fixed rate loan product Header Cancel Save As Save Preview would 36 months 48 months Include Non Rate Accounts Ao monike 59 months gt 59 months If you have floating rate loan products that Report Properties Gap have floors or ceilings you may want to show BS Y y Level of Detail Intermediate 1 Through the end these balances on your Gap report as fixed Ho of s a Data Type Static Gap hooo This will happen if the entire portfolio is at 1 bd a Reporting Period the stated floor or ceiling ra 3 months nei
151. ck Modeled Feb fff U4 EOM ield 26r 180 Wlar Poles e440 Apr fie 1 155 4 50 962 4 57 290 779 If the box says Manual you will need to enter the rate in each month of your projections Better yet give us a call and we ll help you build a model F Finish making necessary changes in the Account Projections G When all changes are complete repeat Step 5 and 6 Exit and Save your changes when complete B 6 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 MONTHLY UPDATE PROCEDURE FOR CONSOLIDATIONS 1 Make sure that the latest extract files from your data processor have been copied to the same folder where your plan mdb files are located after you have made a back up This path is 2 If you have an SBU that is part of the consolidation you must update the SBU first Perform the download A Open Compass by clicking on the Compass icon on your desktop B Select the Total Consolidated plan path from the Select a Plan File window and click Open Your plan is called fe C Click the DataBridge button D Verify that the Month and Year are correct E Click on the Perform Download button The DataBridge will load information to each of the subsidiary plans automatically NOTE If at any point in the DataBridge process you wish to close Compass and start over Compass will automatically save your work You may reopen your Total Bank plan and rerun the DataBridge as many times as
152. click on the line items you wish to compare and selecting Mark Unmark row for charting After you have selected your items they will appear shaded Next right click and select Build the chart Commercial Insert Page Break Real Estate Commercial Commercial RE Remove All Fage Breaks Residential Mark Unmark row For charting Clear marked rows Res 1st hit AF Cae Tethdte SORA Ed IG 7 Adjusting the Forecast The following steps should be performed by someone who is familiar with the bank s projected growth plans and current loan and deposit rates A Reports showing Balance Sheet and Income Statements should be reviewed for possible revisions to projected volumes Revise projections as needed B 5 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B B Make revisions by clicking Account Projections button C Select major accounts and adjust projected growth if necessary D The Offering Rates Report should be reviewed to verify that prices for next month are close to the bank s current rates for new loans and deposits E Corrections are made by selecting the account from your Chart of Accounts list Click on the Modeled or Quick button in the Offering Rate column and make your adjustments Projections Budget Maturity Repricing Yarance Fed Funds Total EUM Heyy Offering Total Maturities Balance Balance Aate Maturities rate Interest 2m4 Qui
153. cluded Source Balance Sheet Report Average Balance Capital Adequacy Report for Risk Based Capital factors Average Equity Monthly Average for Month YTD SUM of Monthly Average Total Capital Number of Months Source Balance Sheet Report Average Balance Return on Average Assets Annualized Interest Income including Loan Fees Annualized Interest Expense Annualized Other Income Annualized Operating Expense Annualized Total Taxes Average Assets 10 Return on Average Equity Annualized Interest Income including Loan Fees Annualized Interest Expense Annualized Other Income Annualized Operating Expense Annualized Total Taxes Average Equity Average Capital Notes 10 Break Even Yield Annualized Operating Expense Annualized Interest Expense Annualized Other Income Annualized Loan Fees Annualized Average Earning Assets 10 A 11 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Net Overhead Annualized Operating Expense excluding Loan Loss Provision Annualized Other Income excluding Loan Fees Average Assets 10 Interest Income Loan Fees Earning Assets Annualized Interest Income including Loan Fees Average Earning Assets 10 Interest Income Earning Assets Annualized Interest Income excluding Loan Fees Average Earning Assets 10 Interest Expense Earning Assets Annualized Interest Expense Earning Ass
154. ct COFI 5 00 4 50 ao ee 6 mo LIBOR 300 3 mo LIBOR zT 2 50 90 day CD 2 00 1 mo LIBOR 1 50 30 day CP Ue 30 yr Fixed 000 en BE PRIME Jan 2007 Jun 2011 39 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 If the product rate and index both did not change then the index would not even appear on the correlation list Correlations cannot be calculated if rates did not change Pricing Model Hodel Selection f Manual f Quick Model f New Model G NOW Beta Driver 11th District COFI July Rate Time Lag Current Price 0 1 36 Months O14 4 Cancel Save Save As Chart Calc E dit Spread Factor Beta Create 4 Promotion Seg Driver Spread Rate 0 00 0 00 0 00 0 00 0 04 0 04 1 36 1 22 0 14 100 00 935 91 4 09 Spread T dd Insert Delete Clear Current Suggested Driver 11th District COFI 11th District COFI Pivot 1 36 1 36 Spread 1 22 1 22 Rising Beta 0 04 0 04 Falling Beta 0 07 O 0 After application the Current model information has changed When the current 11 District COFI rate of 1 36 is used with the spread of 1 22 the product rate is calculated at 14 BP Segment B The falling rate beta indicates how much the product rate will decrease as rates fall by 100 BP In this instance as the Driver rate decreases from 1 36 to 36 the product rate would decrease to 07 not automatically displaye
155. culate the Earnings Change the Net Interest Income at that the zero point is subtracted from the Net Interest Income at that rate shock point In the example above the Net Interest Income at the zero point is 119 802 317 and the Income at 100 bp is 115 696 560 thus giving an Earnings Change of negative 4 105 756 The Percentage Change is derived from the Earnings Change If you have selected the Ramped Shock calculation method the full shock increment will be reached at the end of twelve months For example the shock of 100 bp is only a change of 9 0909 bps the second month 18 1818 bps the third and so on If the box remains unchecked then the full shock is realized starting in the first projected month Please note that the zero point or no change in rates is calculated from the current market rate on each account or the rate that appears on the Offering Rates report for the first projected month Your concern is for the adverse impact of interest rate changes or a negative Earnings Change A 14 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A If your institution has significant rate sensitive other income and or operating expenses you may be asked to measure their impact in a rate shock analysis The Rate Shock Net Income report can incorporate non interest income non interest expenses and effective tax rates into the standard rate shock simulation Net Income Return on Assets and Return
156. d Simple average z Interest Bearing Due From Bank Y Fed Funds Sold J WV Display 2 decimal places Fed Funds Sold Securities Ratio Components 4 U S Gov t US Treasury Bills US Treasuries Notes 4 U 5 Agencies US Agencies CMO s SBA Pools Private CMO s Agency CMO s MBS s MBS s Var Municipal Sec Municipals Taxable Municipals Stock Equity Securities Other Securities Other Bank CD s 0 Gross Unrealized AFS G L Loans 4 Commercial Commercial Loans Fix Commercial Loans Var Commercial Loans Var w Floor SBA Loans Unguaranteed SBA Guaranteed Loans J Real Estate 4 Commercial Commercial RE Fixed Commercial RE Var Commercial RE Var w Flo 4 Residential Residential RE Fixed Residential RE Variable Residential RE Var w Flac Home Equity Loans Home Equity Loans w Flo 4 Personal nans i lt a Plan File C Program Files Compass S ample Bank S ample Bank mdb 2 21 2008 3 26PM Note Both the numerator and the denominator have a limit of approximately 10 items each When you attempt to save the ratio the program will inform you if either of the individual limits has been exceeded To the left is your Chart of Accounts on the right is the Design Area At the top of the Design Area there is a list of Data Types for use as the numerator and denominator with the calculation The center of the screen contains the actual Ratio Components where the ratio will be built Note the and on
157. d as a Segment in the model Since we are interested in capturing the floor rate when the Driver reaches zero in Segment A and we know that the product rate goes from 14 to 07 at a driver of 36 we know that the account rate will decrease by 03 36 07 0252 when the 11 District COFI reaches zero So when the Driver rate moves from 36 to zero the product rate drops by 03 from O7 to 04 The rising beta is applied in the same manner Remember the automation creates the current rate position or the Pivot Segment B the rate when the driver rate is at zero Segment A and the rate at 100 percent Segment C NOW Accounts Projections Projections Budget a EOM Hew Offering Balance Balance Fate Dec gr Err e011 Jan 102512 Feb 100 522 Mar 101 103 Apr 100 870 May 96 30 Jur 96 1771 Jul 96 171 0 14 Aug 96 171 0 14 Varance Fed Funds Expense 11 045 12 264 10 543 11 356 10 865 11 057 10 952 11 435 11 435 Hotes _ pier Seg Driver Spread Rate _ ooo a00 000 IT 35 DER Ay 0 00 O04 0 04 aE B 136 4 223 D4 0 14 101 093 C 100 00 95 91 4 09 013 100 412 013 10723 Di4 91 29 D14 96 374 014 96 171 D14 96 171 The Rate Shock Yield report reflects the beta behavior exactly as calculated 40 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 400 300 200 100 0 100 200 300 400 Liabilities Interest Bearing Deposits NOW Accounts NOW Accounts 004
158. d audit of the model behavior in various rate environments Any assumption used in the model should have some basis either in historical behavior or serve as scenario analysis to ensure that viable possibilities are examined The Beta option fully automates the start of this process 41 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 See also Put Call Module Customers do not always behave according to contract terms Customers prepay loans and redeem certificates of deposit prior to their maturities Bond issuers may be able to call their bonds prior to maturity Unfortunately these customer actions usually happen precisely when it is to the financial institution s disadvantage especially during times of rapidly changing interest rates Prepayments become more important as the length of time between rate changes increases and as the volatility magnitude of movements of rates increases If your portfolio is all short term or floating rate you may be able to ignore prepayments But if you have fixed rate loans or deposits that extend for more than 3 years you need to consider prepayment behavior Not all accounts require such models however even in times of minimal interest rate movements failure to consider customer prepayments can lead to over estimates of profitability and growth Compass captures a bank s specific prepayment experience and allows both simple and complex prepayment modeling at
159. d rate shock may be printed B2 7 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C EXCEL ADD INS Excel Add Ins are programs that add special commands and features to Microsoft Excel The Excel Add In for Compass provides a way to access a Compass plan data directly in an Excel spreadsheet to create custom reports and charts Plansmith provides Excel Add In clients with the Compass xla program file This enables you to access your plan s mdb database files by referencing a series of functions codes Before You Begin The box for User has Excel Add In in Utilities Options Chart of Accounts must be checked in order to store the necessary calculations needed to use the Excel Add In This is the default setting delivered with all new installations General Chart of Accounts Dividends Reports Models Last Files List Fonts Date Formats V Auto compute Allow Prepayment of New Maturities V Reinvest Net Income V Auto compute Base Yield Keep New Balances Constant WVW User has Excel Addin compute time is slower vV Don t Allow Negative New Balances in Maturing Accounts Cancel Saving Add Ins on Your Computer The next step is to save the Add In to your computer Typically you will save it in C Program Files or Program Files x86 Compass but your network administrator may designate an alternate location and Vista users may be directed to save it to the Add In folder
160. ding function is particularly useful when forecasting To determine a trend highlight a range for which the trend is desired typically a period of history click the right mouse button and select Calc Total Avg amp Trend Compass will display statistics about the selected range The Trend is the average dollar change per month By hitting the OK button the trend is stored so that it can be applied to another range of data To apply the trend select a new range in the projected months hit the right mouse button and select Apply Trend from the option list The trend will be applied to each month highlighted as an Aggregating Offset option The Trend data also appears at the bottom of the Quick Edit list Another technique for applying the trend is to select the Aggregating Offset Option and use the Trend Value as the amount Either method produces the same results however you must have a valid starting point before applying a trend 25 Projections Budget Maturity Variance Fed Funds Dept View Notes Total EOM New Offering Total Maturities Balance Balance Rate Maturities rate Interest Yield Balance User Edit Manual User Edit 97 966 8 27 13 983 4 597 24 927 6 65 4 425 4 745 4 949 Range Calculation Res 25 678 6 72 4579 28 958 6 71 5 081 28 126 6 34 5 396 30 889 6 74 5 396 29 843 6 73 5 396 32 859 6 76 5 724 35 012 6 84 6 031 35 839 6 89 6 330 36 910 6 92 6 283 EOM
161. ds Sold 5 801 ERES 3 47 01 1 30 10 76 453 49 LIQUIDITY ANALYSIS Total Liquid Assets EOM Cash amp Due EOM Fed Funds Sold EOM Total Securities EOM Pledged Securities Total Deposits amp Borrowed EOM Total Deposits EOM Fed Funds Purchased EOM Borrowed Funds EOM Pledged Securities Liquidity Ratio Total Liquid Assets Total Deposits amp Borrowed 10 A 28 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B MONTHLY UPDATE PROCEDURE 1 Make sure that the latest extract files from your data processor have been copied to the same folder where your plan mdb files are located after you have made a back up This path is 2 Perform the download Open Compass by clicking on the Compass icon on your desktop Select your plan path from the Select a Plan File window and click Open Your plan is called teh Click the DataBridge button Verify that the Month and Year are correct Click on the Perform Download button Print a copy of the DataBridgeDownloadErrors log Select File Print from the left hand corner of the small box not from top of your screen Total balance of maturity data is not equal to the last EOM GL Balance for Account and Account has an EOM weighted yield of rate and an Average Monthly GL yield of rate error messages will be corrected later Ej Sample DataBridgeDownloadErrors log Not File Edit Format View Help consolidated Plan has t
162. e Promotional Pricing option is not available Ses when using the Quick Offering Rate models Save E now x Save Ag Driver ERUERA a In the example below the promotion of 100BPS is being applied in the months of January June and December and the promotion is carried through all years of forecasted data January Rate 330 4 Time Lag 0 Honth Ehen Current Price 11124 Calc Spread Edit Spread Factor ki Create 4 Promotion Rate Promotions This form allows promotions to be added to a pricing model Use the table below to enter any desired rate adjustments by month These adjustments are applied after the model is calculated Also by default the promotions are only applied to the current year IF you want to apply the promotions to all years of the planning cycle place a check mark next to the Apply to all years option Seg Driver Spread Rate 0 00 0 00 0 00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Now Dec 0 00 O00 O80 000 1 00 OOO dt OOO 000 o 1 00 Clear Adjustments M Spply to all years Add Insert Delete Clear The Rate Shock analyses will take a promotion into account only if that promotion is being applied to the first projected month The shock calculations are performed as before then the promotional spread will be added subtracted if the promotion is applied to the first projected month 29 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015
163. e cursor to the cell you want to change and type the new value Jun 10 365 215 Bi Sep 10 365 237 873 Oct 10 365 214 8 84 _ Nov 10 985 311 8 95 Dec 10 985 260 9 05 Oct 10 965 306 8 01 Nov 10 965 270 8 11 Commercial Fixed Projections Projections Budget Maturity Variance Fed Funds Notes Total EOM New Offering Total Maturities Balance Balance Rate Maturities xrate Interest Yield 2008 Manual User Edit Manual User Edit Jul 27 114 178 292 8 06 26 03 Aug 25 966 190 492 8 12 27 23 e Sep 10618 saas2 a68 m You can also use the Quick Edit options to enter rates Det 11 862 80 181 B71 10836 i Nov 10683 EOMYiel 82672 950 10583 Activate the Quick Edit by highlighting any range of Dec 10 965 81 283 8 98 10 51 2008 Jan 10965 138 6 65 1A AF3 cells and then right click the mouse to view these Feb 10 965 157 7 66 Quick Edit Ma _10 968 E 7e options The previous sections discuss how to apply i Clear May 10 965 195 7 66 j j j j Ma 105 SE the various Quick Edit options 10 965 356 Aug 10 365 196 Calc Total Avg amp Trend Sep 10 965 wre vvo MA dh Nov 10 965 270 8 11 270 8 60 77156 8 44 Dec 10 965 351 8 20 351 9 07 79560 8 43 10 965 Quick Pricing Models The Quick Model Mode allows the user to quickly express a relationship For example set a spread to a driver such as 1 over Prime for a quick pricing model When the objective is to build a non linear relationship the
164. e edit was 4 511 000 and now is 5 092 000 an increase of 581 000 The increase is a result of the total increase of 2 853 000 which is 25 000 000 minus the original December total of 22 147 000 19 94 of 2 853 000 equals the same 581 000 110 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 OFFSET The Offset option adds subtracts a value to from each cell that is highlighted This edit is useful when a forecast is in place but additional volume changes need to be made to that current projection Example of Offset After Edit Funds Quick Edit Branch T Branch 02 BranchO3 Branch 04 Admin M anager Total o Dec 4 083 390 7401 o 687 0 20 551 O Annual growth rate pS ene _ Earca a0 Jan 4317 408 7 786 4134 0 71 B45 C Ramp from to a value Feb 4351 415 P16 9 155 21 840 i Offset footie Mar 4385 420 AIE Fi Wii 22 D38 f Distribute replace existing Apr 4 4 439 5 1 Be 3 1 1 22 1 43 450 i mm G n G E n G E n G E n B eee ge May 4 456 8 317 9 122 22 344 Offset 000 Jun 4 492 461 8 455 9 040 22 448 Jul 4 528 472 8 594 8 965 22 560 Aug 4 567 44 8 740 8 532 22 423 Last Calculation Results Sep 4603 ASE miata 0 E32 508 Cm 5 G m S GE m A A a EA GA m Total Oct 4 640 3 025 8 634 ere Nov ABT 521 9 170 B637 53 005 Dec 414 Hag 4 318 ool 0 0 zadr After editing each cell in the total column has an additional 1 000 000 The additional 1 000 000 each month has been distributed
165. e the Category Code function key to determine a category code Account Data Codes are not listed in that they are bank specific and you can pull them from the Compass Menu or through the Account Code Function Key Category Data Codes c aa Assets c aca Common Stock C aaa Cash amp Due c acb Surplus c aab Fed Funds Sold c acc Preferred Stock C aac Securities c acd Undivided Profit c aaca U S Gov t c ace Current Earnings c aacb U S Agencies c acf Dividends C aacc Mortgage Backed Sec c acg Capital Notes c aacd Municipal Sec c ach Net Unrealized AFS G L c aace Stock C aci Other Capital c aacf Other Securities c ba Non Interest Income C 13 c aacg c aach c aad c aada c aadb c aadba c aadbb c aadc c aadd c aade c aadf c aae c aaf C aag c aah C aal c aaj c aak c ab c aba c abb c abba c abbb c abbc c abbd c abbda c abbdb c abbe c abc c abd d 1029 d 1044 d 1032 d 1054 d 1047 d 1001 d 1005 d 1010 d 1006 d 1009 d 1007 d 1008 d 1014 d 1002 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Trading c baa Gross Unrealized AFS G L c bab Loans c bac Commercial c baca Real Estate c bacb Commercial c bad Residential c bada BMGR Advances c badb Personal c bae Acquis Develop Const c baf Other Loans c bb Loan Loss Reserve c bba Fixed Assets c bbb Investment Loss Reserve c bbc Goodwill c bbd OREO c bbe Time Dep Other Instit c bbf Other Assets c bbg Liabilities
166. ePrnts rate Maturities Tg GUUS Treasures User Edit User Edit No Model a E US Treasuries E Sep EI _ U 5 Agencies Oct 130 1 55 130 1 55 0 0 00 0 Sa te E US Agencies How 0 0 00 0 0 00 0 0 00 0 aj H Mortgage Backed Securities Dec 51 3 12 51 3 12 0 0 00 0 MES 2014 Jan 0 0 00 0 0 00 0 0 00 0 5 a Municipal Securities Feb 104 1 25 104 1 25 0 0 00 0 poopoo he Municipals Mar 0 00 0 0 00 0 0 00 0 2 4 Marketable Securities Apr 103 1 70 103 1 70 0 0 00 0 E Other Secunties May oO 0 00 0 0 00 0 0 00 0 of bn B Money Market Acct Jun 104 1 44 104 1 44 0 0 00 0 oo E Investment COAR s Jul 0 0 00 0 0 00 0 0 00 0 5j Corporate Securities Aug O 0 00 0 0 00 0 0 00 0 o J Corporate Bonds Sep 0 0 00 0 0 00 0 0 00 0 El a Gross Unrealized AFS G L Oct 0 0 00 0 0 00 0 0 00 0 opoo h E Unreal Gains Losses Aen ae 1 69 B6 1 69 0 0 00 0 E Loans Dec 0 0 00 0 0 00 0 0 00 0 Click the Maturity Tab Change the last number in the Scheduled Maturities column to eliminate a small difference If differences are more than S5M or 5 call Plansmith Compass automatically corrects Red Flags for this issue if you have checked Fix Small Maturity Imbalance in the DataBridge Settings The default is to adjust for a difference of 2 or less for accounts whose EOM balance exceeds 250M and 5 or less for accounts with balances less than or equal to 250M You can also define a custom Small Imbalance Threshold in Utilities DataBridge Set
167. ecalculated In previous versions one would manually edit the EOM Yield Cost blue box in order to account for the new weighted yield We highly recommend that you select the Auto Compute Base Yield to automatically update the blue box EOM Yield Cost which will ensure projections budget and rate shock output will be accurate Commercial Loans Fixed Maturity Projections Budget Maturity Yariance Fed Funds Hotes Last EOM Balance 95 073 Total Scheduled Maturities 95 073 Balance Difference I EDM vield 6 08 Rate 5 97 Yield Difference Weighted Avg Mat q EOM field Keep New Bals Constant Everyone forecasts his or her balance sheet differently The standard method is to determine the projected growth of EOM balances either in dollar volume change or as an annual growth percentage If your projection is for new volumes rather than percentage growth then you may want to select this option Selecting Keep New Bals Constant will ensure that the new volume projection remains the same in your projections If selected this option will apply to ALL accounts User has Excel Add In compute time is slower The Compass compute routine can take up to 20 seconds per database If you have many databases to compute Consolidation or SBU clients it can take some time to complete the routine Leaving this option unchecked will speed up the routine considerably You do not want this to be checked if you use the Excel Add In as the compute rou
168. ecast Make sure that the branch modeling button is set to Manual Any branch column set to Quick or Modeled cannot be changed using the Dept View Tab Also you will not be able to create Growth Models using the Dept View Tab 2 Highlight the months in the column for the branch that you wish to change 3 Right mouse click and select Quick Edit 4 Choose the Quick Edit function that you want to use refer to the Quick Edit instructions located in the Account Projections section of the manual 5 Click OK Changes will be made to each branch based on the Quick Edit feature you choose to use 106 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 You can also manually key numbers in one or more months using the Dept View Tab or even copy and paste projections from a spreadsheet Remember that pasted projections must be in columns not rows and rounded to thousands Commercial Fixed Dept View Projections Budget Maturity Variance Fed Funds Dept View Notes Funds Branch O71 Branch 02 Branch 03 Branch O4 Admin Manager m bk Rene ves Diveset Diveasa Dec 4 083 380 7 401 etna aii 2012 Jan 4117 a 742 7 Ged Betts a Quick Edit Option Ok In this example the projection is Mar 4 186 40 7 682 s pei i Apr 4221 4 r813 nnual growth rate C l being changed for Branch 03 using Gi 4256 e 945 Ramp to a value as the Quick Edit function Ramp to a 8 078 C Ramp from to a value Value Thi cacti th
169. elect any of the data values listed below One value If you wish to see two types of data and bring that data into a spreadsheet you will need to do two separate exports Click on Step 3 to Create the file Note the file name and location above A data txt file has been created in the designated directory Select OK when you see Export Complete EOM Balance Scheduled Maturities f Average Balance Scheduled Maturities rate CO ncomesExpense New Maturities f Yields Costs New Matuntites srate C Offering Rate Total Maturities rate Scheduled PrePmts Scheduled PrePmts rate a m m C New Balance C Total Maturities E f Scheduled Repricings a m f Scheduled Repricings srate DATABRIDGE SETTINGS Please see the DataBridge section for additional information The exported data will be placed in the following file Compass Compass Plans Financial Compass 8 34 ntegrity Bank 201 2 Step 3 Create the file gt meee The Risk Compass interest rate risk analysis for those who subscribe to this module can be created by selecting this option in the Utilities Menu KPI Poticy EDITOR KPIs or Key Performance Indicators are selected line items or ratios used to track the performance and policies of your institution for those that subscribe to the the Executive Dashboard module Creating your own set of KPIs and Policies is as easy as dragging and dropping The Accounts Summary Items column left hand side contains y
170. ely and unlikely if the shock time frame is changed between one and two years If this occurs you will see the curve color change between red and blue If you wish to Deactivate a scenario so that it will not be factored into the Non Parallel Rate Shock simply click on that scenario on the list at left and then click on the Deactivate button in the middle of the screen The scenario will become shaded meaning it is deactivated d F gt High Flat 5 68 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The middle portion of the screen shows a more detailed view of the particular rate scenario selected along with the current yield curve The scenario at right is unlikely and shows in red while the current Treasury Curve is shown in blue The Current month in the Non Parallel Rate Shock Module is the same as the Parallel Shock It should show as the last updated month Below the data is the option to perform the income simulation on a period greater than one year The default is for one year but you should change the time period to match the same period as the income simulation run for the parallel shock Twist Name Inverted Deactivate There is a ramped shock option which changes interest rates gradually from the current position to the position reflected in the scenario The change will be made incrementally within the time frame specified above Current Month is Sep 2010 Shock Current Balance Sheet
171. ent Data summed into Total Bank plan and Taxes Net Income calculated Funds Manager plan adjusted to account for Fed Funds balances Current Earnings and Cash Balancing ea Se SBU FORECASTING USING THE DEPARTMENTAL VIEW TAB Adjusting projections in an SBU model can be a daunting task as you add more branches and departments especially if you adjust these projections on a monthly basis The Departmental View Tab is a featured enhancement in Version 8 that gives access to branch department data all in one screen through your Total Bank plan While you can still open each plan separately and revise projections in that plan certain revisions may be easier to make through the Departmental View Tab Sz Commercial Fixed Dept View 4 Stock Projections Budget Maturity Variance Fed Funds Dept View Note FHLB Stock eed unds my ae Branch 01 Branch 02 Branch 03 Branch 04 Admin Manager Total Gross Unrealized AFS G L Dec 3 642 575 4 894 petag 0 0 14 535 Unreal Gaing Losses 2011 Jan 3 323 FES 4940 4 97 T 0 13 796 2 5 Loans Feb 3239 FAB 46r Bol 0 T 14 532 9 Commercial Mar 3 555 J36 5 059 6 1993 0 0 15 270 Commercial Freed Apr 3 645 95 4 608 6 694 T 0 15 322 Commercial Float Map IEN 34 4 356 Tede 0 T 15 976 Commercial LOC Float Jul 3 546 250 Ra T 36 0 16 502 Commercial Horn sccral Aug 3 576 256 5 581 7 655 0 17 067 1 First open the Account Projections and select the individual account you wish to for
172. ent Rate 6 00 Prepayment Rate Be Commit Cancel 11 584 913 11 Insert Edit Delete 45 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The Edit button allows you to manually change historical data that was either missing or deemed erroneous Period Feb 2012 Principal 11 639 410 53 Offering Rate Curent Rate Prepayment Rate Commit Cancel Mode History Instruments Offering Current Prepayment Oct 2012 Sep 2012 Aug 2012 Jul 2012 Jun 2012 Map 2072 Apr 2012 Mar 2012 11 584 913 11 60 Jan 2012 9 027 729 64 9 742 056 97 10 775 050 64 10 611 412 70 10 743 031 63 10 737 234 83 10 923 450 30 Insert Edit Model History Instruments Offering Current Prepayment 12 00 Oct 2012 gor fd BA 4 00 6 05 aed 10 00 Sep 2012 S42 056 97 000 6 05 0 36 Aug 2012 10 775 050 64 O00 6 08 9 33 l Jul 2012 10 611 412 70 000 610 0 42 ae Use the Delete button to remove any line of Jun 2012 10 743 031 63 O00 612 0 71 data that you have knowledge of that should be May 2012 10 737 234 83 000 611 0 33 6 00 excluded from the prepayment calculation Ap20i2 1092345030 O00 _ 6 19 Ea Piety Mar 2012 12 388 287 12 0 00 6 08 0 30 Sate Feb 2012 11 639 410 53 605 611 0 86 Jan 2012 11 584913 11 5 60 600 0 64 a ee a 2 00 Delete Prepayment History en cis Insert Edit C ste D During t
173. entries through the Projections tab If eliminating entries are calculated on a spreadsheet you can cut and paste these numbers directly into the Projections Tab The Consolidation Settings should also reflect which plan is designated as the Eliminations Plan If one has not been selected please choose the proper one from the drop down menu Eliminationz Eliminations Flan ig set to The following example illustrates the steps necessary to consolidate your bank data 1 Open the Eliminations plan and enter the elimination of the actual data for the previous month in the Update Financial screen When you have made all of your entries click on Save Data DOWNLOADED DATA EOM Average Income Balance Balance Expense Yield Liabilities Demand Deposits Demand Deposits 0 U 0 0 00 lntercompany Deposits p O00 4 000 0 0 00 2 Ifyou are only concerned with the Elimination of actual data you will need to Compute the Plan and Compute a Rate Shock and continue with Step 5 If you would like to eliminate projections skip the computes and continue to Step 3 x E las A Faste 3 To eliminate projections manually enter the data or cut and al e paste the data from a spreadsheet As the data in the Compass Formulas Validation projections is in columns the eliminating entries need to be in D z se 3 ormats alumn widths columns to use the paste function To change the orientation in ere Excel from rows to columns use t
174. entuamaeueeatsouteeostadieed 43 Put Call Module ooo ccccssesscsessssesccsesseecseccessescsessesensceessusenscausenseeasanseuseaesensenscansensenseas 50 Income Expense Models ooo csccsessesssessesceeceeseeseeseessesenssesseeseeseeseesersansensensensseseesseseaee 53 Loan Loss Reserve Provision Model ooo cesscsscsseeseeeecseesseescseeseenscseeseenseseeseenseseeeeenseseeees 56 Compute the Plan Calculate the Impact of Changes ccsccccseccceeeecceueeceneeceeeeeeeeeeeeueeeeneeeenees 60 Compute Parallel Rate Shock Calculate the Parallel Shock Impact c cccececceceececeececeececeuee 61 Compute Non Parallel Rate Shock Calculate the Impact of Yield Curve Twists _ cscesese 66 Reporting acct sepssteseected teat sadadacecanoemunepcedetucpueeonseoseSatpcconcounusssdeue lt pet deetaeveaiedacaea cosedeuceeteeseanece 81 Report Designer Create Custom Reports ooo ccecsssessrssesseessnsseeseeseeseeserseeeseeseeseeeseeesneenseeess 86 Ratio Designer Create Custom Ratios oa cssscceccencescceecesaceseeescesaeeseecscesaeeseessesasesseeseees 93 Consolidation Summarize all listed Plans ooo cic cceesesseeseseeseseeeseseeessseeessseesesseeeeseevesnevenaes 97 Holding OM ANY ais eecisiset testes taseetee vecenssetcestceunic gas acusyeunvietondaciechsagetdhaes baveieessecereeeoeneiean 100 Strategic Business Unit Planning Model c ceseeceeeecnseeenceneeecnensenenseeenseeenensenenees 104 VGN SS aoe SAE
175. eport Accounts EOM Balance nd This Yea ka By Month Body T Save Save 4s Summary Items Custom Ratios Actual Include Totals Averages Arial 5 You should review all of the Data Type options PERFORMING CALCULATIONS The Report Designer provides limited calculation capabilities To insert a calculation into your report place the cursor on the row where you would like the calculation to appear and press the right mouse button A menu will display Ref Description Data Type E F G H J K L Jan Feb Mar Apr May Jun Jul Aug 2007 2007 2007 2007 2007 2007 2007 2007 2 aada Total Commercial Yid 7 61 7 36 7 33 6 96 7 36 7 55 7 81 7 62 3 aadbb Total Residential Yid 10 19 7 46 7 44 7 46 7 42 7 45 7 46 7 46 4 aadc Total Personal Loans id 6 78 6 98 6 97 6 89 Le 7 55 7 50 7 37 5 G Clear Rows s f Delete Row Insert Row 10 11 12 Indent 13 Remove Indent 14 15 Add Edit Text 16 Add a Function ifs 18 1E 20 21 Add Page Break 22 Add Row Underline Ratio 23 Custom 24 Select the Add a Function to view the calculation options e Ratio allows you to build basic ratios with row data e Custom allows the addition and subtraction of row data 8 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Let s look at some examples of these functions Example 1 Totaling data contained in rows There are three rows of loan volumes and we wish to insert a total line
176. er just click on the Description line and then double click on the ratio on the left In the report above is the comparison of the newly created Loan Deposit Ratio within the Ratio Designer top line to the Compass pre calculated ratio which you will notice are the same 95 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 CONSOLIDATION The Consolidation module in Compass can be set up to consolidate banks or Strategic Business Units SBU see The Strategic Business Unit Planning Model following in this section To determine which type of consolidation has been set up refer to the Consolidation Settings Business Unit Settings for SBU in the Consolidation screen If you wish to set up your own consolidation e g you d like to budget for a potential new bank you will need to set up a plan which will receive the data from the individual plans Please contact Plansmith Support Services at 1 800 323 3281 for assistance NAVIGATING A CONSOLIDATION It is highly recommended that you ALWAYS access the bank plans through the consolidated screen Even if you are changing one item in a particular plan you should access that plan through the consolidation screen Compass will always assume that your Plan mdb files reside within the same folder and use the same naming conventions If you move the plans to a new folder Compass will retain the link among the subs IMPORTANT However if you change the name of any of your su
177. er updating your Compass plan is very important This can be accomplished On Screen or by Using Reports On Screen 1 Verify the Balanced condition of the Balance Sheet and Income Statement by reviewing the month in question from the Update Update Financial selection in the top menu bar Net Income is at the lower center part of the screen along with any tax amounts Rounding may cause minor differences Adjust minor Balance Sheet differences to Other Assets or Other Liabilities Adjust minor Income Statement differences to Other Income or Other Expenses Major differences may be the result of a correlation error Please refer to the Identifying Problems in Your Download section 10 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 2 The DataBridgeDownloadErrors log and Red Flags will both identify problems with Help maturity data Correcting these issues can be done in the Account Projections under Cra the Maturities tab see Assumption Validation Feature Red Flags section ee Year End Shift 3 Rounding causes minor differences in the dollar values and yields costs of Maturity Zero Out Plan data Adjust minor differences to the last time bucket or use the Fix Small Maturity eae Imbalance setting located in Utilities DataBridge Settings Here are the options DataBridge Settings within this menu Reporter Extract Risk Compass KPI Policy Editor e EOM Avg Yield Threshold allows you to raise or
178. erage floor and ceiling for the entire portfolio Please make sure that you do not pull in floors and ceilings on mixed portfolios The entire portfolio will be held to the weighted average floor and ceiling This will come into effect when the account s Driver Rate moves to a level where the floors or ceiling would kick in These can be viewed in the Maturity Tab Commercial Loans Float Projections Budget Maturity Variance Fed Funds Notes Last EOM Balance 94 477 Total Scheduled Maturities 94471 Balance Difference Avg Floor Ceiling T 23 21 00 EOF eld 9 00 Aate 3 00 eld Difference Weighted Avg Mat oe 31 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 In order to properly capture the portfolio floor and or ceiling this type of an account needs its Offering Rate modeled using a Driver Model A Driver Model is one that is set up in the Rate Forecast screen File Update Rates Reporting Utilities Help Ch 7 Re PE E R ates are Curr ent These buttons process the data for all three scenarios Load Rate Forecast New Driver Driver Model Projections Compute Select New Driver and enter the name of the account that you are modeling in this case Scenario Pen z e SE Hanon Commercial Floating After entering the name select Add Rate and it will appear as a new as an o Thy D l A2 a O A column heading at the far right hand side of a ae ea ere a oti m C oo o
179. erence in Income Expense Variance Due to Balance Yield Calendar Note The Rate Volume Calendar report does not contain any category totals There is a difference of opinion on the theories by which such totals should be calculated Cost accounting method Category results would be calculated by using the weighted average yields on the entire category and computing each component of the variance at the category level This method will produce different dollar and percentage variances for volume and rate than just adding the dollar variances from the detailed calculations That difference is reflected in the mix variance and is due to the different distribution between the categories in the budget vs actual results Addition method Category results are determined by adding the dollar variances for each member of the category This method is easier to verify but ignores the impact of the different composition of the category between budget and actual SIMPLE VARIANCE ANALYSIS Income or Expense Difference Due to Bal Actual Average Balance Budget Average Balance Budget Income or Expense Budget Average Balance Income or Expense Difference Due to Yield Yield Variance Budget Balance Days in Month Days in Year Income or Expense Difference Due to Mix Difference in Income or Expense Variance Due to Balance Yield Totals and Subtotals Balances amp Income Sum of individual account data Yield Sum of Inc Exp Sum of
180. es like dates covered level of detail etc right click while the mouse pointer is on the report name on the Directory list on the left side of the screen and select Properties B2 5 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 I Financial Reports E Balance Capital 4 Display Income diay Fate Risk Properties Account Fo atl Copy For script T Gap Rate Sh D Click on the picture of the Printer to print the report If you want to graph any line item or total double click on the description of the line item If you want to graph any line item or total double click on the description of the line item To create Comparative Graphs right click on the line items you wish to compare and selecting Mark Unmark row for charting After you have selected your items they will appear shaded Next right click and select Build the chart Commercial Insert Page Break Real Estate Commercial Remove All Page Breaks Residential Mark Unmark row For charting Build the chart Clear marked rows Res 1st Mtg Ar Dee Tethdta SGhd EA Inf 7 Adjusting the Forecast The following steps should be performed by someone who is familiar with the bank s projected growth plans and current loan and deposit rates A Reports showing Balance Sheet and Income Statements should be reviewed for possible revisions to projected volumes Revise projections in the individual
181. ese scenarios and assess our bank s ability to maintain adequate earnings and capital levels that withstand negative unforeseeable circumstances OF Cancel Preferences Reports I 23 One issue you may experience is the need to print Cered Phen alt Seramis Mende Reports assumptions for multiple branches or banks The TE Last Files List Date Formats Risk Compass package will default to printing from the Total Bank or Total Consolidated database which may not contain assumptions In order to print the assumptions used in each unit or branch Include empty line tems Prnt Assumptions for this Plan i 12 Month Gap Min 075 Max 725 Parallel Rate Shock Increment e Wl Limit WwW MYE Limit open the branch or unit select Utilities Options cee l 200 10 2 and Reports Select the Print Assumptions for this ees m z m Plan 200 ho 20 Non Parallel Rate Shock if HII W MYE Maximum Percentage Change 27 Fa 4d ka OF Cancel Assumptions 45 Pricing Relationships 46 Adjustable Rate Repricing Relationships 48 Prepayment Models 49 Your Risk Compass Table of Contents will adjust to add the branch Callable Bond Models 50 i P Alternate Discount amp Decay Rates 5 assumptions you ve added Please be careful as adding all branch Pricing Relationships 52 i Whi Adjustable Rate Repricing Relationshios assumptions will increase the number of pages in the report Prepayment Models 56 package subst
182. et value of equity will be incorrect Traditionally rate changes at each shock level are considered to be instantaneous and sustained Compass however offers a ramped option for income analysis Ramping means that a rate change of 100 basis points would slope from zero at the beginning of the period to 100 basis points at the end of the period increasing by 100 11 or 9 09 basis points starting the second month It should be noted that the ramping rate change methods would yield lower average yields and costs than the instantaneous method However the examiners may ask for higher overall ranges of shocks For example in recent years an up and down of 200 bp instantaneous and sustained has been typical Under the ramping methods a 400 bp shock may be requested sloping from 0 to 400 over the selected time horizon The impact is nearly the same as a 200 bp instantaneous change Plansmith s Compass provides options for performing analyses under either or both conditions Growth is not considered in the analysis The volume within each account is held constant over the analysis horizon Maturities roll off at their exit rates and are reinvested at the new shocked rate Prepayments are also applied to the maturities if they are modeled under the account Maturity Tab Scheduled Prepmts column This means that categories like mortgages will have their yields accelerate downward faster in falling rate condition because the prepayments are i
183. ets 10 Net Interest Margin Annualized Interest Income including Loan Fees Annualized Interest Expense Average Earning Assets 10 Interest Expense Paying Liabilities Annualized Interest Expense Paying Liabilities 10 Paying Liabilities are those liabilities with interest expense Cost of Funds Annualized Interest Expense Average Deposits Borrowed Funds 10 Interest Spread Annualized Interest Income including Loan Fees Average Earning Assets 10 Annualized Interest Expense Paying Liabilities 10 Efficiency Ratio Annualized Operating Expense excluding Loan Loss and Investment Loss Provisions Annualized Extraordinary Expense Annualized Interest Income including Loan Fees Annualized Interest Expense Annualized Non interest Income Annualized Extraordinary Income 100 EOM Assets Source EOM Balance Sheet Earning Assets Ratio Average Earning Assets Average Assets 100 Equity Assets EOM Equity EOM Assets 100 EOM Equity EOM Total Deposits EOM Equity EOM Total Deposits 100 Loan Deposit Ratio Average Loans Average Deposits 100 Loan Asset Ratio Average Loans Average Assets 100 Loan Loss Reserve Loans Ratio Absolute Average Loan Loss Reserve Average Loans 100 A 12 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Non Taxable Asset Ratio Average Tax Exempt Assets Average
184. f all the banks projections In essence the consolidated plan is just a shell that receives account data from its sub plans after performing the Add em Up routine Each plan on your list is set to send its data to the consolidated plan file The data for each bank account will go to the appropriate consolidated plan account according to the plan s Consolidation Correlation Table To view this table simply right click on the plan box and select Correlate Accounts Total Holding Company Add em Up Re compute Individual Flans prior to dd em U Eliminations ank 4 wicca Bank Add em Up Budget Open Plan Balances Only Remove Plan Correlate Accounts Properties The accounts are automatically correlated using the account title when plans are added to the consolidation screen unless there are different spellings used for the same account You are Editing the Consolidation Correlation Table Consolidated Plan Link to Bank 1 Cash Due From Banks Due From Banks Due From Banks Add Fed Funds Sold Fed Funds Sold Fed Funds Sold Funds Provided Funds Provided Restore US Treasuries US Treasuries US Treasuries US Agencies US Agencies US Agencies ea CHO s MBS CHO s MBS CHO s MBS Changes Municipals Municipals Municipals Freddie Mac Stock Freddie Mac Stock Freddie Mac Stock Print Table FHLB Stock FHLB Stock FHLB Stock Security Discount Accretion Security Discount Accretion Securi
185. formulas one at a time This is done by typing the equal sign typing one of the function names and then typing in the Arguments which answer these four questions e Which Data EOM Balance Avg Balance etc do you want to use e Which Date do you want to use e Which Account do you want to use Which Plan do you want to use The formula bar will typically appear as cmpDataValue Data Date Account Plan where the Arguments are the details between the parentheses following the function name They must be in exact order separated by a comma and include extra spaces If an argument needs to have spaces or punctuation enclose it in quotation marks like Cash and Due Compass Function Codes There are thirteen function code categories that provide access to various types of data within your plan The plan references a Microsoft Access database that uses the following codes in place of names to identify sets of data a Account i Rates c a Balance Sheet o Interest Rate Scenarios c b Income Statement p Properties c c Off Balance Sheet Items r Rate Shock Data c d Memo Items s Compute Summary Data d Account Data t Tax Data g Gap Data The following codes are standard category codes that are used most frequently Depending on the layout of your Chart of Accounts and the names on your accounts your codes could differ To verify these codes either pull them from the Category Account list or us
186. g Yes to shift the database you will be prompted to Compute the Plan Always select OK and Compute the Plan You will now be able to update January of the current year Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Post Shifting You are now ready to update January and re project data through the new year you have created If you have models they will automatically account for the new year and re project for you Additionally another year has been added to your Rate Forecast You must enter rates or download the January rate file after shifting your plan The actual data for the prior year has been moved to the history area of the database where it can be accessed by selecting Utilities Edit History This data can also be viewed in the Account Projections by scrolling up on your screen when viewing an account Budget Data after Shifting Budget data for prior years is NOT stored in your database but you will have a copy of the prior year s budget in the archive copy of your Plan mdb file and Rateworks mdb that you made prior to shifting the plan If you have already locked your budget it will not be affected by the shift to the new year If you are still creating your budget for the new year the data will remain in the Account Projections until you perform the Lock Budget function Reversing the Year End Shift RoWnIGadl EGE There are two ways to undo a Year End Shift The first is to exit the
187. g Expense Loan Loss Provision 100 Non Interest Expense Average Assets Annualized Operating Expense Loan Loss Provision Average Assets 10 Non Interest Income Average Assets Annualized Other Income Loan Fees Average Assets 10 Efficiency Ratio Annualized Operating Expense Annualized Extraordinary Expense Annualized Loan Loss Provision Interest Income with Federal Tax Exempt items Annualized Federal Tax Rate Interest Expense annualized Non Interest Income Extraordinary Income 100 LIQUIDITY Cash amp Due Average Assets Average Cash amp Due Average Assets 100 Fed Funds Sold Average Assets Average Fed Funds Sold Average Assets 100 Loans Average Deposits Average Loans Average Deposits 100 A 24 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Liquidity Ratio EOM Cash amp Due EOM Fed Funds Sold EOM Total Securities EOM Pledged Securities EOM Total Liabilities EOM Other Liabilities EOM Pledged Securities 100 LOAN QUALITY Loan Loss Reserve Average Loans Absolute Average Loan Loss Reserve Average Loans 100 Provision for Loan Losses Average Loans Monthly Monthly Provision for Loan Losses Annualized Monthly Average Loans 10 or YTD Sum of Annualized Monthly Provision Sum of Monthly Average Loans 10 CAPITAL ADEQUACY EOM Equity EOM Tier 1 Capital EOM Equity EOM E
188. ge and EOM balance for the month analyzed will be the same as the volume component is held constant Earning Assets and Paying Liabilities are the balances of assets and liabilities that have interest income or expense in the rate shock analysis Total Assets Growth Ending Assets Beginning Assets Beginning Assets Source EOM Balance Sheet Averages Ending Beginning 2 Earning Assets Growth Ending Earning Assets Beginning Earning Assets Beginning Earning Assets Equity Ratio EOM Capital EOM Assets Will be equal to Minimum Equity Preferences General Utilities Options if earnings needed T Gece char of Accounts nee apa Overhead Expenses taken from plan Models Last Files List Forits Date Formats Derived from projections for the shock iod Bank name Sample Flarn period Min Equity Ratio 8 00 Minimum Required Net Interest Income Total Overhead Expenses covered by Net Interest Margin Earnings needed to meet Equity formation and dividends Estimated Taxes Projected Taxes divided by Projected Pre Tax Income over shock period Net Interest Margin with Flat Rates Net Interest Margin from Rate Shock Yield Zero Point Earning Assets Averages A 20 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Risk Tolerance Net Interest Margin with Flat Rates Minimum Required Net Interest Income Calculation of Minimum Required Net Interest Margin OO0 s o
189. hanging scenarios E Step 3 Computing individual accounts ie Step 4 Analyzing the plan Summary data Compute All Departments Cancel It is important to run the Compute All Departments for the SBU plans Compass will then Allocate Capital and Expenses to the sub plans perform the Compute the Plan routine on all branches or departments combine the branch department data calculate the Total Bank s tax liability and finally update the Funds Manager plan with Fed Funds projections and Cash Balancing projections We recommend you clear out the Cash Balancing Account s projection after each compute SBU CAPITAL ALLOCATIONS There are three Capital Allocation methods available for choosing at the time your Compass system is developed The standard option is for Capital to be downloaded each month to the Total Bank only which is referred to as Don t Allocate Capital At Branches If an allocation method is chosen each Branch or Department will receive an allotment of capital from the Total Bank during the Compute All Departments routine Capital will be posted to the Capital Allocation account in the Undivided Profits folder in each plan receiving an allocation The allocation is applied to both actual and projected data Allocate Capital as a of Assets is determined by the percentage of EOM assets in the branch department Assets do not include Funds Pool Out For example Total Bank EOM capital equals 1OMM Branch 1 has EOM as
190. he Decay Rate estimate will be visible within the Account Wizard screen as well as within the Account Properties Editor It is updated monthly as new actual data is loaded but it is for reference purposes only and will not be loaded directly into the system Decay rates for Demand Deposits are based on the weighted average of all NOW accounts and all calculations are capped at 100 months Regardless if you are entering Decay Rates based on your own historic analysis that of a third party vendor or one that has been calculated by the Compass system Decay Rates are entered manually through the Account Wizard If the account is set as Non Maturing you will be prompted to determine whether the account requires a decay rate If the answer is yes the Wizard will let you choose to apply the decay rate to Gap to Duration Market Value or to both You will then be asked to enter the Does this account require a decay rate decay rate in months Compass will simulate maturities in equal monthly amounts over the number of months chosen to fully amortize the beginning balance Account Wizard NOW Accounts NOW Accounts Choices Account Wizard HOW Accounts NOW Accounts How should the decay rate be applied Apply rate to GAP and Duration Market Value Duration Market Value GAP and Duration Market Value Cancel lt Back Mest gt 78 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 In order t
191. he Maturity setting in the Account Wizard is not the same as the correslated account in the consolidated plan Accrual The Accrual Method setting in the Account Wizard is not the same as the correlated account in the consolidated plan If you receive a ConsolidationError log make the necessary corrections within the plan s specified After correcting the consolidation errors proceed to Step 7 Add em Up Add em Up Add em Up again to incorporate any changes made due to errors Your holding company consolidation is complete You are ready to view reports 100 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 FORECASTING OR PROJECTING ON A CONSOLIDATED PLAN As a consolidation is a sum of the parts the projections reflect the sum of all the bank projections In essence the Consolidated Plan is just a shell that receives account data from its sub plans No models pricing prepayment etc are present in the Consolidated Plan To perform a What If scenario on a Consolidated Plan one simply enters projections into the appropriate bank On occasion however you may be asked to perform a test or What If on the consolidated level only To do so you need to have all the modeling present in the Consolidated Plan This includes pricing and prepayment modeling DO NOT transfer models to the consolidated plan unless you are performing a What If on the consolidated plan If you are unsure ple
192. he Paste Special Transpose Diae C Multiply option C add Divide Subtract 99 Skip blanks I Transpose Paste Link Cancel Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Then in Compass click select the column you wish to paste the data into and Right Click for the Paste option The Ctrl V paste option also works here Eliminating entries can be pasted into ANY Compass account including Current Earnings and Undivided Profits Compute the Plan and Compute a Rate Shock Be certain all the plans have the same rate shock levels selected Add em Up The consolidation of bank data into a consolidated holding company is very Straightforward The data in each of the plans is simply added together Click Add em Up on Add em Up and view your reports Fie compute l If you are unsure if the individual plans have been computed you may want a Be to select Re compute Individual Plans prior to Add em Up Add ern Up Budget If you are unsure if the Rate Shock computes were run you can run all Rate Elelainetes WI Shock computes at once by Computing a Rate Shock from the Consolidated Plan Clear the Consolidation Error Log After the Re Compute or Add em Up you may receive a consolidation error log on your screen This log will list all plans containing errors identify the types of errors that exist per plan and include the specific account and description of the error as well as
193. he download process instrument level detail for each loan and certificate of deposit is captured and displayed in the Instrument Tab for further analysis To assist you in analyzing the data you can click double click on a column header to automatically sort values from highest to lowest or lowest to highest 46 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 On occasion due to extraordinary activity such as reclassifications or data errors in your download file you may wish to adjust the prepayment amount that has been downloaded To modify the instrument level calculated prepayment simply enter the desired amount for the appropriate line item in the Adjusted Prepayment column and it will be highlighted in purple You will also see the Adjusted Prepayment change automatically Commercial Loans Fixed Historic Prepayment 1 60 Current Time Period Aug 2012 Model History Instruments Adjusted Prepayment 0 36 Calculated Instruments 32 Prepayment 2 2 81 Instrument ID Maturity Date BOM EOM Current rida tse Calculated Adjusted Principal Principal Rate P Prepayment Prepayment ayment Payment 1 382 935 75 1 327 506 08 6 37 166 950 08 55 429 67 38 831 00 ID00029 26 Feb 2014 34 659 37 0 00 7 00 817 38 34 659 37 33 842 00 IDO0003 10Jul 2017 100 000 00 97 222 11 6 75 1 405 85 2 77 89 1 372 00 rte IDO0009 14 Dec 2012 9 389 03 7 337 95 6 13 917 54 2 051
194. he edit In this case Branch 01 had a figure of 13 000 in January 2007 which was 65 29 of the total figure of 19 911 to start As a result this branch will receive an increase in January 2007 of 6587 or 65 29 of the total increase that month of 10 089 30 000 19 911 ANNUAL GROWTH RATE Using this option the projection starts with 19 911 and is growing at a rate of 5 per annum The Total column reflects this increase Again the increase each month is proportional with the January 2007 figures remaining the same as the starting point of 19 911 has not changed Example of Annual growth rate After Edit Branch 01 Branch U2 Branch 03 Branch 04 Admin Funds Manager Tota Select a Quick Edit Option Ok Jul 13 000 2409 2 00 2 000 13 80 e Constant Aug 13 000 2 F265 2 500 2 O00 19 82 Annual growth rate S 13 000 2343 2 500 2 O00 19 84 2 Ramp to a value a a 13 000 2 360 2 500 2 000 19 86 2 cu Pomgoraaue Nov 13 000 2377 2 500 2 O00 19 87 F Aogregating Diset Dec 13 000 2 394 2 500 2 000 19 59 Pio ea d 2007 Jan 13 000 2411 2 500 2 O00 19 511 Distribute as offset Feb 13 042 2457 2 508 2 007 19 994 D m J G m A E m SA G a A G r o 20 07 Annual Growth Rate z Apr 13 129 2 407 2 525 2 020 20 24 Last Calculation Results Jul 1 3260 2564 2 550 2 040 Total 20 499 opr l 20 584 mm G E n G G an G a G G G E a Trend Oct 13 391 2643 2575 2 060 Moy 13 436 2 B7O 2 564 2 067 Dec 13 480 2 BSB 2592 2074 20 670 20 75
195. he following errors GL Code GL Code 1642 in Line 62 in the GL Extract File BS dat is not in the Balance Sheet Correlation Table 1642 in Line 62 in the GL Extract File BS dat is not in the Balance sheet Correlation Table i Loan Code 52 3 46 0 000000 0 000 O in Line 785 in the Loan Maturity File ML dat is mot in the Loan CD Code 55 365 2 A in Line 189 in the Deposit Maturity File CD dat is not in the Deposit Maturity cc on the following accounts the total balance of maturity data is not equal to the last EOM GL Balance CD s gt 2750K 7 1 Mo CD s gt 2750K 25 36 Mo IRA s 18 Mo Var on the following accounts the EOM weighted yield differs from the Average Monthly GL yield by more than 1 ACCOUNT Eom weighted Yield Avg Monthly GL Yield EOM Avg ee ee ee ee ee ee ee 4 a ee rr er rr tee Corporate Bonds 1 67 8 60 6 9 CD S lt 250K over 36 Mo 2 08 1 91 0 18 Investment CDAR S 0 17 0 00 0 17 CD s gt 250K 75 36 Mo 1 49 1 36 0 13 CD s lt 250K 25 36 Mo 1 39 1 27 0 12 Residential R E Adj w CL 6 50 6 40 0 10 G Make any additions to the Correlation Tables needed to correct the Code xxxxxx in Line nnnn in the extract file file name is not in the table name Correlation Table and cannot be downloaded Please refer to the Monthly DataBridge Operation in the DataBridge B 1 3 Plansmith Corporation Simplify
196. he temporary plan file virtually every time that you press the Enter key Should you have a power failure or abnormal program termination you can recover the temporary plan when prompted upon re launching Compass WHAT S IN A PLAN Compass has space for up to five years of history five years of projections and five years of budget in each plan Compass history and projection columns are designed to be updated each month with actual balance maturity and interest rate information Projections are then automatically revised for the remainder of the five year plan Normally it is necessary to review and revise these automatic projections to find ways to improve performance and to reduce risk Senior management should provide input for these revisions to increase the accuracy of the projections and to get better operating results The budget columns in Compass are designed to be updated less frequently Usually budgets are formally approved on an annual basis however some institutions review the budget more frequently Compass lets you prepare budget figures in the projection columns and then transfer those figures to the budget columns when you are ready to freeze them for future comparisons This process is called locking the budget It is accomplished in the Utilities area of the menu The budget columns in Compass do not change when you load additional historical data Please note that you do not enter data directly into the budget tabs or columns
197. hlight the row location on the report Then double click the left mouse button on the desired ratio It will automatically be placed in the report at the selected location There is also a Selected Item function in the properties menu right click of each Summary Item Choosing this option has the same effect as double clicking the item 90 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 OTHER REPORT DESIGNER OPTIONS When you right click on any row in the report body the options list appears that provides many other control features These are applied to the row selected Clear Rows s Delete Row Insert Row Indent Remove Indent Add Edit Text Add a Function Copy Add Fage Break Add Row Underline PUTTING TITLES ON YOUR REPORT Change Data Type iF Now that your report is designed you will want to give it a title or header The opportunity to title your report is available at the top of the designer screen Accounts Summary Items a lt Design Area Title lt PlanN ame gt Please be sure to save any report changes before attempting to print the report A TETT E Balance Sheet alance Sheet m Subtitle 1 New Report Assets T Subtitle 2 _ Liabilities pz Capital g Note R indicates actual values I Income Statement Preview Report T Footer lt Page Non Interest Income This area you will recognize from the standard Compass Report Properties Header features All the same func
198. hows only 7 433 has been downloaded The minimum needed is 8 731 The result is a red flag as the minimal amount of repricings is not met Total Average Trend Total Scheduled Repricings If you have a red flag it s quite possible that the portfolio has accounts that reprice beyond the defined First Time to repricing You can test this by extending the First time to repricing out further to 72 months and try rerunning the DataBridge download You can then go to the Account Projections and see what repricing balances come in If you have repricing balances that download to further buckets you may want to consider changing the First time to repricing in the Account Wizard Please be careful to note the original settings in the Account Wizard or do not save changes if you run this test 21 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 ACCOUNT TABS The data for each account is substantial so Compass organizes the data into convenient logical subsets under tabs within each account and category folder Use these tabs to view different sets of account data The tabs are as follows Projections Tab Contains the projected data for each account or category folder This is where the user forecasts balances and models rates in the EOM Balance and Offering Rate columns respectively Budget Tab Contains the locked budgeted information for balances interest and yields Maturity Tab Contains the contractual m
199. ht clicking on the account YEAR END SHIFT Once a year it is necessary to accommodate projected data for a new 12 month period by moving the prior Update for Apr2014 See Mste year s actual data and storing it as history This process is referred to as shifting the database You have the ability to enter up to five years of actual and projected data in your database Each month as you update your plan another month of actual data is posted This reduces the amount of projected data by one month until the plan is shifted For example a plan that is updated with actual data through December has 12 months of actual data and 48 months of projected data In order to begin entering actual data for the following year the Year End Shift function must be performed to create 12 additional months of projected data You will not be able to update January of the next year without performing this function Always back up your Plan mdb and RateWorks mdb files prior to shifting your database To shift the database and create the New Year select Utilities Year End Shift Consolidation and Strategic Business Unit SBU Systems clients will perform the Year End Shift at the Total Bank Plan or Consolidated Plan only This will shift all affiliated plans as listed in the consolidation layout The Compass system will walk you through the process Year End Shift J Do you want to Shift this Plan s Data to Begin a New Year After selectin
200. ibute replace existing Constant Places a constant value in each highlighted cell takes the C Distribute as offset value from the input box p Constant O Annual growth rate Growth rates are always expressed as annual rates When you place a growth rate in the input box Compass will use 1 12 of this value to grow each highlighted month from the previous month s value Last Calculation Results Total Average P Trend Ramp to a value This option allows the user to target a specific amount in a future month by evenly dividing the monthly growth from a starting to the ending value The first highlighted value will be the starting point and the last highlighted cell will contain the value stated in the Ramp to box The cells between these two will grow incrementally This is handy if you know your ending goal Ramp from to a value Same as above except that you can set both the starting point and the ending point Compass evenly divides the values in between Offset This function will add subtract the specified amount to from the existing number in each highlighted cell Use a sign to subtract an amount Aggregating Offset This is similar to the Offset except that the amount will compound each month For example if the Aggregating Offset is 100 then the first highlighted month will be increased by 100 the second by 200 the third by 300 and so forth Distribute replace existing This option works much like
201. iddle Link to column lining up with the Consolidated Plan s new account Release the mouse button and the account will be properly correlated You are Editing the Consolidation Correlation Table Consolidated Plan Link to Bank 1 Cash Cash Due From Banks Due From Banks Due From Banks Add Fed Funds Sold Fed Funds Sold Fed Funds Sold Funds Provided Funds Provided Restore JUS Treasuries US Treasuries US Treasuries US Agencies US Agencies US Agencies ee CHO s MBS CHO s MBS CHO s MBS Changes Municipals Municipals Municipals Freddie Mac Stock Freddie Mac Stock Freddie Mac Stock Print Table FHLB Stock FHLB Stock FHLB Stock Security Discount Accretion Security Discount Accretion Security Discount Accretion Security Premium Amortz Security Premium Amortz Security Premium Amortz Unreal Gains Losses Unreal Gains Losses Unreal Gains Losses Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var Additionally Compass does not allow for the correlation of multiple accounts in a plan to a s
202. ill To add features to this system please enter the configuration code provided to you or call Plansmith populate the entire fields then click to accept the new code and the features will be accessable Click here to accept the code and begin using the new features 58910 SDG 5 75HN1NH 2s Click here to cancel the log in process at 600 323 3761 to receive a configuration code 134 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Compass Calculation Index Annualization Interest and Ratio Calculation Methodologies Tax Calculations Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A ANNUALIZATION INTEREST AND RATIO CALCULATION METHODOLOGIES Annualization Methods A Annualization of Monthly Interest Income and Interest Expense Earning Assets and Paying Liabilities are calculated on an account by account basis using the accrual method as set in each account s properties Please see Reports Chart of Accounts in Compass for each account s properties To annualize monthly interest multiply by the number of days in the year and divide by the number of days in that month Example 1 Monthly Commercial Variable Interest for March 15 000 Accrual Method Actual Days 365 Annualized Interest 15 000 x 365 31 176 613 Example 2 Monthly US Government Securities Interest for March 1 200 Accrual Method 30 360
203. ill now validate your general ledger data for the Total Bank B1 2 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 After Add em Up if the Difference numbers at the bottom of the Update Financial screen are more than 5 ask Plansmith for assistance Otherwise the Difference is most likely due to rounding and you will adjust Other Liabilities to eliminate it increase other liabilities if the difference is positive decrease other liabilities if the difference is negative Remember ALL adjustments need to be made in a subsidiary plan Verify that the Net Income shown at the bottom of the screen is equal to the monthly pretax income from your trial balance or other GL system report If not locate the difference by reviewing sub totals or line items Differences of up to 10 may result from rounding and can be adjusted in Miscellaneous Expenses Remember ALL adjustments need to be made in a subsidiary plan Compute the Plan If you have made any adjustments to your general ledger data ina subsidiary plan you will need to Compute the Plan again before clearing any Red Flags Clearing Red Flags You now need to make sure each subsidiary plan does not have any red flags To open a subsidiary plan please navigate to the branch through the Consolidation screen Once you are in the subsidiary plan click the Account Projections button Correct any Red Flags Select the first account that has a red
204. in the Deposit Maturity File PLANCD is not in the Deposit Maturity Corr B2 1 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 NOTE Each separate branch or department has its own set of DataBridge errors To correct the error for a particular branch you must open that branch by selecting Consolidation and enter its DataBridge screen You may also see errors for branch codes that are in a file but unaccounted for in the model Some Department Branch Codes were encountered in the extract files that were not matched to any branches of the SBU N Users SBU Update Sample PLANGLA 99 N UsSers SBU Update Sample PLANGLI 99 If you see branch codes unaccounted for contact Plansmith at 800 323 3281 G Make any additions to the Correlation Tables needed to correct the Code xxxxxx in Line nnnn in the extract file file name is not in the table name Correlation Table and cannot be downloaded Please refer to the Monthly DataBridge Operation in the DataBridge section of the manual for help in making these corrections Any other errors should be referred to Plansmith for explanation H If you make any changes to the Correlation Tables repeat steps 2D and E from the Total Bank plan Make sure the month and year are correct Data Validation After all the error codes have been resolved and the DataBridge re run open your Total Bank plan and validate the data B Verify the month
205. individual account average balances Items in the detail are sorted by Repricing Period lowest to highest then by Rate lowest to highest Three elements 1 Share of free funding Demand Distributed by of Assets 2 Capital allocation First by RBC weighting then by excess 3 W Individual Accounts setting Order of accounts by duration or average life Shortest liabilities used to fund shortest assets Waterfall funding analysis Can help to identify mismatches in assets vs funding sources Change the Default Settings Matching Method Switch to Funds Pool All accounts use same cost of funds income statement ratio A 26 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Overhead Adjusted Uses Account Wizard rates or calculated rates Switch set to Yes Use Actual Overhead Actual OH Calculated Overhead Calc OH Calculate Overhead by multiplying all balances by their individual Cost Factors and adding them together Adjustment applied proportionately Actual Overhead Total Non Interest Expenses excluding Provision for Loan Loss Total Trust Income No Overhead rates from Account Wizard applied Repricing period Duration or Average life properties setting Duration duration from Account Market Value Duration report Average Life from Weighted AvgMat in Maturity Tab Reprice Period Non Maturing with Decay Rate Decay Rate 2 5 Reprice Period Non Interest Bearing without Decay Ra
206. ing Complexity Last Updated 1 30 2015 APPENDIX B section of the manual for help in making these corrections Any other errors should be referred to Plansmith for explanation H Ifyou make any changes to the Correlation Tables repeat steps 2D and E Make sure the month and year are correct Data Validation After all the error codes have been resolved and the DataBridge re run validate the data B Verify the month next to Update for corresponds to the month that you just downloaded A Select Update Financial C Enter Year to Date Earnings if applicable in the EOM and Average balance columns on the Current Earnings line Please verify that the rest of the general ledger data is correct D Ifthe Difference numbers at the bottom of the screen are more than 5 ask Plansmith for assistance Otherwise the Difference is most likely due to rounding and you will adjust Other Liabilities to eliminate it To adjust type in a zero into each Other Liabilities column then type the number displayed at the bottom of the screen on the Difference row After adjustments the Difference should be zero E Verify that the Net Income shown at the bottom of the screen is equal to the monthly net income from your trial balance or other GL system report If not locate the difference by reviewing sub totals or line items Differences of up to 10 may result from rounding and can be adjusted in Miscellaneous Expenses F Once your numbers in the
207. ingle account in the consolidated plan If you need to aggregate accounts in this manner please call Plansmith Support Services at 1 800 323 3281 98 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 CONSOLIDATION HOLDING COMPANY The consolidation of banks and intercompany data can be a complicated matter Compass streamlines this process by adding up the financial data and allowing for the elimination of capital and any intercompany accounts This consolidation by default will only add up the data present in each individual plan The resulting Consolidated Holding Company Plan is strictly the sum of its parts and is to be used for reporting only If you wish to do What Ifs and Projections using the Consolidated Plan please refer to Forecasting or Projecting ona Consolidated Plan located further in this section Recommended monthly procedures Each month the various bank plans in your consolidation are updated with actual data You will have verified each bank s plan for accuracy and run both the regular Compute the Plan and the Compute a Rate Shock for each plan The next step is to make any entries to your Eliminations Plan These entries usually include offsets to Investments in Subsidiaries Intercompany Deposits Capital etc To enter actual data for the prior month use the Update Financial screen as you would to update any plan with actual data For Projections and Budgeting enter the eliminating
208. ion Data Type E F G H J K L M N 0 a EOM Interest Bearing Deposits Eh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov EA k kee 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 a kane aid 2 1 Loan Deposit Actual 78 72 7791 7852 7816 8043 8042 7808 77 09 7496 7977 80 28 EOM Dividends 000 s 3 67 Loan Deposit Ratio Actual 78 72 77 91 78 52 78 16 80 43 80 42 78 08 77 09 74 96 79 77 80 28 EOM Undivided Profits O00 s 4 EOM Investment Loss Reserve O00 s 5 EOM Tier 1 Capital 6 EOM Tier 2 Capital f EOM Total Deposits 8 EDM Other Liabilities 3 y Ratios 10 Earning Asset Ratio 11 EDM Risk Based Capital Ratio 12 Equity Capital Ratio 13 Capital Deposit Ratio 14 Loan Deposit Ratio 15 Loan Asset Ratio 16 Loan Loss Reserve Ratio 17 Demand Deposit Ratio 18 Time Deposit Ratio 19 Free Funds Ratio 20 Return on Average Assets Ratio 21 Return on Equity Capital Ratio 22 Break Even Yield 23 Net Overhead 24 Int Inc E arming Assets FTE Ratio 25 Int Exp Eaming Assets Ratio 26 Net Interest Margin FTE Ratio 2 Int Exp Paying Liabilities Ratio 28 Interest Spread F TE Ratio 29 Efficiency Ratio F TE 30 Capital Total Deposits Ratio 31 Non T axable Asset Ratio 32 Liquidity Ratio 33 Risk Tolerance _ 34 Net Interest Income Ratio 35 I Custom Ratios E lt gt 4 gt The Ratios section above contains the Compass pre calculated ratios generated after each compute To add a ratio to the Report Design
209. ion Table File Specifications deviate from these tables Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 EDITING THE CORRELATION TABLE Click on the Correlation Table that you want to edit from the selections on the right hand side of the DataBridge screen You are Editing the Balance Sheet Correlation fable GL Codes Data Goes To Hy Account List 11730000 Cash and Due From Banks Cash and Due From Banks 11740000 Cash and Due From Banks Fed Funds Sold 117586088 Fed Funds Sold US Treasuries 11768088 Cash and Due From Banks US Agencies 11868688 Cash and Due From Banks CHO s HBS 11810008 Cash and Due From Banks Municipals 11878668 Cash and Bue From Banks FHLB Stock 127886868 Fed Funds Sold Corporate Bonds 13000000 US Treasuries Trading Securities 1365 6668 US Treasuries Unreal Gains Losses 13100008 US Agencies Commercial Fixed 13156606 US Agencies Commercial Floating 13300000 Corporate Bonds Commercial RZE Fixed 13400000 Trading Securities Commercial RZE Var 13666606 Municipals Real Estate Fixed 1376600608 Business Manager Real Estate Variable 13900000 Time Deposits Oth Insti Home Equity Fixed 139566608 FHLB Stock Home Equity LOC 1398 80068 Unreal Gains Losses Mortgage Loans HFS 14020000 Acg Dev Const Fixed Business Manager A Restore Save Changes Print T able Cancel titie The left hand side is the Correlation Table In this example the descriptor is simply the General Ledger Accou
210. ions from the Compass drop down menus Next key in the percentage of expense each of the plans will receive from the plan that is the Origin of Expense Please pay attention to the SBU number at left and at the top of the grid Any plan that originates expense will display as a RED box in i i z the consolidation screen The example above has the expenses from SBU 5 Admin allocated to all other plans The only plan that cannot have an allocation of expense from Admin is Admin That box is displayed in red and cannot be keyed in for that plan The expenses are then allocated and posted to the Direct Expense account present in each plan The allocation is a percentage of Net Income from the Cost Center If the center has a Net Profit the profit is allocated to Direct Expense as a negative number The only plan that cannot allocate expenses is the Funds Manager as it is the final plan to be balanced in the Compute All Departments If expenses were to be allocated from the Funds Manager then the Compute routine would repeat itself endlessly If you do not wish to allocate expense do not fill in the Allocations SBU grid SBU FUNDS POOLS As each branch or department is computed Compass will automatically balance the balance sheet using either the Funds Pool In or Funds Pool Out account The use of the Funds Pool account allows the planner to designate a cost of funds usage Funds Pool In or credit for providing funds Fu
211. ious total of 19 911 What if have no projections in my branches and wish to use the Dept View Tab If you are projecting in the balance sheet the total volume added to each cell will be divided equally among ALL branches For example if you wish to have a total of 600 000 at the end of each month in Overdrafts you would choose the constant Quick Edit with a value of 600 118 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Funds Quick Edit Branch 01 Branch 02 Branch U3 Branch U4 Admin Manager Total f Constant C Annual growth rate f Ramp to a value f Ramp fromto a value 2007 Jan 7 1 5 1 i i Oise Feb 100 100 100 100 Boo C Aggregating Offset f Distribute replace existing Mar 100 100 100 100 ow C Distribute as offset Apr 100 100 100 100 ow May 100 100 100 100 100 100 em i ae ii 100 100 100 100 100 Tim 600 T 100 100 100 100 100 100 eo Last Calculation Results 100 100 100 100 100 10 ow Total Soe 100 100 100 100 100 1 Ul e Oct 100 100 100 100 100 100 EOD Mov 100 100 100 100 100 100 s00 Y o Dec 100 100 100 100 100 100 s00 Example of Constant After Edit If no balances were present in each branch the 600 000 is portioned out evenly In the example above the bank has six branches so each receives 100 000 in each month Please be careful using this edit with no balances as branches like Admin and Funds Manager may get projections but should not have any The
212. iquidity Ratio Profitability Policy Categories should be set up with the a te Asset Management Hata lune exact limits you have set for Liquidity Liabilty Management a lt Operating Efficiency Capital Adequacy etc Liquidity eee E Liquidity A atio _ If your policy dictates a range then select Loan Quail Range Limits oe i Capital Adequacy Emit Range Limits and enter the appropriate Growth sid ET limits The example at the right shows a E Liquidity Ratio that must be between 25 and 35 of Total Liabilities cave DATABASE COMPACT UTILITY Your Compass Access database files sometimes increase in size making certain functions in the Compass software take longer than they should While the increase in size does not cause any problems within the model those functions like Compute the Plan can be performed faster if the Access database is reduced in size or compacted Your Compass software has the Database Compact Utility for this reason Simply select this option to manage the size of your database files If you work with multiple plan files SBU or consolidations you will need to select this option when each file is open as selecting from the consolidated plan will not compact any of your subsidiary plans 127 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 OPTIONS The options tab controls various settings that most likely only need to be set once by the user Bank name controls
213. is perfectly correlated to Prime rate during the period examined Note the drop down menu list of rate indices The model will automatically EE rE Hng suggest which index to use based on the aT mo T bill i H 3 T bill highest correlation Sai 2 dO day CO 2 1 mo LIBOR If no correlations exist higher than 80 that means your product price generally did not follow any outside index The modeling for that account then would be your best guess as to how the product would change when rates change You may want to consider developing alternate pricing scenarios for that account to use in simulations In the case of the HELOC account most rate indices present high correlations We suggest using the highest one so we ll leave Value set to Prime Because the account had a Quick Model by switching to New Model the Current Driver defaulted to Fed Funds as when a model is first set up As no beta model had been applied the values for Pivot Spread Rising and Falling Betas are all NA This will change as the beta model is applied History Slider The slider will show in months the amount of data available for the analysis In the HELOC there are 21 months of data being used to calculate the beta values If you would like a shorter period to be considered drag the pointer to the left and let go The Suggested Driver and resultant correlation may change as the different time period is considered This fea
214. isting download process Compass analyzes the bank s loans and time deposits and calculates a monthly prepayment figure This amount will be accumulated and automatically update the Historic Prepayment percentage It is not recommended that you use this Automated Quick Model until such time as sufficient history is accumulated for it to be meaningful Once you have gained confidence in the historic measurement and wish to automate the use of the historic prepayment percentage you can apply the Automated Quick Model by simply checking the Use Historic Prepayment box You will notice that the color associated with the account in the Chart changes to teal blue _ Real Estate Commercial B Commercial RE Fix Commercial R E Fix Historic Prepayment 1 44 Current Time Period Feb 2012 Model History Instruments Model Selection C No Model C New Detailed Model f Quick Model C MBS Bloomberg Prepay Enter a monthly prepayment rate 43 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The most significant type of prepayment occurs because customers react to rate changes Their behavior changes as the difference between their existing rate and the market rate changes Compass has a powerful dynamic prepayment model that lets you capture and plan for this behavior A Detailed Prepayment Model is dynamic it allows you to specify different rates of prepayment at various levels of spread
215. just like security market values As you will have modeled these instruments with both a notional and contra amount we suggest you enter the market values in the notional account and enter a zero for the market value for the contra account Once the Compute routines are performed your numbers will be reflected properly in the report Loans Interest Rate Contracts E Interest Rate Floor 5 1200 1100 1000 500 765 650 500 400 300 Ef Interest Rate 5 Floor Contra g 0 0 0 Oo 0 g 0 0 E Interest Rate Floor 6 1400 1300 1200 1100 50 700 650 575 450 E Interest Rate 6 Floor Contra 0 g 0 0 0 0 g 0 0 lt Rate Shock Market Value Interest Rate Floor Rate Shock Market Value As of the end of June 2011 400 300 200 100 0 100 200 300 400 Interest Rate Contracts Interest Rate Floor5 1 200 1 100 1 000 900 765 650 500 400 300 Interest Rate Floor 6 1 400 1 300 1 200 1 100 850 700 650 575 450 Total Interest Rate Contracts 2 600 2 400 2 200 2 000 1 615 1 350 1 150 975 750 If using the Market Values option with the Strategic Business Unit model values must be entered into the branch where the account balances reside not at the Total Bank level For Holding Company consolidations values are to be keyed in at the bank or company level Inc Exp Forecasts are used for the Rate Shock Net Income report For additional information on this report see Appendix A Market Values Inc Exp Forecasts C c c Shock Level 4 3 2 1 0 1
216. k REM Res MF Fixed Syringa Bancorp Trust REM Res MF Adj SBA Pools Adj REM Res 1 4 Fam 2nd Sweep Funds REM 1 4 Fam LOC z Other Securities 1 4 4 4 1 1 1 1 1 1 1 2 2 3 3 3 3 3 3 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 2 It is the recommended procedure that all accounts in the Balance Sheet Correlation Table and the Income Expense Correlation Table the general ledger accounts that pertain to this set number be assigned to the Compass account that is listed first in this set even if the account relates to another member of the set In this example all GL accounts would be linked to Commercial Fixed 3 When completing the Correlation Tables for the maturity data codes are assigned to each individual member of the set In this case the loan maturity correlation table would look like this You are Eding the Loan Maturity Correfation fable Loan Codes Data Goes To Hy Account List CH 8 66 8880088008 Commercial Loans Fixed Commercial Loans Fixed cH 71 668 8668000008 Commercial Loans War Commercial Loans War Add ca 1 68 6660002168 Commercial Loans War Commercial Loans Adj CH 1 63 B88b888008 CT T a Ba Var Commercial LOG Fixed Restore 1 PGDE Commercial Commercial LOC War y1 84 86e0000008 Commercial Loans Adj Commercial Leases Fixed Save 1 64 866660021
217. l offering rate Is displayed on a g p y Biz U JE TREN o A Dsi E kad Merge amp Center gt a o o 58 E Con the History Tab and may also ania es inas y 4 y E Font fa Alignment fe Number m be viewed in your Excel export E file under the Offering Rate S column Bood ae E d _ __ e _ E i Mar 2012 12 388 287 12 6 08 0 00 0 30 Feb 2012 11 639 410 53 6 11 6 05 0 86 Jan 2012 11 584 913 11 6 00 5 60 0 64 rument ID Maturity Date BOM Principal EOM Principal Rate EL pected Cash Flow Actual C 300001 5 5 2019 19 235 23 19 038 32 6 00 196 14 300002 10 5 2016 240 830 00 240 830 00 6 00 400 0 00 Model History Instruments Instruments T43 Peia pana x Miia To allow you to preserve confidentiality Instrument ID s can be masked from view by going to Utilities Options and checking the box Hide Instrument ID s on the General Tab When exporting data to Excel we suggest you include the actual account numbers with the data Expected Actual iret ae Current ee ie Calculated Adjusted Instrument ID Maturity Date BOM Principal EOM Principal ape Principal Principal Prepayment Prepayment Payment Payment TR a 3 8 _ a eK Smee en MUA 15 Jul 2014 gt a X p O mee a E 27 Apr 2020 6 14 Dec 2013 General Chart of Accounts Dividends Reports ae Models Last Files List Fonts Date Formats 12 Sep 2013 20 Jun 2013 02 Nov 2012 Status bar item Filename bi 17 Jun 20
218. l change to read that your rates are now current upon completion Rates not Current Rates are Current You may also input your own rate forecast one month at a time or by range Quick Edit choices appear whenever you select more than one month in any rate column In addition if you input the last month s actual rate then a quarterly or annual forecast separated by zeros Compass will fill in the blanks when you click the Fill in the Gaps button 14 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RATE SPREAD UTILITY Sometimes it is easier to set Offering Rates when all the rates can be seen at a glance The Rate Spread Utility provides exactly this ability You can find this new feature in the Menu bar under the Rates option m Compass Rate Spread Utility Le x File Update Rates Projections Compute Reporting Utilities Help ir P 5 SNe D CEED GEND 4 f i Restore Save Lock accounts set to manual Hide locked models j Lock accounts with detailed models Edit Offering Rate instead of Spread Account Name Model Type Driver Rate Driver Value Spread Factor Offering Rate lt 4 17 0 00 4 17 4 17 0 00 4 17 0 00 0 00 0 00 3 21 0 00 3 21 3 55 0 40 3 15 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 3 55 0 60 4 15 3 33 1 50 4 83 4 4 0 00 4 41 3 55 0 00 3 55 0 00 0 00 0 00 0 00 0 00 0 00 3 33 0 00 333 355 0 00 0 00 7 22 0 00 7 22 7 22 0 00 7 22 7 22 1 75 8 97 0 0
219. lan for commercial loans Commercial Loans Fixed and Commercial Loans Floating Building a Distribution Table 1 Adistribution set number 1 999 is assigned to a group of Compass accounts that will get part of a split of General Ledger amounts In the current example the Compass accounts that require a distribution set are Commercial Loans Fixed and Commercial Loans Floating This first distribution set number must be number 1 and any additional set numbers must be numbered in order 2 3 4 etc The distribution table is created by entering the Set Number in its respective column then dragging accounts from the My Account List column to the Data Goes To column You are Editing the Distribution Table Set Number Data Goes To My Account List Commercial Loans Fixed Cash Balancing Commercial Loans Var Cash Add Commercial Loans Adj Cash Items in Progress Commercial LOC Fixed Due From Banks Restore Commercial LOC Var Fed Funds Sold Commercial RZE Fixed FHLB IB Demand bare Commercial RZE Var US Treasuries Changes Commercial RZE Adj US Agencies Commercial RZE Adj w fl MBS Fixed Print Table Comm R E Constr Fix MBS FN FH Adj 1 R CHT Comm R E Constr Var MBS FN Adj COFI Cancel Comm R E Const Adj MBS FN Adj Libor _ Cancel Construction Fixed MBS GN Adj 1 R CHT Construction Var CHOS REM Res 1 4 Fam Fix Municipals REM Res 1 4 Fam Var FHLB Stoc
220. lansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Example Stable Balance Starting Balance Starting Yield Maturing Balance Exit Rate Repricing Balance Repricing Yield Note The Account Analysis Report will display the elements in the above calculations Annualization X Days in Month Days in Year Driver Driver Rate Index used in the Offering Rate Model Start Balance Spread First Projected Month EOM Yield Cost Driver Rate of Last Updated Month Start Balance Spread Subsequent Months Ending Balance Spread from Previous Month Maturing Balances Exit Rate Current Driver Rate Starting Balance Spread Stable Balance Starting Balance Maturing Balance Maturing Balances Exit Rate Current Driver Rate Starting Balance Spread Stable Balance Yield Current Driver Rate Starting Balance Spread New Amount Entry Rate Offering Rate Ending Balance Starting Balance Maturing Balance New Balance Ending Balance Spread Previous Month s EOM Balance Current Driver Rate Starting Spread Total Maturities Total Maturities Exit Rate New Balance Offering Rate Current EOM Balance Current Driver Rate Monthly Interest Expense Previous Month s EOM Balance Current Driver Rate Starting Spread Total Maturities for Month Total Maturities Exit Rate 5 New Balance Offering Rate 5 Days in Month Days in Year Monthly Yie
221. layed in the drop down boxes under Driver Rate Setting Your Offering Rates You can set simple Offering Rate models by selecting from a few basic options Account Name Hodel Type Diver Rate Driver Yalue Spread Factor Offering Rate Interest Bearing Due From Bank OM Spread oF Fed Funds Y 417 0 00 4 Fed Funds Sold QM Spread ow Fed Funds al 41 0 00 4 17 US Treasury Bills Manual w lt None gt 0 00 0 00 0 00 JUS Treasuries Notes QM Spread oF 2 ur CMT 321 0 00 321 JUS Agencies OM Spread ow 5 yr CMT eal 3 000 0 40 al 1 Model Type Manual Spread to Driver or Factor Multiple of Driver 2 Driver Rate select from drop down 3 Driver Value given by Compass 4 Spread or Factor to be used 5 The resulting Offering Rate The Restore Button allows you to start over if you have not saved your changes 16 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 ACCOUNT PROJECTIONS The Account Projections is the heart of Compass This screen allows you to model the growth pricing income and expense of the balance sheet and income statement Compass s powerful modeling functions provide the engine for measuring interest rate risk as well as convenient re forecasting mechanisms as the interest rate environment changes A thorough understanding of the Account Projections is the foundation for understanding the entire Compass system THE ACCOUNT PROJECTIONS SCREEN Manual Modeling Fu
222. ld Monthly Income or Expense Days in Year Days in month Monthly Average Balance Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Monthly Average Balance Starting Balance Ending Balance 2 Note The Account Analysis Report will display the elements in the above calculations Ratio Calculation Methods Monthly ratios are calculated by annualizing each account s monthly income or expense and dividing by the appropriate divisor i e Average Assets Earning Assets Paying Liabilities etc The annualized monthly income or expense is stored in the summary files in your data after the compute The Year to Date ratios are calculated by annualizing each account s income as in the monthly calculation accumulating each month for as many months as reported and then dividing by the number of months This method is used to arrive at the approximate income for the year This method was used to make this report as time efficient as possible TAX CALCULATIONS Federal Tax Calculation Federal Taxable Income Net Operating Income Compute Summary Total Federal Tax Exempt Income Compute Audit Total Tax Due Federal Taxable Income Nominal Tax Rate Projections Tax Information If there are State Taxes subtract from Federal Taxable Income if negative State Taxes add to Federal Taxable Income Monthly Tax Calculation Total Income for Balance of Year Net Operating Income Compute Summary
223. like the Account Number function above except it applies to the categories or folders in Compass e cmpCategoryCode Exact Category Name Bank Number Last update shows the date of the latest The ten most frequently used functions are listed below After selecting the function code the Excel wizard will guide you with pulling in the data In describing which plan to reference the Excel function will use the Plan Number argument The first plan listed will have Plan Number 1 The second plan in the list will have Plan Number 2 etc The system currently supports up to 99 plans Frequently Used Functions ABS FSX Y cmpAccountNumber B4 1 B G D E F G H l J 3 mp ccountNumber al Number B4 1 Commercial CatOrAcctRef B4 Es Commercial Fixed J 5 Plan_Number fi Fs 1 2 a 00242 7 No help available Plan_Number 9 10 11 12 Formula result a 00242 13 Help on this function Cancel 1A ABS a X v fe cmpCategoryCode B4 1 am c D E F G H J 2 mpCategoryCode 3 CatOrAcctRef g4 Fe Assets Plan_Number 1 Pel 5 6 c aa 7 No help available 8 Plan_Number 9 10 11 Formula result c aa 12 s Help on this function E Cancel 13 e C 11 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C month of actual data in the plan Referencing this cell as your date will consistently refresh your formulas with each plan update to
224. lized Federal and State Taxes Average Assets 10 Asset Management Earn Assets Average Assets Average Earning Assets Average Assets 100 Interest Income Average Earning Assets Annualized Interest Income Average Earning Assets 10 A 23 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Break Even Yield Annualized Operating Expense Annualized Interest Expense Annualized Other Income Annualized Loan Fees Average Earning Assets 10 Liability Management Interest Expense Average Earning Assets Annualized Interest Expense Average Earning Assets 100 Demand Deposits Average Assets Average Demand Deposits Average Assets 100 Core Deposits Average Assets Average Total Deposits Average Large CDs Average Assets 100 Non Core Funding Dependence CDs gt 250K Fed Funds Purchased Borrowed Funds Fed Funds Sold Average Assets 100 Time Deposits Average Assets Average Time Deposits Average Assets 100 Free Funds Ratio Average Earning Assets Average Paying Liabilities Average Earning Assets 100 Note Report selection FTE Yes will adjust Federally Tax Exempt accounts annualized income by multiplying by 1 51515 for Federal Nominal Tax Rates of 34 or 1 1 Nominal Tax Rate if different than 34 OPERATING EFFICIENCY Non Interest Income Non Interest Expense Other Income Loan Fees Operatin
225. ll be lost unless you exit the SBA Guarante Cut Move _ Real Estate 4 Commercial Commercii Rename Cut Move is used to relocate accounts to another area of the chart Commerc Account Wizard Pornar Edit Properties 4 Residential plan without saving changes Paste Insert will place the account at the cursor location Residenti Properties Rename allows the user to rename an account Account names can also Residenti i Residential RE Var w Floors be changed in the Account Wizard or Edit Properties functions To H Equity L r jeepers rename folders right click the folder title button and select Rename _ Personal Loans Installment Loans Account Wizard walks the user through all of the account properties Overdraft Protection Lns I Non Accrual Loans e i F SBA Loans Non Accrual Edit Properties is used to view the major aspects of the account and permits C Lns Non l ec s r changes but it is recommended that the Account Wizard be used to ensure AE TOA ta that all attributes are logical Personal Direct Non Accrual _ Other Loans Overdrafts Properties lists the active properties of the account To change a properties use the Account Wizard where all property options are made available SUMMARIZING ACCOUNTS Compass Account Editor 4 File Update Rates Projections Compute Reporting Utilities Help Clad eS 6 or FT E
226. ll show all values manually entered in bold and the account will have an asterisk to the left signifying that it has manually entered market values Any market values not provided by the user will be calculated by Compass according to the standard present value formula R Rate Shock Market Yalue Interest Rate Floor Rate Shock Market Value As of the end of June 2011 400 300 200 100 0 100 200 300 400 Securities MBS s Mortqage Backed Sec 35 111 37 000 36 000 35 000 35 509 34 000 33 000 32 000 32 625 Dome market values are being externally derved and manually entered into Financial Compass They may not correspond to the value calculated by Financial Compass 63 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The option for Market Values is not available for the non parallel rate shock The only values that will transfer to the non parallel rate shock results will be Scenario Zero or the Zero Point from the parallel rate shock results as this rate scenario is constant between both analyses _ lt NP Rate Shock Market Value Interest Rate Floor Non Parallel Rate Shock Market Value As of the end of June 2011 Scen 0 Scen 1 Scen 2 Scen 3 Scen 4 Scen 5 Scen 6 Scen 7 Scen Securities MBS s Mortgage Backed Sec 34 410 34 113 34 650 34727 33 462 33 151 33 356 34 650 Off Balance Sheet items such as Interest Rate Floors Caps and Swaps have market values that can be entered
227. long term rates remain relatively unchanged The module includes an option to run the income analysis for periods greater than one year if needed The Financial Compass software provides for an unlimited number of rate scenarios to be analyzed but the automated rate update feature will pull in a limited number of stress scenarios which are dependent upon the current level of interest rates HOW THE NON PARALLEL RATE SHOCK MODULE WORKS The Non Parallel Rate Shock module is available by subscription Once you have subscribed your software will be updated to include a new Compute button on your Navigation Bar as well as a new Compute option on the Compute menu drop down File Update Rates Projections Reporting Utilities Help Compute Parallel Rate Shock Compute Non Parallel Rate Shock Externally Calculated Rate Shock Values In order to use the Non Parallel Rate Shock module you will need current Treasury Yield Curve rates in your Financial Compass Rate Forecast Plan Rate environment These rates comprise the current Treasury Yield Curve 65 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 and are the basis for the rate simulations It is recommended that all financial Compass clients update their Rate Forecast on a monthly basis Having forecasted rates is not a requirement as it is the current rate environment that is analyzed The current rate environment is the first projected month s rates In the example
228. lues must only be one account data type It does not allow mixing such as Loan Balance and Loan Yield in the numerator line This is also true of the denominator However the numerator and the denominator can have different data types Repeat this process for the denominator Since we need to use both Demand and Interest Bearing Deposits to equal Total Deposits first drag Demand Deposits to the denominator line Next to add the Interest Bearing Deposits to Demand simply drag the sign on the right onto the denominator line F Then you can drag the Interest Bearing Deposits to add to the denominator Finally select the Average Balance data type for the denominator line If you make a mistake at any point simply drag and drop the correct item over the incorrect one Ratio New Ratio Save As Accounts Summary Items H Assets r 6 A Habite Data Types Humerator Average Balance Denominator Average Balance bA Average Balance Aggregation Method Budget Average Balance E Interest Checking Accounts Budget Income Expense ba Interest Checking Accounts E aaa leis Balance E Money Market Accounts cane dence Money Market Accounts Ratio Components New Balance Fly Savings New Maturities Ae Savings Accounts Loans H H Time Deposits 100 x 6 A CD s gt 250K Demand Deposits j7 interest Bearing Deposits E The multiplier of 100 is used to express the ratio in a percentage form 93 Pla
229. me 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 31 666 368 Non Interest Expense 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 79 977 902 Operating Income 25 872 150 26 967 050 27 210 663 29 037 045 31 006 713 32 455 231 36 440 351 40 486 142 44 467 048 Federal Tax 8 279 401 8 629 782 8 707 741 9 292 205 9 922 523 10 386 066 11 661 353 12 956 055 14 229 993 State Tax 1 326 735 1 382 882 1 395 375 1 489 033 1 590 038 1 664 319 1 868 678 2 076 148 2 280 290 Net Income 16 266 014 16 954 385 17 107 547 18255807 19 494 152 20 404 846 22 910 320 25 453 939 27 956 764 Earnings Change 3 228 138 2 539 766 2 386 605 1 238 345 0 910 694 3 416 168 5 959 788 8 462 613 Percentage Change 16 56 13 03 12 24 6 35 0 00 4 67 17 52 30 57 43 41 Return on Average Assets 0 74 0 77 0 78 0 83 0 89 0 93 1 04 1 16 1 27 Return on Average Equity 6 48 6 76 6 82 7 28 7 2 8 13 9 13 10 15 11 14 Utilities Reporting Compute the Plan Help As of the end of February 2014 If your rate sensitive non interest income expense items will vary by shock scenario you will need to key those values into the report To enter those values select Compute Externally Calculated Rate Shock Values Compute Parallel Rate Shock Compute Non Parallel Rate Shock i Externally Calculated Rate Shock Values In the exam
230. ments to Manual editing 3 Select Yes and you ll see all modeling buttons reset to Manual Confirm Change gt A Do you want bo set All Departments to Manual editing Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 4 Highlight the months that you wish to change Right mouse click and select Quick Edit 5 Choose the Quick Edit function that you want to use 6 Click OK As your Quick Edit is being soread over a number of branches it is important to see how the particular edit applies to each branch Following are samples of each Quick Edit option applied Dept View Tab Before Quick Edit Options are Applied Funds Branch O71 Branch 02 Branch U3 Branch 04 Admin Manager Total Dec 4053 300 f 401 Asiti 0 20 551 0 0 oo oo O 0 I m G n G a A E a Sep 4 400 4rd 0 489 0 25 21 614 Oct 4 457 456 o 630 0 206 21 008 Hov 4 474 495 Ore o A52 0 22 005 Dec 4 511 511 0 916 a210 0 ZALET 108 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 CONSTANT Using this option in the Dept View Tab each highlighted cell in the Total column will be changed to the value you select If a branch has data in the months edited it will receive a proportionate amount of the increase or decrease to reach the new total amount Example of Constant After Edit In this edit mode the Total column in 2012 was changed to 21 000 000 For January 2012 this
231. mitted Equity Formation amp Dividends Amount Earm Avg Mar 2014 Growth Mar 2016 Averages Needed Assets Assets Total Assets 1 479 659 10 24 2 102 336 e 060 996 Earning Assets 1 924 700 9 65 2 110 391 2 017 545 Equity Formation 167 057 167 057 167 057 0 0 00 0 00 Equity Needed for Min 0 B r a0 3 365 6 73l 0 17 0 16 Equity Ratio o da 00 Dividends 0 0 00 0 00 Earnings needed to meet equity formation and dividends 6 730 0 17 0 16 Overhead Expenses taken from plan Mon Interest Income fa negative expense PF a4 1 93 1 07 Non Interest Expense 147 419 3 65 3 54 Loan Loss Provision 460 0 20 0 19 Estimated Taxes Effective Rate 31 gt 6 applied ta Required Earnings 3 001 0 07 0 07 Total Overhead Expenses covered by Net Interest Hargin 00 636 2 00 1 94 Minimum Required Net Interest Income 67 366 Z 2 10 Calculation of Risk Tolerance Met Interest Margin with Flat Rates 155 150 3 05 3 75 Minimum Required Net Interest Margin over next 24 months 0r 366 fl 2 10 Risk Tolerance Maximum allowable Net Interest Margin Change 67 784 1 66 1 63 The Market Values and Dur ation figures will be calculated according to the formulas for Market Value and Duration located previously in this Appendix A These figures are the same as the Market Value and Duration at the Zero point of the Rate Shock Market Value report Note An account will be considered an Earning Asset if there is income or expense posted to that account in any given m
232. model match those on your report click the Save Data button and follow the prompts to Compute the Plan G Click the Account Projections button H Select the first account that has a red flag and correct any Red Flags Click the Diagnostics button bottom center of data screen for guidance Restore Date Interest re 15 6206 As loaded 515 831 450 886 559 655 Revised 515 831 450 586 559 653 Change 0 0 0 B 2 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B To clear the red flag manually enter the rate There are four types of rates that could be affected the offering rate in the Projections tab the scheduled maturity xrate rate in the Maturity Tab and the new repricing rate as well as the scheduled repricing xrate in the Repricing Tab Rates Projections Compute Reporting Utilities Help Le gmp e A ee By BY BY Corporate Bonds Maturity File Update Bas Y Balance Sheet 2 Projections Budget Maturity Variance Callable Fed Funds Hotes Fi Bad cosh t Due Last EOM Balance 598 Total Scheduled Maturities ara Balance Difference ez esi m Cash EOM rield 1 67 Rate 1 67 Yield Difference DI ate SE Due From Banks Em E LB Due From Banks Adi H a Fed Funds Sold Scheduled d Scheduled Scheduled Bob be E Fed Funds Sold scheduled Maturities Scheduled Matz Scheduled PrePrits New Matu Eh Ey Securities Maturities srate Maturities tate Pr
233. must enter a date reference and plan number on the worksheet prior to completing the Data Wizard as noted on the example below Refer to Frequently Used Functions section Last Update for information on Data Iter List Account Properties referencing the date so data fields will change as you update your plan Once the arguments are filled out select OK to populate the report To populate the wizard first place your cursor in a line item on the data wizard then highlight the cell that you want to pull Notice that the white cells in the wizard window contain the cell name followed by the equal sign and the argument LA B S D E F G H I J K L Mi N 1 Dec 08 2 1 d 1002 EOM Balance Cash amp Due Cash and Due From Banks xi FEN PS SON Data Reference Eza d 1002 F Fed Funds Sold EE aac carute Monthly value YTO Sum Y YTD Average 9 c aaca U S Gov t Date u Dec os 10 a O01L00 US Treasuries 11 c aacb U S Agencies Spee ose EEN Fapa s 12 a 00101 US Agencies Plan Pu Bribe 13 c aacc Mortgage Backed Sec 14 a 00103 Cho s MBS Plan 15 c aacd Municipal Sec Requires 4 numeric plan reference Plan reference numbers are Found on the 16 a 00102 Municipals Compass Plans worksheet 17 c aace Stock 18 a 00219 FHLB Stock EE E 19 c aacf Other Securities 20 a 00250 Corporate Bonds o lt x o cae 21 c aacge Trading Data Reference the data item code In this example D 1002 is our reference code f
234. n the Modeled Mode is the best choice Using the Quick Model to set the Offering Rate automatically calculates the Offering Rate The user simply sets a constant spread or factor percentage to a driver rate Each time the driver rate changes the Offering Rate will automatically change While this is simple and convenient it is important that the planner appreciates the extent to which this approach expresses management behavior as rates change Please note that the Offering Rate only applies to New Balances on accounts with maturities 26 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 The New Model Mode expands the simple single soread approach used in Quick Models to fine tune the relationship over several driver rate levels This is sometimes referred to as a Non Linear model The New Model Mode is a powerful modeling system built around the basic concept of a relationship between a Driver outside influence and the Offering Rate or price your response This relationship may be simple or complex In this example the spread between the 5 year CMT and the Offering Rate changes as the 5 year CMT changes Compass interpolates between rate levels You can also set ceilings and floors or even step the relationship if desired To help visualize what has been expressed in this model click on the Chart button and a graph of the Driver Offering Modeled Rate appears Pricing Model Model Selection f Manual f
235. n Parallel Rate Shock may be viewed in the Financial Compass Reports section Additionally the Non Parallel Rate Shock data may be accessed using the Excel Add In under the Yield Shock Data and Yield Shock Summary Data headings Fy Rate Risk poh ete ALES TS cc Account Market Value Dura fon Gap Yield Shock Summary Data bbe Dynamic GAP Summary eden P NP Rate Shock Duration si Mam sanns NF Rate Shock Income seca s NF Rate Shock Market Value Liability Market Value d bbe HE Rate Shock Rate Detail corned ea NP Rate Shock Rate Proj Analysis E 3 NP Rate Shock ield ac Rate Shock Duration W Substitute Descriptors E Rate Shock Income o pe Rate Shock Market Value Using the assign buttons when a folder i PG Beir i pee p a stn O Rate Shock Regulatory in the selected direction befr Rate Shock Yield ac Risk Tolerance ios Summary Market ValueDura Please be aware that non parallel durations and non parallel market values will not be displayed for any accounts that are flagged as being part of a Hedge in the Account Wizard 75 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 ENSURING RATE SHOCK ACCURACY Rate Shock Accuracy requires attention to a few modeling details e Maturities must be equal to the ending balance Even small differences will cause large errors in rate shock calculations e Pricing models must be used for any accounts that are less volatile in price than
236. n of the line item To create Comparative Graphs right click on the line items you wish to compare and selecting Mark Unmark row for charting After you have selected your items they will appear shaded Next right click and select Build the chart Commercial Insert Page Break Real Estate Commercial Remove All Page Breaks Residential Mark Unmark row For charting Build the chart Clear marked rows Res 1st hit AF Dee Tethdtea AGhdA RA ICL 7 Adjusting the Forecast The following steps should be performed by someone who is familiar with the bank s projected growth plans and current loan and deposit rates A Reports showing Balance Sheet and Income Statements should be reviewed for possible revisions to projected volumes Revise projections in the individual bank To make revisions for a particular unit you must open that branch by selecting Consolidation and enter its DataBridge screen Then click the Account Projections button Select major accounts and adjust projected growth if necessary The Offering Rates Report should be reviewed to verify that prices for next month are close to the bank s current rates for new loans and deposits Corrections are made by selecting Account Projections button Click on the Account Click on the model button in the Offering Rate column and make your adjustments B1 6 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B
237. n reports are set to an Intermediate Level 2 detail If greater detail is needed please go to the unit in question to investigate further Please note that income and yields for Tax Exempt Loans will not be compared on a TE basis as there are no tax rates at the branch level The Income Comparison report will not reflect the income or expense associated with Funds Pools so the Net Income figure may not exactly match Net Income from the branch income statement 121 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 UTILITIES The Utilities Menu contains options that you may not access very often but should review when initially setting up your plan Help Submit Plan to Executrve Dashboard SBU Consolidation Direct Expense Allocations Capital Allocations SBU Chart of Accounts Year End Shitt Zero Out Plan Lock Budget Data Export DataBridge Settings Reporter Extract Risk Compass KPL Policy Editor Database Compact Utility External Tools Options SUBMIT PLAN TO EXECUTIVE DASHBOARD The Executive Dashboard is the reporting capability that creates Internet based point and click analysis at a glance distilled from the vast quantities of information in your Compass If you have elected this feature you will need an Internet connection Click on the Submit Plan to Executive Dashboard option or the Executive Dashboard icon and you fed will be given a message that You are about to send a zi
238. n starts with 20 645 000 and is growing at a rate of 10 per annum The Total column reflects this increase Again the increase each month is proportional with the January 2012 figures remaining the same as the starting point of 20 645 000 has not changed Example of Annual Growth Rate After Edit Funds Quick Edit Manager Branch 01 Branch 02 2011 Manual Manual Manual Manual M anual De Manual C 4 083 a80 7 401 0 687 20 551 0 el2 Jan 4 117 309 T42 ole 0 20 64 Feb 4 14 399 r o4 sMs 20 817 Mar AET 406 f B65 ofl 20 991 Apr 4226 420 foe 0 699 21 166 May 4 256 430 7 944 8 713 71 342 AA Branch 03 Branch 04 Admin Manual Total Select a Quick Edit Option Ok C Constant fe Annual growth rate Eemezl f Ramp to a value C Ramp fromto a value C Offset C Aggregating Offset f Distribute replace existing Manual So Co co c C Distribute as offset Annual Growth Rate 1q dun 4306 0 105 0 666 21 52 Jul 4300 454 026E EAEE 21 695 Aug 4457 473 0 520 O42 Sep 4 451 454 Aei gg Oct 4 526 456 ols O42 Nov 4560 a odd oe Dec 4 607 nee 3 105 g a04 Z a l Last Calculation Results a C co c Total Average Trend In the Annual growth rate edit mode the Total balance projection increases 10 from 20 645 000 to 22 618 000 or 471 000 Each month the increase in total balance has been distributed proportionately between the branches
239. n the market value of the assets and market value of the liabilities It is the bank s liquidation value if assets were sold and liabilities paid off The balance projected for the last day of the month For an account with maturities the EOM balance is the sum of last month s end of month balance new balances generated in the month less Total Maturities The yield of the account as of month end Should be equal to the weighted average yield of all maturities in the account A percentage relationship between driver and a price For example a Factor of 50 would mean a price of 3 if the driver were at 6 and a price of 5 if the driver is at 10 This is the adjustment to yield and margin that accounts for the non taxable or partial taxability of some investments and loans The dollar difference between total rate sensitive assets and total rate sensitive liabilities over a selected period of time Rate sensitivity is the total of maturities amortizations repricings and prepayments during the selected period Risk of a decline in a financial institution s earnings or liquidation value caused by changes in market levels of interest rates The difference between the bank s current net interest margin and its minimum required margin needed to meet all expenditures including dividends and capital formation if needed This is the current competitive rate on new loans within the bank s trade area The Market Rate is used as the
240. n your script from reports templates or snapshots listed earlier in the Reports menu 6 Click Copy for script Delete s Display 7 Right click the script you want to build bie 8 Click Paste into script When you add the first report a small willappear Font next to the script folder you are building You can click the then the name of the report will appear Copy for script 9 Continue this process for each report or chart that you wish to add 10 You can delete items from the script by a right click to the item and then click Delete from the box that appears 11 View a script by double clicking its folder You may then step through reports in the presentation mode ae 12 To print all reports select Print Script from the printer drop down Ja Clicking the Printer button will print the single report currently os ee displayed You can also Export a Script to Excel Excel Snapshot Print Script Export Script to Excel 83 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 QUICK CHART Comparative charting is a great way to communicate ideas especially as an aid in explaining concepts Using raw numbers to explain a cause and effect relationship may prove difficult but with graphs it s simple For this example projected ROA is on a continual decline and the analyst needs to show why The first step would be to bring up the report that contains the items that should be
241. nce Callable Fed Funds Hotes Book Walue Coupon Yield to Call Fre Aine Fizl Bond ID th ds P 7 laturit Call Date i ths Spread Maturity Repricing ousands ate aturity months Date Date 1 S135 79268 1 000 1 70 1 50 04 07 12 i O70 10 07 15 The Callable Tab shows a US Agency security with a Spread set to 10 basis points It has a Call Date of 4 07 12 and a Call Freq months of zero The Book Value is 1 000 000 and the Coupon is 1 70 This security is fixed and does not reprice In the Maturity Tab we see the Book Value showing as a Scheduled Prepayment in April 2012 Ad Scheduled Ad eee Scheduled Scheduled Maturities Scheduled Mats Scheduled PrePrmits Maturities rate Maturities rake PrePrmits rate Dec 2012 Jar Feb Mar U 0 00 U 0 00 U 0 00 Apr U 0 00 U 0 00 1 000 1 50 50 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 This bond has been called because both the Call Date 4 07 12 and Spread 10 criteria have been met 1 70 1 56 14 which is gt 10 Total EOP New Offering Total Maturities Balance Balance Fate Maturities rate 1 000 1 50 Note f you have a security that is only partially callable you can enter that percent of the Book Value in that cell Also if you re run the download and you have a download for the callable data any manual corrections to the callable data will be overwritten If any of your securities have
242. ncreasing and the amounts are re invested at the new lower shocked rate Because Plansmith s Compass is a true simulation model the driver rates are shocked and new rates at the account level are modeled if they are linked with the pricing model If an account is not linked then the predicted rate is shocked by the full amount of the change This could yield incorrect results in the case of accounts like regular savings Savings are often linked in a stair step fashion to recognize the lag in rate movement as interest rates change Rates on savings do not necessarily move in direct relationship to economic interest rates This can have a dramatic effect on the cost of funds since savings represents a significant portion of funding costs Once the account has been modeled it is not only ready for accurate forecasting but it is also ready for rate shock analysis Compass calculates both the total interest for the horizon period and the average yield for the period Which rate is the zero point or base rate for the shock is always a question The rate used is the rate from the first projected month If your plan is updated through the end of July then the offering rate or rate model for new balances in August is used Rates following the first forecast month are not used in the rate shock A 8 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A CAPITAL ADEQUACY REPORT Risk Based Capital Factors are ap
243. nction Buttons m Compass Account Editor File Update Rates Projections Compute Reporting Utilities Help O e O he GYR fie B US Agencies Projections Click Here To Balance Sheet Projections Budget Maturity Variance Callable FedFunds Notes C Assets T Total View Sta rt of S Cash amp Due EOM New Offering Total Matuties Average B Cash amp Cash Items Balance Balance Rate Matunties Xrate Interest Yield Balance Norrlrt Beating Due From Banks Cu rre nt Yea r B Interest Beating Due From Bark 2007 oy Fed Funds Sold Dec 43 952 156 826 417 45 089 B Fed Funds Sold 2007 Jan 43 930 153 136 4 19 43 850 Ey Secwities Feb 43 907 156 314 4 21 44589 E U S Gov t Mar 42894 153 801 4 24 43 502 T B US Treasuy Bils J Apr 43 899 157 893 430 44 026 Scroll U p For B US Treasuries Notes H 2 M Agencies Istory ore B SBA Pools History E Private CMO s E Agency CMO s Noy 39 953 EOM Yield aoe 4 48 40 412 MBS s 148 324 450 39532 E MBS s Var Municipal Sec C h a rt of E Muricipals Mar 38 943 1 003 3 23 1 003 371 144 536 4 45 38 943 2 Taxable Municipals Apr 38 943 1 000 3 27 1 000 4 25 144 005 4 44 38 943 Accou nts S S Stock Ma 38 943 500 3 30 500 3 87 143 322 4 42 38 943 Scroll Down E Equity Securities Jun 38 943 1 002 3 33 1 002 3 98 142 845 4 40 38 94 Other Securities E Other Debt Securities J Other Bank CD s E Other Bank CD s y Gross Unteaiized AFS G
244. nds Pool Out The rate of exchange or Funds Transfer Pricing is defined by the Offering Rate model on that particular account That will determine the yield cost of those funds For historical actual months the Funds Pool Rate is derived from the offering rate prior to updating Funds Pool Rates Kax Thiz form allows pou to edit updated Funds Pool Rates To change the Funds Transfer for historical actual months open the branch department and select Account Projections Right Click for use in calculating updated income expense for the Funds Pool Accounts anywhere within Projections Tab area of the screen and you will see an option for Edit Updated Offering Rates Copy Paste Edit Updated Offering Rates 104 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Select the Edit mode and the Funds Pool Rates box will appear The rate for each month of the current year should be keyed in here Enter these rates for both of the Funds Pool accounts if applicable for each of your branches or departments The rate will assign an income expense for the average balances posted to the Funds Pool accounts in the historical periods designated Remember the future or projected yields costs are determined by the Offering Rate for that month The Funds Pool Accounts are used for balancing each branch or department only so the net effect of the income expense will only be realized when reviewing the branch or depa
245. next to Update for corresponds to the month that you just downloaded A Select Update Financial C For the SBU Capital and Taxes are entered in the Total Bank only Enter Year to Date Earnings if applicable in the EOM and Average balance columns on the Current Earnings line Next verify the Total Capital numbers at the bottom of the screen D If these numbers are correct click on the Save Data button and follow the prompts to Compute All Departments This will add up the data from all the subsidiary plans When the compute is finished select Update Financial You will now validate your general ledger data for the Total Bank If your Capital figures are incorrect do not compute your plans You will need to troubleshoot refer to Troubleshooting in the DataBridge section of the manual and determine why the figures are incorrect E If the Difference numbers at the bottom of the screen are more than 5 ask Plansmith for assistance Otherwise the Difference is most likely due to rounding and you will adjust Other Liabilities to eliminate it Increase other liabilities if the difference is positive decrease other liabilities if the difference is negative Remember ALL adjustments other than capital or taxes need to be made in a subsidiary plan B2 2 F Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B2 Verify that the Net Income shown at the bottom of the screen is equal to the monthly net income
246. ngs that ryypyt can be changed The Default View will display the Securities portfolioand rae Sethe Off Balance Sheet accounts only Selecting Show All Eligible will open all f Default View wi leis Falck accounts for editing Show Activated Only will only display accounts that Show All Eligible have user defined market values entered and Hide Folders will change the Show Activated Only view to reflect individual accounts only 62 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 When entering user defined values click on the box next to the account you wish to activate which will display a check mark and open the account for editing View Settings i Default view Hide Folders Show All Eligible Show Activated Only Save Shock Level 4 3 2 1 0 1 2 3 4 Shock amount during most recent Rate Shock 400 300 200 100 0 100 200 300 400 Balance Sheet Assets Securities U 5 Gov t E US Treasuries U 5 Agencies E FHLB Notes E US Gov t Agencies MBS s e Mortgage Backed Sec 37000 36000 35509 34000 32000 EN Compute Reporting Utilities Help Upon exiting the screen your work will be auto saved from the View Compute the Plan Settings menu Be certain to run all Compute routines so that the Compute Parallel Rate Shock values will be reflected on your reports properly Compute Non Parallel Rate Shock Externally Calculated Rate Shock Values After computing the results wi
247. ning Assets FTE Ratio Interest Expense S s Interest Income S s Interest Soread FTE Ratio Investment Loss Provision S s Loan Fees S s Loan Loss Provision S s Loan Loss Reserve Ratio Loan Asset Ratio Loan Deposit Ratio Net Income S s Net Interest Margin FTE Ratio Net Overhead New Balance of Current Earnings 000 s Non Fed Tax Deductible Non Int Exp S s Non Interest Expense S s Non Interest Income S s Non State Tax Deductible Non Int Exp S s Non Taxable Asset Ratio Pre Tax Net Income S s Previous EOM Balance Current Earnings 000 s Previous New Balance of Current Earnings O00 s Return on Average Assets Ratio Return on Equity Capital Ratio s 3077 s 3058 s 3091 s 3062 s 3055 s 3056 s 3039 s 3042 s 3030 s 3027 s 3035 t 4001 p 5001 p 5002 p 5003 p 5004 p 5005 p 5006 p 5007 p 5008 p 5009 p 5010 p 5011 p 5012 p 5013 p 5014 p 5015 p 5016 p 5017 p 5018 p 5019 i 00001 i 00002 i 00003 i 00004 i 00005 i 00006 i 00007 i 00008 i 00009 i 00010 i 00011 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 EOM Undivided Profits 000 s Earning Asset Ratio Efficiency Ratio FTE Equity Capital Ratio Fed Funds Balance Adj 000 s Fed Funds Income Expense Adj S s Fed Tax Exempt Avg Assets 000 s Fed Tax Exempt EOM Assets 000 s Fed Tax Exempt FTE Int Inc S s Fed Tax Exempt Int Inc S s Fed Tax Exempt Non Int Inc S s Tax Da
248. nk specific prepayment experience and reflect that within their simulation model Through the use of information gathered during the download process Compass compares current month and prior month s balances to generate a prepayment percentage The History Tab is populated monthly to reflect the current month s prepayment experience Historic averages are stored indefinitely and a running total is accumulated with each new month end download Data can be viewed at the account or the category level and all details can be exported to Excel Commercial Term Go to Account Projections Historic Prepayment 1 80 Current Time Pernod Oct 2012 Export to Excel sts Offering Current Prepayment 12 00 9 827 729 64 ees 9 742 056 97 10 775 050 64 10 611 412 70 it 10 Rou 10 743 031 63 OL a 10 737 234 53 He A ge 6 00 10 923 450 30 E 12 388 287 12 Raw 11 639 410 53 2 00 0 00 Feb 2012 Oct 2012 E Prepayment Rate E Historic Prepayment Yi Inzert Edit Delete Use the Insert button to input additional lines of historical prepayment data for periods not stored as history within Compass Model History Instruments aay Offering Current Prepayment Oct 2012 9 027 729 64 Sep20l2 9742 056 947 Aug 2012 10 775 050 64 Jule0i2 10 611 412 70 dunet 10 743 031 63 May 2012 10 737 234 83 Apr e02 10 923 450 30 Mar 2012 12 388 287 12 nh D Principal 11 584 913 11 Offering Rate 5 60 Curr
249. ns Add new location N Remove Modify E Allow Trusted Locations on my network not recommended a _ Disable all Trusted Locations Only files signed by Trusted Publishers will be trusted b Browse for your Program Files Compass folder and select OK Depending on your operating system x64 or x86 the default Compass location will either be C Program Files Compass or C Program Files x86 Compass Microsoft Office Trusted Location e Warning This location will be treated as a trusted source for opening files If you change or add a location make sure that the new location is secure Path C Program Files x86 Compass Description Date and Time Created 3 26 2008 7 12PM Unloading Add Ins from Excel To conserve memory and improve hard drive performance unload Add Ins you do not use often by unchecking the option in the Add Ins available Unloading an Add In removes its features and commands from Excel but the Add In program remains on your computer so you can easily reload it When you unload an Add In program it remains in memory until you restart Excel Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Opening and Sharing Files You cannot run Compass and an Excel spreadsheet containing Compass Add In formulas at the same time nor can multiple people use the same plan at the same time Starting A Spreadsheet or Workbook A streamline ap
250. ns v Floors Asloaded 1 963 441 1 716 038 1 664 780 1 637 939 1 621 458 E S Personal Loans ee E Revised E Installment Loans we Eee kit IES et eis i a end See eee ee J E ED n e am o Change 0 Plan File C Program Files Compass Sample Bank S ample Barik mdb i Eg g 2719 2008 1 40PM_ FENEJAi 1 Compass Manu a Financial amp Budge Ea Compass Accou C GOs m I IN u 1 40 PM Projection Summary and Chart You can project the account balances manually or with the aid of Growth Models investigate maturities and repricings compare projections to budget and even write notes to support assumptions all from this screen The following pages provide a deeper look into the power of the Account Projections and its many functions 17 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 ACCOUNT EDITOR This screen or portion of the screen lets you move around your accounts More than that however this is where you perform several other useful functions To reveal the many account options just right click on any account Let s review these options Add Account will add an account to the chart Select this option and follow Sa 7 i aes the Account Wizard to establish the account s behavior Commercial Le Add Account Delete removes the account and its data from the system permanently C ial L Delet r r pae Maas Once you delete an account all of its data wi
251. nsmith Corporation Simplifying Complexity Last Updated 1 30 2015 Next specify the Aggregation Method to be used in the report writer for displaying year end total or average Data Types Numerator Average Balance ki Denominator Average Balance Aggregation Method Simple average id Last End Of Period value Simple addition Simple average Finally you can select to display your ratio as whole number or Display 2 decimal places by checking the box below Aggregation Method Data Types Numerator Average Balance Y Denominator Average Balance hal Aggregation Method Simple average i Display 2 decimal places SAVING YOUR RATIO FOR USE LATER Once you are satisfied that all the factors are in place you are ready to save the ratio Go to the Save As button in the upper left hand corner of the screen and you will get a box to name your ratio as well as identifying the author Ratio New Ratio Accounts Summary Items a De _ Residential Residential RE Fixed Data Types Numerator Average Balance Residential RE Variable Menam Average Balance Residential RE Yar w Flor Home Equity Loans Aggregation Method Simple Average h Home Equity Loans w Flo 4 Personal Loans wW Display 2 decimal places Installment Loarns Overdraft Protection Lris Ratio Components Nor Acerual Loans F SBA Loans Hon Accrual Loans Comm Lrs Nor ccrual 10
252. nt Number The first column of the table lists all the GL Codes identified Sometimes the codes are more difficult to decipher For example a loan maturity file typically uses a loan type code plus a rate code to indicate whether the loan is fixed or floating plus a non accrual code to separate those loans In order to decide how to map or link the new codes to a Compass account you will need to know the codes unique to your own financial institution which are contained in the DataBridge Specs Workbook you are given during installation To establish the link locate the Compass account in the My Account List table that you want to map to the new code Select the account by clicking on the name then drag and drop it into the Data Goes To column beside the code you want to link To add a new Code use the Insert key on your keyboard or the Add button on the side of the table You can insert the line anywhere and when you Save Changes the Correlation Table will automatically re sort itself You can also select F6 to sort the GL Codes column while in the table To delete a Code click on the Descriptor you want to delete and press the Delete key on your keyboard To print the Correlation Table click on the Print Table button and a report will be sent to your printer Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DISTRIBUTION TABLE SPLITTING GENERAL LEDGER ACCOUNTS A remarkable feature of the DataBridge download is i
253. nt plans 7 File name Sample Bank mdb X My Computer Riles of type Compass Plan File mdb v Cancel B G aon I Open as read only z EE No Complete Plan Path File Name Instititution Name 2 1 C Program Files Compass v8 20 Data Sample Bank 2 Sar Sample Bank 3 2 E Plan List 5 4 Current Plans When you have selected all plans that 5 7 6 you wish to reference select OK on the 4 5 plan list and their path file name and 9 8 6 10 9 7 institution name will transfer to the i Compass Plans worksheet 2 a 0tt a 13 E C 5 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C To create a new workbook with an existing plan list copy the file rename it and then delete all of the sheets but the Compass Plans page You can then add new pages to build your new spreadsheet 35 34 ee saa n 37 h Category Account List allows you to retrieve specific categories account codes from the Chart of Accounts of your Compass plan s Compass 7 Close File Print sforce Connector Menu Commands Custom Toolbars c aaa a 00001 c aab a 00002 c aac 9 c aaca CON DW RB WN ie 10 _a 00100 E 4 Cash amp Due 11 c aacb E 9 Fed Funds Sold 12 a 00101 H B Securities QO Loans 13 c aacc _ Loan Loss Reserve 14 a 00103 15 c aacd Investment Loss Reserve 16 a 00102 E E Goodwill E aS 17 c aace 18 a 00219
254. nth 4 All cash flows are discounted until the last dollar of principal and income is collected on the existing Tea ETE aan Rear er ae Rp portfolio For some accounts this amounts to just a few Market Value and Duration months for others more than 360 months of a repayments must be considered For adjustable rate wv Use WARD Calc i accounts repricing balances can be included as cash w flows by selecting yes to using the Weighted Average Repricing Date WARD in the Account Wizard setting Account Wizard Residential Reside More Info Cancel Back Next gt Details of the market value calculation can be seen in the Account Market Value Duration report in the Reports area of Compass You will be prompted to select a specific account and target date for review EXTERNALLY CALCULATED RATE SHOCK VALUES If you prefer to define any of the rate shock points you can manually Reporting Utilities Help enter them by selecting Externally Calculated Rate Shock Values from Compute the Plan the Compute menu Two options are available Market Values and Inc Exp Forecasts For Market Values we recommend that you use market values supplied from a reputable source such as your broker or bond accounting software when choosing this option Compute Parallel Rate Shock Compute Non Parallel Rate Shock Externally Calculated Rate Shock Values m m For Market Values at the top left of the screen there are View Setti
255. o Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 SCRIPTS Scripts are used to prepare a slide presentation or a group of reports to be printed in a batch You can even include charts and graphs from the Account Projections area of Compass or instant charts from report lines or columns if you take a Snapshot of the graph that you want by selecting Snapshot from the Print button drop down Reports and Graphs selected directly from the report menu will update themselves each time that you complete your plan You can save as many scripts as you need Create impressive presentations Soeed up the monthly process of preparing Board or ALCO reports to within a few seconds Actual printing may take longer but you can continue working on the same computer while the printing process continues Note Graphs and reports added to the script from the Snapshot area will not update themselves To update a report or graph select a new snapshot delete the old snapshot from the script and add the new snapshot to the script Steps to Create a Script Script 1 Click the Reports button ee ssa 2 Scroll down to the Reports Directory to the Scripts folder I Board Report 3 Double click lt Create Script gt Script Name 4 Give the script a name and click the OK button The new pero es te script will appear as a subfolder entry era 5 Right click the first report you want i
256. o an individual report Others are found in nearly all reports To access Report Properties right click on the name of the report and then select Properties from the list that appears Below is an example of a Report Properties box Choose from 5 preset Levels of Detail Choose Monthly Quarterly Annually Express as a Gross up Tax Exempt Income Choose Rounding Print from Budget Tab Report Properties Income Statement Level of Detail Summary Date Range Reporting Period Monthly Thisyer Select Any Preset Last ear month This quarter DateOptions or Calculate Mix No Next Quarter Customize your FTE Adjusted No gt Own Date Range Include line totals Yes gt Include ratios Ves Page break after income Yes Year to Date Ho Report in Thousands No Budget Ho Header Cancel Save As Save Preview Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 HEADERS AND FOOTERS l Report Header Footer Designation Headers and Footers can be totally customized by Enter the desired header and or footer text in the spaces provided The clicking the Header button in the Report Properties bottom of the form contains a list of special markers that can be used to box Include additional information within the text Title kPlaiName gt Markers allow headers and footers to automatically subutle 1 Income Statement update with new information Markers must be Sub
257. o create Growth Models using the Dept View Tab To remove the models from all branches click on the Modeled button over the Total column You ll get a prompt to set all Departments to Manual editing Select Yes and you ll see all modeling buttons reset to Manual Confirm Change i Do vou want bo set All Departments to Manual editing Highlight the months that you wish to change in the Total column Right mouse click and select Quick Edit Choose the Quick Edit function that you want to use refer to the Quick Edit instructions located in the Account Projections section of the manual Click OK As your Quick Edit is being spread over a number of branches it is important to see how the particular edit applies to each branch CONSTANT Using this option in the Dept View Tab each highlighted cell in the Total column will be changed to the value you select If a branch has data in the months edited it will receive a proportionate amount of the increase or decrease to reach the new total amount Example of Constant Before Edit Quick Edit Annual growth rate Cancel Ramp to a value Ramp from to a value Select a Quick Edit Option Ok Offset Aggregating Offset Distribute replace existing Distribute as offset Constant Last Calculation Results Total Average Trend Projections Budget Varance al D ept View i Hotes La Branch 01 Branch 2 Branch 03 Branch 04 Admin Funds Manager Tota Manual
258. o create a value change to accounts using a decay rate it may be necessary to choose an Alternate Discount Rate in addition to the Decay Rate The use of an Alternate Discount Rate means that the price on the product offering rate is not used to value the instrument The value of the instrument is derived from the difference between the price on the product what you pay and the market if you were to borrow similar term money Essentially you are matching the discount rate to the average life of the instrument For example if the Decay Rate on NOW accounts is 78 months the average life is one half the decay rate or 39 month or 3 25 years In this example the alternate cost for borrowing money at a similar term would be at the 3 year rate In the Account Wizard the Alternative Discount Rate would be set to the 3 year CMT You may be asked by your examiners to use a borrowing rate such as an FHLB rate for a similar term To model this you will need to set up a new Driver Rate in the Rate Forecast screen and manually key in the Driver Rates Account Wizard HOW Accounts NOW Accounts IF pou want to Override the account Discount Rate choose an alternative here Alt Disc Rate 3 yr CMT Y 3 yr CMT B pr CMT 1 mo LIBOR 3 mo LIBOR 6 mo LIBOR Cancel 79 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 REPORTING Literally thousands of reports and graphs are instantly available in Compass Notice the templ
259. o o6 on 082 O0 352 35 your Driver Rate listing ie 0 10 0 10 0 10 0 20 0 50 0 90 1 70 2 80 3 70 3 30 Jun 0 10 0 aA O20 a aa Q 3 77 3 30 Jul 0 10 0 1 Add a New Rate 3 83 3 30 tes ae F nter the name of the rate you want to add in the box a E a AT 5 shale then select the add Rate button Add Rate TS E Dec aig O Sa 2015 Jan 0 17 0 7 4 07 3 30 Feb 0 20 0 2 0 20 0 40 1 00 1 43 2 30 3 30 4 10 3 30 Rate yr CMT adi d ha Driver Calc To set up the Driver Model select Driver Model from the top of the Rate Edit forecast screen Then bring up the newly created driver from the Rate menu n l Rate Commercial Floating Driver PRIME Modeling of the New Driver rate should capture the characteristics of the cai L u account to ensure that the Rate Shock Gap and Projections will reflect the true Edit Modeled rate behavior of the portfolio In this example the Commercial Floating Rate loan portfolio has an EOM Yield for June of 9 indexed to the Prime Rate Prime as Repricing of last month was at 8 That means that the average spread to Prime comes m to 100BPS and the model can be set up accordingly Be careful as the EOM Yield may not indicate the true spread of the entire portfolio Additionally the Maturity Tab reveals that the weighted floor on the portfolio is 7 23 with a ceiling of 21 Pricing Model Hodel Selection Ok Driver 0 00 6 00 6 01 Seg 20 00 30 00
260. ock Yield report Reviewing the output below ze the beta model of 1 in rising and falling is behaving as expected Ae Gehan The model also had the spread of 1 90 applied when Prime reaches Geg Driver Spread Hate zero and that is reflected too 0 00 0 00 0 00 0 00 1 30 1 50 3 25 1 30 9 75 100 00 1 90 101 50 no A00 300 200 100 0 100 200 300 400 HELOC 150 215 316 416 516 616 716 Of 917 T ma I dd Insert Delete Clear 37 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Maintaining the Models Offering Rate Going forward this account s price will change in accordance with Prime rate changes as Modeled the beta is 1 This may change over time as more history is accumulated To update your model simply open the model by clicking on the Modeled button Click on the Beta button then Ok on the Beta Dialog box This will update your model with the latest price and rate index information We suggest you perform this function regularly monthly or quarterly You should also double check the Value correlation as that will also change over time 99 PRIME Pricing Variances In the case of the HELOC account what if you are now charging Prime 2 75 instead off Spread Prime 1 90 In that case just set up the model and adjust the spread manually We FS Spread Facter z recommend noting the manual override of the beta using Plan Notes Beta Create P
261. ode xxxxxx in Line nnnn in the extract file file name is not in the table name Correlation Table and cannot be downloaded Please refer to the Monthly DataBridge Operation in the DataBridge section of the manual for help in making these corrections Any other errors should be referred to Plansmith for explanation If you make any changes to the Correlation Tables repeat steps 2D and E from the Total Consolidated plan You may also re run the DataBridge on the individual unit Make sure the month and year are correct Data Validation After all the error codes have been resolved and the DataBridge re run open each subsidiary plan and validate the data A Select Update Financial B C Verify the month next to Update for corresponding to the month that you just downloaded For the each subsidiary plan enter Year to Date Earnings if applicable in the EOM and Average balance columns on the Current Earnings line Validate the financial data for the plan by reviewing the Balance Sheet and Net Income totals at the bottom of the screen If the data is correct select Save Data and follow the prompts to Compute the Plan D After validating the data on each subsidiary plan return to the consolidation screen Select Add em Up Re compute Individual Plang prior to Add em Up Add em Up Budget Balances Only This will add up the data from all the subsidiary plans When finished select Update Financial You w
262. og under the Consolidation section of the manual 5 A Click the Compute a Parallel Rate Shock button ay Make sure that you choose the appropriate shock time horizon and shock increments and whether you want a ramped rate shock The shock time horizon and shock increments that my bank has chosen are B Click the Compute a Non Parallel Rate Shock button 2 Click Yes to update default yield scenarios and projection formulas Make sure that you choose the same shock time horizon as your Parallel Rate Shock Compute The shock time horizon my bank has chosen are 6 At this point you are ready to print history variance gap and rate shock reports A Click the Reports button B Double click on the report you wish to view C If you need to change any report properties like dates covered level of detail etc right click while the mouse pointer is on the report name on the Directory list on the left side of the screen and select Properties B1 5 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 Financial Reports Balance Capital A Display Income gt 2 Rate Risk Properties Font d Account Dynamic Copy For scripti T Gap Rate Sh N D Click on the picture of the Printer to print the report If you want to graph any line item or total double click on the description of the line item If you want to graph any line item or total double click on the descriptio
263. ome Income Income Income Income Income Income Growth Growth Growth Growth ay 9242 6496 7 070 3770 2717 2 853 2 995 3145 3 303 3 46 un 7 649 6 041 6 940 4 574 2 864 2 997 3147 3 304 3 469 3 64 ug 8 504 5 68 5 667 3433 3 051 3 204 3 364 3 532 3 703 3 89 ec fades Dadar J232 2ga 3 001 3991 4 191 4 400 4 620 Total 35 471 foot 0 374 59 574 36 64 30 604 40 533 42 560 44 607 46 922 In the example above a New Month from previous Month growth model has been created to show the effects of increasing growth from 5 to 25 over a 5 year period We entered a 5 growth rate for 2008 10 for 2009 15 for 2010 20 for 2011 and for 2012 we entered 25 Notice that the growth percentage for each year is applied to each monthly figure from the previous year s monthly data For example the amount of 3 548 in January 2008 is a 5 increase over the January 2007 income of 3 379 the January 2009 income of 3 725 is a 10 increase over January 2007 income of 3 379 and so on Income Expense Model Hodel Selection C Manual C Fee Model f Annual Growth Rate f New Month from previous Month e Seasonal Growth Another way to reflect seasonal effects is to enter different rates for selected months within a particular year As in the previous example this model will apply the designated percentage to the income expense figure in the same month from the previous year In the example to the right a 10 growth rate will be applied to May
264. on of shock levels for Risk Compass users These Upper ao ko Z ao shock levels will be used in the Executive Summary page Hoe Parallel E T of your Risk Compass Please check your interest rate Maximum Percentage Change oo foon risk policy before selecting the appropriate level Once U the limit is set it will be retained until you change it OK Caneel Models Preferences Models General Chart of Accounts Dividends Reports The Models tab controls the pricing model editing ona Models Last Files List Fonts Date Formats universal basis If you will be the sole editor of pricing models enter your name here and each pricing model poe autto Peter Planner you create will contain your name We suggest you leave Pricing edit mode Spread Factr the Pricing edit mode set to Spread Factor as you may Maximum rate axis setting for wish to have both options available when creating Modeled rate iz models The Maximum rate axis setting should also be left to the default 12 unless you wish to change the chart view of your models Driver rate 1 2 Cancel Last Files List Preferences Last Files List General Chart of Accounts Dividends Reports Use the Last Files List to delete the location of any old Tae ie Ge ae ee plans you do not wish to have appear in the Select a Plan File box when you first open the program This selection Planfiles RateWorks files does not delete the actual
265. onth OFFERING RATE REPORT Monthly Offering Rate on Individual Accounts Offering Rate Column Monthly Value Quarterly Offering Rate on Individual Accounts Weighted average of Monthly Rates for period Sum of New Balance for Month Total New Balances for period Monthly Offering Rate Annual Offering Rate on Individual Accounts Weighted average of Monthly Rates for period Sum of New Balance for Month Total New Balances for period Monthly Offering Rate A 21 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Avg Monthly Offering Rate on Subtotals and Totals Weighted Average Rate for all accounts with New Balances Example Weighted Offering Rates are determined by calculating each account s percentage of the Total New Balances for the period multiplying that percentage by the account s Offering Rate for that month and summing the results for that total or subtotal Offering Accounts Rate New Bals of Total New Balances Rate Comm Loans Fixed 7 50 297 0 0932788945 0 699591709 Comm Loans Adjust 7 50 121 0 0380025126 0 285018844 Comm Loans Floating 8 00 1 081 0 3395100503 2 716080402 Floor Plan Loans 8 00 1 685 0 5292085427 4 233668342 Total New Balances 3 184 Weighted Average 7 934359297 Offering Rate Note Report selection FTE Yes will adjust Federally Tax Exempt accounts Offering Rate by multiplying by 1 51515 for Federal Nominal Tax Rates of 34 or
266. or EOM Balance Date type the date in any cell The date can reflect previous periods or the most current update period The format of the date should be Month Year Sep 08 Cat Acct Ref Proj Budget Ref the Compass function that references the category account In this example c aaa is the code for Cash amp Due Plan the line number of the Compass plan from the Compass Plans page which in this example 1 If using multiple plans change the plan number A B c D E S 2 1 d 1002 EOM Balance Once the arguments are 3 completed click OK and the cell Alcaaa Cash amp Due 4292 183594 will populate with the data 5 a 00001 Cash and Due From Banks referenced 6 c aab Fed 7 ja 00002 Fed Funds Sold 5 9 C aac Securities c aaca U S Gov t 4 ri ANIN LIC Tem m mai m e Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Copying Formulas to other Cells After a formula is entered in a cell the formula can be copied to other cells eliminating the need of creating a formula for each cell In Excel the sign holds a position To copy a formula remove the sign from the cell reference in the formula bar In this example cell A4 contains the data that needs to be updated while the other arguments remain static Delete both signs in the formula bar referencing cell A4 9 X f cmpDataValue F 2 5451 9464 1 SLIM A 1 Dec 08 2 1 C D E d 1002 EOM Balan
267. or reports ADDING NEw CODES Plansmith constructed your DataBridge by using up to five codes from each download file to identify how to distribute the data to Compass accounts These codes are called descriptors All combinations of these descriptors that were present when Plansmith created your download were loaded into a list called a Correlation Table There may be as many as eight Correlation Tables but many institutions will not use all eight Select Table to Edit Correlation Tables cross reference your code combinations to Balance Sheet Income Espense your Compass plan s Chart of Accounts In your Compass Correlation Table Correlation Table l plan a balance sheet account carries all balance interest income and rate information within one record Therefore Investment Maturity Investment Repricing the same Compass account may be used in the balance Correlation Table Correlation Table income and maturity Correlation Tables Loan Maturity Loan Repricing Correlation Table Correlation Table The table names are already included in your individual custom file specification The tables have been designed to be as efficient as possible for your institution taking into Deposit Maturity Deposit Repricing Correlation T able Correlation Table consideration the requirements of Compass and the quality of your data center extract Therefore the tables you receive are a good starting point and most users find no need to Distribut
268. orts Models Last Files List Fonts Date Formats Year Month 2008 January 500 February March April 500 May June July Manual Enter the expected payout as a positive number in the Dividend grid The example to the right is for a quarterly payout of 500 000 oO M Compass will not allow the entry of negative numbers into the Dividend grid Preferences Dividends General Chart of Accounts Dividends Reports Models Last Files List Fonts Date Formats Method Percent of NetIncome Frequency Quarterly v First month January Percent of Net Income Payout is based upon YTD Net Income for the prior year Payout is in Dividends Projections even amounts per the period selected Projections Budget Variance Fei New Average Balance Balance Balance z Net Inc Preferences Dividends General Chart of Accounts Dividends Reports Models Last Files List Fonts Date Formats Method JPEE Frequency Quartely v First month January Excess Equity Payout Dividend is paid based on Utilities Options setting for Min imum Equity Ratio Payout Occurs when Capital Asset Ratio exceeds minimum set Frequency determines when next payout occurs For example if payout is quarterly then the April payout is based upon the Dividends Projections minimum equity position as of March Projections Budget Variance Fed EOM Hew Average OK Cancel Bal
269. otal Loans in two ways 1 By placing the cursor over the row and typing 2 Using the right mouse function to Add Edit Text function Example 2 Creating a Ratio of Commercial Loans to Total Loans Ref Description Data Type E F o G H J k L Jan Feb Mar Apr May Jun Jul Aug 2007 2007 2007 2007 2007 2007 2007 2007 l 2 Commercial 3 aadba Total Commercial TarBal 148 201 152 309 149561 149 994 146441 150 830 155 129 150 248 4 aadb Total Residential TarBal 19920 19 911 20 234 20 728 20 199 19844 20 252 19 817 5 ade Total Personal Loans TarBal 1 181 1 325 1 116 1 113 547 685 572 565 5 aad Total Loans TaBal 236 303 236 723 230 899 233 025 234785 239 124 241 413 232 450 T LT al Select the Ratio function from the right mouse click menu Formula Editor Meg Please enter the ratio description Commercial Loans Enter the Ratio below Row Humber 3 Row Number 6 100 A k Cancel In this function the row number is simply the row number and does not require the R Also note that the ratio or row name is entered here Select OK and the calculated value will be placed in the highlighted row Ref Description Data Type E F G H J K L Jan Feb Mar Apr May Jun Jul Aug 2007 2007 2007 2007 2007 2007 2007 2007 l 2 Commercial 3 aadba Total Commercial TarBal 148 201 152 309 149 561 149 994 146 441 150 830 155 129 150 248 4 aadbb Total Residential TarBal 19920 19 911
270. ou open Compass you will be asked to Select a Plan File The last plan file that was used will be shown at the top of the plan window Select a Plan File Open the highlighted plan listed below or select Browse to navigate to a different plan C compass Plan Files All Versions 8 3 0 V830 Data Webinar First National Bank mdb As you wo rk with other p lans their q Plan Path Example Long Path to My Plan Files S ample Plan Path For New Compass version 8 3 0 Data Beta 1 name an d pat h wi a Iso a p pea r j nt h e n Plan Path Example Long Path to My Plan Files S ample Plan Path For New Compass version 8 3 0 Data Beta window You can click on any other plan within the window and then click the Open button to load it Open Browse Cancel Use the Browse button when you need to find a plan not in the list You may need to do this when you first load Compass onto a new computer or if you change the location of your files Temporary Files Regardless of the method that you use to select a plan Compass will copy your selection into temporary files the name of the permanent file is still shown on the status bar That means that you can be comfortable in experimenting Nothing you do will change the permanent plan until you save the data You will be prompted to save when you quit Compass but you can save at any time by clicking the Save Plan button or selecting File then Save from the pull down menu Compass updates t
271. our balance sheet and prebuilt totals and ratios for use in setting up the Indicators Editing Area fs EPI Categories Profitability KPI Categories are measurements against target values that are individual goals or Efficiency Ratio FTE Delete Asset Management Data Type E aming A Rati benchmarks In order to create your E Up automat al KPIs just select the item from the ena a Don M Over Target is Good Accounts Summary Items on the left Break Even Yield Bad Efficiency A atio FTE hold down the left mouse button drag Liquidity ee i 5 arge AUE the item to the KPI folder and release E T Ta pial Adequacy Growth On Target value 70 00 the mouse Next enter the On Target Value Now click on the Over Target is Good box if this applies For example if you drag the Efficiency Ratio from your KPI list to the Operating Efficiency folder you would enter your benchmark say 70 and leave the Over Target box unchecked as it is better to be under that value Select Save to save your changes Save 126 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 If you wish to use ratios that do not appear on the Summary Items list use the Ratio Designer refer to this section of the manual and they will be saved at the bottom in the Custom Ratios folder Simply drag and drop them to the corresponding folder re Policy Categories Bi ERE L
272. our report see Polishing the Report Select Done to exit this menu A G D Account Category List ee Cacia Due Select Plan Training Bank Ma pa 2 c aab Fed Funds Sold ae _ Assets 3 c aac Securities Hl Cash amp Due 4 c aaca U S Gov t E Fed Funds Sold 5 c aacb U S Agencies E L Securities 6 c aacc Mortgage Backed Sec eem soam iss E I Loan Loss Reserve 7 c aacd Municipal Sec E P Fixed Assets 8 c aace Stock E C Investment Loss Reserve 9 c aacf Other Securities O Goodwill 10 c aacg Trading Bb OREO E Time Dep Other Instit ji c aach Gross Unrealized AFS G L m 12 c aad Loans C Selected Category Account i As 13 c aada Commercial C Subcategories Accounts es E 14 c aadb RealEstate All Subcategories 15 c aadba Commercial All Subcategories and Accounts Assign 16 c aadbo Residential Include Plan Reference 17 caadc BMGR Advances gt Substitute Descriptors 18 c aadd Personal I Indent Levels Done 19 c aade Acquis Develop Const 20 c aadf Other Loans 21 c aae Loan Loss Reserve 22 c aaf Fixed Assets 23 c aag Investment Loss Reserve 24 c aah Goodwill 25 c aai OREO 26 c aaj Time Dep Other Instit 27 c aak Other Assets Example B Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX C Data Item List includes Category Account Data Tax Data Compute Summary Data Gap Data Rate Shock Data and Inte
273. p 13 000 2343 2 500 2 000 a i es ae Oct 13 000 2 460 2 500 2 000 Offset Nov 13 000 fiat 2 500 2 000 f Aggregating Offset Dec 13 000 2 394 2 500 2 000 f Distribute replace existing 2007 Jan 13 653 2 Daz 2626 2 100 C Distribute as offset Feb 13 652 2551 2625 2100 co co m S G n A G a G E m cc 77 20 946 nea a May 13 651 2604 262 2100 Juri 13 650 2 622 2 625 2100 z Jul 13 650 2 640 2625 2100 ae Aud 13 649 2657 2625 2100 ee Sep 13 648 267 2625 2100 Oct 13 648 2 694 262 2100 Nov 13 647 2712 2624 2100 Dec 13 647 2729 2 B24 2 100 20 997 21 014 21 031 21 049 271 066 21 083 21 100 Last Calculation Results Coco coycoycm Z 2 a Cc After editing each cell in the total column has an additional 1 000 The additional 1 000 each month has been distributed as before with each branch receiving its percentage according to its share of the total volume before the edit For example Branch 01 had a previous January 2007 expense of 13 000 65 29 of the previous total of 19 911 and has received 65 29 the additional 1 000 000 to bring its new total to 13 653 AGGREGATING OFFSET The Aggregating Offset option is similar to the Offset edit except that the addition or subtraction increases by the same amount each month of the projection In this example the first month has 1 000 added the second 2 000 and so on Example of Aggregating Offset After Edit Branch 01 Branch 02 Branch 03 Branch 04
274. pass model takes this into account 20 Account Properties Editor Commercial Adj Name Abbreviation Commercial Adj il Risk Based Capital factor kd Custom RBC factor Doo Cost factor io sd Payment frequency Monthy Tax status Taxable Accrual method Actual Number of Days 365 Average term for new transactions months First Time to repricing months Next Time to Repricing months Absolute floor 7 laa Ceiling 5 Relative floor 7 5o Ceiling so Penodic cap 4 5 Ok Cancel Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Two tests are performed to determine if a Repricing Balances red flag for Projections Budget Maturity Repricing Bals exceed EOM or are less than EOM minus Sched Mats will be displayed The first test is to make sure that the Scheduled Repricings do not eeu se ae EEA Repricings rate exceed the last EOM balance in the account Using the previous Commercial Adj account as an example we see the EOM balance last month of 2 728 Using the Calc Total Avg amp Trend by highlighting the group of cells and right clicking to display you can easily check that the Total Scheduled Repricings equals 1 808 The first test has been met The amount of Scheduled Repricings does not exceed the last EOM balance User Edit Total AYErage Trend Account Properties Editor Residential RE Adj Name Abbreviation Risk Based Capital factor ole
275. pass provides many tools that allow you to test strategies for reacting to interest rate changes Three entirely different rate projections can be maintained in a single rate file called RateWorks mdb All Compass plans in a single folder will obtain rate information from the RateWorks mdb file in that folder Additional rate projections can be added without limit by making copies of plans in other folders each folder can contain only one RateWorks mdb file The Rate Forecast area allows you to input historical and future rate projections from a variety of sources Compass refers to these rates as Driver Rates because they influence the financial institution s decision making They are set by the market and are beyond the control of the individual financial institution Your financial institution reacts to these according to its strategy This strategic reaction is referred to as pricing and is discussed in detail in the Account Projections section of this manual There is no limit to the number of Driver Rates that you can use Compass has 22 preset Drivers You can add more but it may be acceptable to use only one or two driver rates If virtually all of your pricing changes occur as a reaction to Prime then that s the only Driver you need To add additional Driver Rates select New Driver from the top set of buttons If you wish to rename a driver click on the name then select Rename Driver Plansmith provides two methods for upd
276. ple below we want to show the Loan Fee income varying by rate shock increment Financial Compass does not model this so you will need to key in your externally calculated values into the Inc Exp Forecasts grid Remember that the rate shock was run for a two year period so the income figures should be the sum for two years Market Values Inc Exp Forecasts View Settings Default View C Show All Eligible Show Activated Only Hide Folders Shock amount during most recent Rate Shock Non Interest Income Loan Fees Non Interest Expense Loan Loss Provision 400 200 150 100 50 100 200 300 1 135 200 1 135 200 1 035 200 935 200 835 200 735 200 635 200 535 200 535 200 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A If you choose to enter Externally Calculated numbers into any line item e g Loan Fees you will need to key in values for ALL rate shock points After typing in the numbers run the Compute the Plan and Compute Parallel Rate Shock and Compute Non Parallel Rate Shock The figures entered will now show in the Rate Shock Net Income report Rate Shock Net Income 2 Year Rate Shock Income 200 150 100 50 0 100 200 300 400 Interest Income Cash amp Due 1 108 1 108 1 108 1 108 87 248 973 910 1 660 687 2 747 792 3 634 763 Securities 7 650 409 8 003 385 7 212 954 7 076 74 8 608 940 10 657 320 12 297 460 14 014 710 15 774 260 Loans 67 044 360 67 763 500 68
277. plied through the Account Wizard settings Choose a defined percentage e g 0 100 a Custom percentage or a Custom percentage by Month Disallowed Reserve Total Loan Loss Reserve less 1 25 of Total Risk Weighted Assets or 0 if the result is negative Tier 1 Leverage Ratio Total Tier 1 Capital Total Assets for the Leverage Ratio 100 Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Tier 1 Capital Ratio Total Tier 1 Capital Total Risk Weighted Assets Disallowed Reserve 100 Total Capital Ratio Total Tier 1 Capital Tier 2 Capital Total Risk Weighted Assets Disallowed Reserve 100 Capital Conservation Buffer Applied to periods starting January 2016 Lowest of three calculations Common Equity Tier 1 Capital Ratio Common Equity Tier 1 Plus Capital Conservation Buffer Tier 1 Capital Ratio Minimum Tier 1 Capital Plus Capital Conservation Buffer Total Capital Ratio Minimum Total Capital Plus Conservation Buffer CAPITAL RATIOS REPORT Common Equity Tier 1 Base Automatically Included Common Stock Surplus Undivided Profits Current Earnings Dividends Goodwill Optionally Included based on Capital Classification Setting for each account Borrowed Funds Preferred Stock Capital Notes Net Unrealized AFS G L Other Capital Common Equity Tier 1 Capital Common Equity Tier
278. ppear on the screen 5 Click the Compute a Parallel Rate Shock button wil Make sure that you choose the appropriate shock time horizon and shock increments and whether you want a ramped rate shock The shock time horizon and shock increments that my bank has chosen are Click the Compute a Non Parallel Rate Shock button 2 Click Yes to update default yield scenarios and projection formulas Make sure that you choose the same shock time B 4 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B horizon as your Parallel Rate Shock Compute The shock time horizon my bank has chosen are 6 At this point you are ready to print history variance gap and rate shock reports Click the Reports button b Double click on the report you wish to view d c Ifyou need to change any report properties like dates covered level of detail etc right click while the mouse pointer is on the report name on the Directory list on the left side of the screen and select Properties Financial Reports Balance Capital A Income mel 2 Rate Risk Properties Font Account rele Copy For script T Wap Rate Sh N d Click on the picture of the Printer to print the report If you want to graph any line item or total double click on the description of the line item If you want to graph any line item or total double click on the description of the line item To create Comparative Graphs right
279. pped copy of your Plan and RateWorks files to the Plansmith Website for use in the Executive Dashboard Before this is carried out all unsaved changes will be saved Is it OK to transmit your files Select OK if you wish to have any changes saved and your plan submitted to the site When the plan has been sent you will receive a Transfer Complete message Select OK You are ready to go out to the Executive Dashboard website and analyze your plan The site is http www plansmith com dashboard2 An email will be sent that will include your Username and Password so you can log in to the Executive Dashboard website Please also refer to the KPI Policy Editor section located further in the Utilities section of the manual SBU CONSOLIDATION This selection will take you to the Consolidation screen or click directly on the Consolidation icon Please refer to the Consolidation and Strategic Business Unit sections of the manual for details on these plan setups 122 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DIRECT EXPENSE ALLOCATIONS See The Strategic Business Unit Planning Model for detailed information CAPITAL ALLOCATIONS SBU See The Strategic Business Unit Planning Model for detailed information CHART OF ACCOUNTS Make changes to the Chart of Accounts list using the same options available in the Account Projections screen such as Add Account Cut Move accounts and the Account Wizard by rig
280. pread of 1 90 is needed in order to obtain the starting rate of 5 15 3 25 1 90 Note the chart depicting the relationship between the two rates In the case of the HELOC account it shows no change in the two rates Other account data may show Jul 2009 Mar 2011 sunen zuge sted fluctuations in both price and index over time yet still reflect a ee SAE FEMS valid correlation This image is useful in describing what the Pivot 3 29 3 29 relationship has been and can give a better understanding of the Spread 1 50 1 30 historical relationship Rising Beta 1 00 1 00 Falling Beta 1 00 1 00 Pricing Model Applying the New Model mis E By lu nknown On 06 28 2011 In order to apply the New Model click on Save As and give the model By a name We suggest using the term Beta in the model name in order On 06 28 2071 to differentiate it from other models you ve created Click Ok to apply this name Ok Cancel Pricing Model Model Selection The model you have C Manual just created will behave like other New Models in the software eae Financial Compass automatically accounts for the Driver going to Meoma S zero and rising to 100 in order to accommodate any level of interest rates Click Ok to apply this model to the account Driver PRIME GUAE 754 We also suggest reviewing the model performance with rates nen me ha changing to ensure the assumption is reasonable A good tool is to i m look at the Rate sh
281. proach for building spreadsheets developed in the Excel Add In for Compass is to use the shortcut methods available through the Compass Menu and User Defined Functions described below The Compass Menu Build Edit Plan List lets you reference the plans you intend to use from the Compass menu Click Yes on the Create Sheet box that next appears Category Account List Data Item List Create Sheet Account Properties No Compass Plans worksheet was found in the active workbook This worksheet is required in order to use the Compass i 7 Addin Do you want to create the Compass Plans worksheet now Data Wizard No No Complete Plan Path File Name Instititution Name The Add In will create a worksheet titled Compass Plans A dialog box will open allowing you to add one or more Compass plans to the list Plan List Current Plans Wie Nan Wn amp lWihN e Locate a Compass Plan Database Click the Add Replace button Next use the Look in box to ae a ace find the folder or path where the Compass plan that you Branchi m 2 Seeger want to use is located When you locate the plan file select ald or double click it and the plan path and name will be added 2 BranchS mdb B Branch6 m r piece under Current Plans in the Plan List box Repeat this process 2 Operations mdb Rateworks mdb until your list includes all of the plans that you might want to use up to 99 differe
282. puted by dividing the Net Income by the Average Assets The Net Income is first divided by the number of years in the shock to get an annual income number If the shock period is two years divide Net Income by two three years divide by three etc As the rate shock analysis is a no growth scenario the Average Assets are the same as the last actual month s ending assets Return on Average Equity is computed by dividing the Net Income by the Average Equity The Net Income is first divided by the number of years in the shock to get an annual income number If the shock period is two years divide Net Income by two three years divide by three etc As the rate shock analysis is a no growth scenario the Average Equity is the same as the last actual month s ending equity Taxes are calculated using an effective tax rate derived from your forecast In this example the income statement projected total for Operating Income from March 2014 through February 2016 is 35 540 034 Federal Taxes are also forecasted in Compass as 11 373 238 and State Taxes are 1 822 510 Tax Information 2014 2015 2016 State taxes Rate 5 00 5 00 Federal taxes Rate 35 00 35 00 35 00 Federal tax credits 0 00 0 00 0 00 Federal tax loss carry forward 0 00 0 00 0 00 Other adjustments State 0 00 0 00 0 00 Other adjustments Federal 0 00 0 00 0 00 Should state taxes be distributed according to net pre tax income Should federal taxes be distributed according to
283. quity Unrl Gain Loss Goodwill 100 EOM Equity EOM Assets EOM Equity EOM Assets 100 Equity Growth End Equity End Capital Notes Beginning Equity Beginning Capital Notes 1 100 GROWTH Asset Growth Ending Assets Beginning Assets 1 100 Loan Growth Ending Loans Beginning Loans 1 100 Demand Deposit Growth Ending Demand Deposits Beginning Demand Deposits 1 100 Volatile Liability Growth Ending Large CDs Fed Funds Purchased Borrowed Funds Beginning Large CDs Fed Funds Purchased Borrowed Funds 1 100 Time Deposit Growth Ending Time Deposits Beginning Time Deposits 1 100 RATE VOLUME CALENDAR VARIANCE ANALYSIS The Rate Volume Calendar variance attributes the income or expense variance to a combination of balance rate and accrual method differences By holding two variables constant the variance due to the third variable can be calculated Rate Volume Calendar Calculations Income Difference Due to Volume Actual Average Balance Budget Average Balance Budget Income Budget Average Balance A 25 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX A Income Difference Due to Yields Yield Variance Budget Balance Days in Month Days in Year 10 Income Difference Due to Calendar Actual Calendar Days in Month Budget Calendar Days in Month Budget Income Budget Calendar Days in Month Mix Diff
284. r FT Emplopees Number PT Employees Number SPT Employees Custodians Couriers CNB Mortgage Number of Shares Number of Shares Other Memo Items Pledge Securties Trust EW Trust MV Non Accrual Loans FHLB Collateral Remaning BP FRB Collateral Remaining BP FMAC So ooo oo o oooooco BALANCING RECAP Income Expense Total Assets 6 025 952 Interest Income a s 57 Intere z 81 004 Loan Fees 400 000 Loan Loss Provision 2 775 217 Non Interest Income 6 074 313 Non Interest Expe 2 085 987 Net Pre Tax Income 631 004 Taxes 1 455 983 Net Income Total Capital 857 Total Liabilities 1 973 653 and Capital Difference 0 0 After you enter data you must save it Click Save Data to save partial figures in the current month or changes in earlier months DataBridge Note Most extract files do not contain a number for Current Earnings this figure represents YTD Net Income Therefore it is necessary to manually input current earnings after each download It is always a good idea to check the Update Financial screen to make sure that the average and end of month balance sheet columns are in balance and that Net Income is correct for that month 13 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RATE FORECAST Interest rate changes are inevitable and largely unpredictable yet a financial institution s performance is directly impacted by these changes Com
285. r Rate Shock Income 200 150 100 50 0 100 200 300 400 Interest Income Cash amp Due 1 108 1 108 1 108 1 108 87 248 973 910 1 660 861 2 747 792 3 634 763 Securities 7 650 409 8 003 385 7 212 954 7 876 747 6 608 940 10 657 320 12 297 460 14 014 710 15 774 260 Loans 67 044 360 67 763 500 68 774 770 69 914 580 71 079 400 75 734 580 62 798 010 69 635 300 96 830 160 Equity Securities 174 935 197 714 220 492 243 270 266 048 311 604 357 160 402 716 448 272 Total Interest Income 74 868 593 75 963 493 76 207 106 78 033 488 80 241 645 87 677 425 97 313 516 107 000 529 116 687 443 Loan Fees 835 200 835 200 835 200 835 200 635 200 635 200 835 200 835 200 835 200 Asset Income 75 703 793 76 798 693 77 042 306 78 868 688 681 076 6845 88 512 625 98 148 716 107 835 729 117 522 643 Interest Expense eee Interest Bearing Deposits 927 770 927 770 927 770 927 770 1 131 241 6 754 855 11 752 070 16 724 300 21 761 310 Borrowed Funds 67 338 67 336 67 336 67 336 102 357 466 002 1 119 762 1 788 755 2 457 747 Total Interest Expense 995 110 995 110 995 110 995 110 1 233 598 7 220 860 12 871 831 18 513 053 24 219 062 Net Interest Income 74 708 684 75 803 584 76 047 197 77 873 579 79 843 247 81 291 765 85 276 885 89 322 676 93 303 582 Loan Loss Provision 525 000 525 000 525 000 525 000 525 000 525 000 525 000 525 000 525 000 Net Interest Income After Provision 74 183 684 75 278 584 75 522 197 77 348 579 79 318 247 80 766 765 84 751 885 88 797 676 92 778 582 Non Interest Inco
286. r forecast for non Treasury rates given a particular Treasury rate environment These factors will change over time as more rate history is accumulated The Rate Indices in Orange are Custom Driver Rates created by the user Normally these drivers are linked to the rate indices Blue or Red so that when the base driver changes they will change too A Commercial Fixed custom driver linked to Prime would automatically change in a Non Parallel shock provided both Prime and Commercial Fixed remain checked If your model contains Driver Rates that are not linked to any index they will not automatically change in the Non Parallel Rate Shock Module and will show on the list without a red check box as shown below Driver Mot Linked 3 00 0 00 eee Creating New Scenarios While it is recommended that you use the default scenarios provided each month you may need to create a new scenario or adjust an existing one If you create a new scenario with eight active scenarios the new one will show on your list as Deactivated This means you will need to Deactivate another one and Activate the new one in order to use it in the analysis 70 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 D To do this click on an Active scenario and select Deactivate Deactivate Then click on the new scenario and select Activate Your new scenario will appear with only the current Treasury Yield Curve as below Current Yield
287. red For example it is December 2008 and you have created your budget for 2009 You will select the starting point of January 2009 to move Projections to the Budget area of the database To move the budget data select Utilities Lock Budget from the drop down menu at the top of the screen Select the month and year for which you are budgeting in this case January 2009 Projections Budget Maturity e Y ariance Ho Fed Funds Verification Budget EOM EQM EOM Vanance Budget Once you have moved these numbers to the Balance _ Balance _ 000s Interest Interest budget the data for January 2009 and 2008 a Hov 38 630 24 738 13 892 220 400 155 615 beyond will be identical in both the E Dec 38 866 24 974 13 892 245 241 163 147 Projections and Budget Tab at that point in 2009 Jan 35 074 39 074 O 246369 248 369 time This can be seen by viewing the OAE ee 33 204 0 22846 226416 Vari Tab i Caer locdkineih SS Ta 39 496 39 496 0 253 005 253 005 ASEE TAE A E A E GE Apt 39 709 34709 O 247109 27109 budget You will also see this by printing May 39 924 39 924 O 257724 257724 Jun 40 141 40 141 O 257 680 251 680 repor h he Variance reports for Epon Ue as te Naklalice Pe yio Jul 40 360 40 360 0 262162 262 162 next year Once you start updating your plan Aug 40 580 40 580 0 264282 264262 with actual data your projected data will Sep 40 003 40 003 D aBa ear Dar h d will no mebud et Oct 41 027 41 027 0 268499 268 499 change ana WII NO longer mi
288. rest Rate Scenario variables that are used to assign plan values to your worksheet These cells are populated using the same methods as you use to establish the Account List described above Close File Pri Compute Summary Tax Build Edit Plan List Category Account List Category Account Data Tax Data Data Item List GAP Data Account Properties Rate Shock Data Interest Rate Scenario D ata Wi Zar d V Substitute Descriptors Using the assign buttons when a folder is selected will assign all of the folder contents Assign in the selected direction In the following example cell F1 reflects the data item code and G1 reflects the name of the variable that will be used to determine the value that will be assigned in the respective cells the EOM Balance in this example v fe EOM Balance c aaa a 00001 c aab a 00002 c aac c aaca 10 a 00100 11 c aacb 12 a 00101 13 c aacc 14 a 00103 15 c aacd 16 a 00102 17 c aace 18 a 00219 19 c aacf 20 a 00250 21 c aacg 22 a 00311 23 c aach 24 a 00003 Account Properties gives you access to the codes and names of the account properties stored in Compass Accrual basis length of maturity of new balances method of amortization ceilings floors and decay rates are among the various properties listed in this menu option Use this option if you are building assumption or audit reports to verify the behavior of B G D E 1
289. ribes the shape of the line graphing market value of equity when market values are adversely impacted by Optionality The sum of the periodic rate sensitivity gaps over the next 12 months An artificial maturity structure for a balance sheet account that has no contractual maturity The maturity structure can be used in Gap Market Value or both Gap and Market Value calculations The actual income loss in dollars due to rate change from the current level It is computed by subtracting the net interest income at each Rate Shock increment from the current or zero change level Only potential losses are reported A market interest rate that is beyond the control of the individual financial institution that influences pricing decisions of the institution The percent change in market value price of a financial instrument for every 100bp change in interest rates Duration is usually expressed in months Divide the Duration in months by 12 to convert to percentage Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Dynamic Gap Economic Value of Equity EVE EOM Balance EOM Yield Factor Fully Tax Equivalent FTE Gap Interest Rate Risk Margin Risk Tolerance Market Rate Market Value Market Value of Equity MVE Model Gap analysis performed at a time in the future based upon a projected starting point with asset liability mix affected by management s strategy The difference betwee
290. riod If you choose to calculate future rate shock for months after the first budget month then new maturities calculated from new balances for months before the month chosen will also be added to the cash flow Non Maturing Accounts No decay rate The entire balance is treated as maturing each month and there is no exposure to changing market rates Market value is equal to book value and duration is zero Decay rate applied to market value duration Monthly cash flow is calculated by dividing the last actual end of month balance by the number of months entered for the decay rate on that account The result of this calculation is added to the interest payment for each period to determine the total cash flow for that period Decay rates may be established or changed by going through the Account Wizard Discount Rate The discount rate for all periods will be equal to the offering rate rate on new balances or alternate discount rate for the first projected month Residential Real Estate report run for January Offering rate rate on new balance for January 7 00 Discount rate for this account 7 00 The discount rate used to calculate non interest bearing demand deposits with a decay rate is the rate on savings accounts for the first projected month unless an Alternate Discount Rate is selected in the Account Wizard Market Value The discount factor for each period is equal to the cash flow for that period multiplied by the formula
291. rojections Budget Maturity Hepricing Vanance Fe a In this example a Commercial Adj ong FOM Flew Offering Taal Metunties account with a last EOM balance of Balance Balance Rate Maturities aate 2 728 should have Scheduled 2007 Maturities of 2 728 just as the general a ae ETRE ledger and loan application should be in ep leld f op a S E eile Hov 2 801 173 7 60 100 E64 adjustable you will also be Dec er ths 156 DEE ol b52 downloading Scheduled Repricings to 2008 Jarn 2 952 156 rAr fg 6 5 the account Feb 3 031 180 40 101 6 3 Compass will import repricing data into the Scheduled Repricings columns as far out as the First Time to repricing period goes The Account Properties Editor for Commercial Adj below has a First Time to repricing of 36 months That means that only repricing out the next 36 months will be imported during the monthly update process Any repricings beyond that date will not be downloaded The comparison of the Scheduled Repricing data is more involved In theory the account s Repricing Balances should match the last EOM balance as the entire portfolio should be scheduled to reprice at some time in the future The only variable to take into account would be the Scheduled Maturities If loan is scheduled to reprice a year from now but the borrower is making monthly principal payments then the amount available to reprice at that future date could be lower than the current principal Your Com
292. romotion Seg Diver Spread Rate 0 00 2r 3 3 25 aro NOW Accounts Projections Im 275 Projections Budget Vanance Fed Funds Hotes EOF Mew Offering Balance Balance Rate E spense Cost 2011 Modeled O O O ialis 2010 Jan 103268 AR 024 104659 ee Feb 101 445 17 291 0 22 103 018 oe aes Mar 95 362 18 451 022 101 007 S Nene Apr 100 134 17 045 0 2 99 45 f Quick Model Cancel Juri 96 490 14 972 0 18 98 527 Save Jul J1 776 14 171 018 93 161 INOW Aug 34 640 13 045 D17 92 620 RT Sep 86 520 1 Oo 0 14 92 96 Driver PRIME Oct 91 182 9 306 012 89 520 Nov 94 129 10 024 0 13 91 751 July Rate 120 Dec Ir Err 11 046 0 14 15 268 Time Lag 0 Months 2011 Jan 102512 12 264 014 100 834 a Feb 100 522 10 543 O14 101 0953 Current Price 0 15 4 Mar 101 103 11 398 013 100 412 eae Apr 100 870 10 865 013 10 72 ale Spread May 36 538 11 057 0 14 E dit Spread Factor Jun 96 171 10 982 014 Jul 36 171 0 15 12 350 0 15 Beta Create 4 Promotion Aug 96 171 0 015 12 415 015 96 171 ST a aE A s gt E In this next example the NOW Account has sufficient history to 7 use in the beta analysis A New Model has already been applied D E to the account Note that the current index used to model the account is Prime rate This index was selected by the model Add Insert Delete Cleat operator 38 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Clicking on
293. rplus CY Preferred Stock 4 Undivided Profit P B Undivided Profits Restore Data Diagnostics Print Tab 4 Curent E armings B Current E amings 4 Dividends E so Interest 2007 2008 2009 2010 2011 Fe oa E As Loaded Asloaded 1 863 441 16 038 1 664 780 1 637 939 1 621 454 hrapar l Revised 1 863 441 9 716 038 1 664 780 1 637 939 1 621 454 100 cco M L L L L L 1 e e E Revised Change 0 0 0 0 0 Plan File C Program Files Compass S ample Bank Sample Bank mdb 2 19 2008 2 26 PM s start t I Compass Manu al Financial amp Budge im Co npass Accou s untitled Paint 2 CW s m dy Nnn i 2 26 PM Diagnostic Button The Diagnostics Button tells us the cause of the error Compass provides several diagnostic messages to help the user locate potential issues that would cause errors in the simulation results Account Editor Diagnostics The Zero Rate diagnostic informs you that there are forecasted balances without a rate To clear the red flag manually enter the rate There are four types of rates that could be affected the offering rate in the Projections tab the scheduled maturity xrate rate in the Maturity Tab and the new repricing rate as well as the scheduled repricing xrate in the Repricing Tab Negative New Balances is an issue with the forecasted balance Account Editor Diagnostics sheet This type of an account needs to have its balance reductions Negative New Balances
294. rror the buagert Nov 41253 41 253 0 261 569 261 589 The budget data will not change as it is Dec 41 451 41 451 O 272139 272139 stored in a separate area of the database Making Changes Once locked to budget the data is no longer computed If you need to make adjustments change the Projections and re lock the budget If you have already updated your plan for January and you choose January as the starting point to lock your budget then your January actual data will become the January budget data This is important if you choose to make changes to the budget after your original budget has been locked For example if you have updated for the month of March and need to make changes to your budget for April and beyond change the data in Projections and Lock Budget starting in April This procedure will not affect the numbers you have in budget for the previous months January through March as they were moved from Projections to Budget the first time you locked them Always make a back up of your plan immediately after locking the budget 125 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 DATA EXPORT The Data Export function creates text files containing the data of your choice Step 1 determines the type of data from the Current Year Budget or History In Step 2 you will designate w Data Export Step 1 Select the type of data you want to export f Current f Budget f History Step 2 Individually s
295. rt Default Data Types Time Selection Fonts Change lt New Report gt v Accounts Yield Cost z This Year v By Month Body x Save Save s Summary Items Custom Ratios Actual Include Totals Averages Arial 9 Accounts Summary Items lt Design Area 2 Title lt PlanN ame gt Please be sure to save any report changes before attem E 2 E Gross Unrealized AFS G L F Subtitle 1 New Report Unreal Gains Losses Subtitle 2 38y Selected Category Note f indicates actual values i Selected Category w Total z aa E H lt Subcategories EE et Accounts Description Data Type Subcategories and Accounts Jan Feb Mar Apr May Jun a LL n 2007 2007 2007 2007 2007 2007 5 3 Commercial J aada Total Commercial Yid 7 61 7 36 faa 6 96 7 36 7 55 Commercial RE Fixed 3 ada Total Commercial Yid 7 61 7 36 7 33 6 96 7 36 7 55 Commercial RE Var 4 Commercial RE Var w Flo 5 _ Residential 6 Residential RE Fixed 7 Residential RE Variable 8 Residential RE Var w Floc 9 Home Equity Loans 10 Home Equity Loans w Flo 11 4 Personal Loans 12 Installment Loans 13 Overdraft Protection Lns 14 4 Non Accrual Loans 15 SBA Loans Non Accrual 16 Comm Lns Non Accrual 17 Comm RE Non Accrual 18 Home Equity Non Accrual 19 B Personal Direct Non Accrual There are options
296. rtment s profitability At the Total Bank level the Funds Pool balances are removed so that only the true Fed Funds position is reflected SBU TAXES aoea Compute The state and federal tax rates in the Strategic Business Unit system are stored in the Total Accounts Bank SBU plan only To enter the nominal tax rates for each select Projections Tax Tax Information Information from the top menu list in the Total Bank Taxes will be calculated for projected months using these nominal rates Taxes for actual months will only be downloaded to the Total Bank Taxes are not allocated to the subsidiary branches departments SBU FUNDS MANAGER Business Unit Settings Funds Manager Plan is set to a One branch or department in the SBU is designated as the Funds Manager The Funds Manager plan will receive the actual Fed Funds Sold Purchased for the bank It is also the plan that contains the Cash Balancing account used in the Compute process refer to Compute the Plan section of the manual The compute process posts balances to a Cash Balancing account to offset changes in Current Earnings for projected months In the SBU Compute All Departments routine the Funds Manager plan contains the Cash Balancing account for the bank When planning budgeting please review and revise the Cash account in each branch department as well as zero out the Cash Balancing account in the Funds Manager SBU ADDING ACCOUNTS On occasion it may be neces
297. s Annualized Interest Income Annualized Loan Fees Average Earning Assets Annualized Interest Expense Average Earning Assets Monthly Net Interest Income Average Assets Annualized Interest Income Annualized Loan Fees Average Assets Annualized Interest Expense Average Assets Quarterly Yields Costs Sum of Income or Expense for Quarter Annualized Sum of Average Balances for that Quarter Annual Yields Costs Income or Expense figures for entire year Sum of Average Balances divided by 12 BOARD RATIO REPORT Profitability Return on Average Assets Annualized Interest Income including Loan Fees Annualized Interest Expense Annualized Other Income Annualized Operating Expense Annualized Total Taxes Average Assets 10 Return on Average Equity Annualized Interest Income Annualized Interest Expense Annualized Other Income Annualized Operating Expense Annualized Total Taxes Average Equity Average Capital Notes 10 Net Interest Margin Average Earning Asset Annualized Interest Income Annualized Loan Fees Annualized Interest Expense Average Earning Assets 10 Provision for Loan Loss Average Assets Annualized Provision for Loan Losses Average Assets 10 Net Overhead Average Assets Annualized Operating Expense excluding Loan Loss Provision Annualized Other Income excluding Loan Fees Average Assets 10 Taxes Average Assets Annua
298. s The Xrate of Total Maturities A report that compares 1 Actual results to budget results 2 Actual results from one period of time to another 3 Actual results to peer group averages 4 Any combination above The weighted average rate for the item to the left The weighted average rate is calculated by multiplying each note security or certificate amount by its rate adding the total of all such results and dividing that result by the total end of month balance The percentage of annualized monthly income or expense divided by the average balance for that month Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Account Editor 18 Account Wizard Add Account Cut Move Delete Edit Properties Paste Properties Rename Account Projections 17 Account Tabs 22 Budget Maturity Notes Projections Repricing Variance Appendix A Compass Calculation Index Appendices B B1 amp B2 Monthly Update Appendix C Excel Add In Apply Trend 25 Beta Calculation 35 Blue Chip 14 Budget Tab 22 Locking the Budget 124 C Calc Total Avg amp Trend 25 Chart of Accounts 121 128 Compute the Plan 59 Connectivity Utility 134 Consolidation 95 Consolidation Error log 101 Correlation Tables 7 D Data Export 126 Data Verification 10 DataBridge 6 Correlation Tables 7 Data Verification 10 DataBridgeDownloadErrors log 12 INDEX Updating or Changing Historical Data 13 Dec
299. s Amount Out of Balance Repricings Amount Periodic Cap Relative Ceiling Relative Floor 3 mo LIBOR 6 mo LIBOR 30 day CP 90 day BA 90 day CD 30 yr Fixed Corp Aaa Corp Baa State amp Local Utility A 11th District COFI Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 TERM Adjusted Scheduled Maturities Adjusted Scheduled Repricings ALCO Average Term or Life Budget Cost Capital Risk Tolerance Convexity Cumulative Gap Decay Rate Earnings at Risk Driver Rate Duration GLOSSARY OF TERMS DEFINITION Contractual amortization adjusted by prepayment amounts from earlier months See also Scheduled Maturities Total Maturities Contractual repricings adjusted for prepayments Asset Liability Committee a group of financial institution managers and or directors charged with the responsibility of formulating the institution s policy and procedure to evaluate and manage interest rate risk The time weighted average maturity or repricing of assets and liabilities The weighted average interest rate on a liability for the month Should be equal to the annualized monthly budget income divided by the average balance for that month but Compass does not calculate this field in the budget area The reduction in bank equity that would cause the equity to fall to the minimum required ratio to assets It is computed as the current capital less the minimum capital required Desc
300. sary to add a new account to your Compass SBU system In the SBU ALL new accounts are added to the Total Bank plan only Open your Total Bank plan and select Projections Accounts from the top menu Scroll to the area in your Chart of Accounts and Right Click on the folder or account where you would like to add the new account Select Add Account from the menu The Account Wizard will appear Complete all sections of the Rename Account Wizard to set up your new account Account Wizard Delete Cut Move Edit Properties After completing the account set up wizard your mouse cursor becomes an hourglass When Properties the mouse cursor returns to normal Compute the Plan and the account will be added to all subsidiary plans 105 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 SBU ADDING NEw DEPARTMENTS BRANCHES Adding a new branch or department is easy in the SBU system Please contact Plansmith Support Services at 1 800 323 3281 and we ll walk you through the process over the phone in a matter of minutes SBU CONSOLIDATING After you have updated all of your plans it s time to combine the individual branch department data into Total Bank data From the Total Bank plan select Compute All Departments Then Compass will perform the following Compute Cost Centers and Allocate Expenses from Cost Centers first Allocate Capital Allocate Direct Expense Funds Pool In Out posted to balance each branch departm
301. sets totaling 80MM Branch 2 has 15MM Admin has 5MM The total assets for the bank are 100MM This means that the capital will be allocated as follows Branch 1 8MM or 80 of the 10MM Branch 2 1 5MM or 15 of the total and Admin 5MM or 5 ite elp The Calculate Earnings at Branches but Don t Allocate Capital Submit Plan to Executive Dashboard option will allow the posting of Retained and Current Earnings to eee ea each department If you do not wish to have the departments equity affected by the Funds Pool income expense you will need to remove the Offering Rate model on the Funds Pool accounts Capital Allocation Capital Allocations 560 Chart of Accounts Allocate Capital as a of Assets You can view your current setting through the Utilities Menu C Don t Allocate Capital At Branches Should you wish to amend this option please contact Plansmith perenne Support Sarvices at 1 800 323 2281 for eee nce e CURSE OTS DIANCNES OU LONI ocean Lapa 103 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 SBU EXPENSE ALLOCATIONS bia ene alco E E 50 Ea Total SBUHT SBU 2 SBUHO SBUE l The Strategic Business Unit system has a feature that allows 1 Branch 1 0 00 i 2 Brac 0 00 the allocation of Direct Expenses between branches or Funds Manager 0 00 epo o i departments To access the grid at left Select Utilities Direct Expense Allocat
302. splay ate Risk Bubbles Detai ull Rate Shocked vs Min Equity li Rate Shocked vs Min Net Int ull Shocked Equity vs Future lll Shocked Net Int lnc vs Future 61 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RATE SHOCK MARKET VALUE Rate shock market value is a longer term rate risk measurement It computes the Net Present Value of assets and liabilities The difference between assets and liabilities is the Market Value of Equity MVE also referred to as Economic Value of Equity EVE 1 Net present value is calculated by discounting the cash flow both principal and interest of all interest bearing assets and liabilities 2 Non interest bearing assets and liabilities with the possible exception of demand deposits are valued at book there is no change in market value regardless of interest rate levels 3 Each interest bearing asset and liability account is discounted to its present value by using that account s price Offering Rate or Alternate Discount Rate The price is determined by first shocking or changing the Driver Rates in the first month of your rate projection by the amount of the shock increment then secondly deriving the rate for the account from the pricing model for that account This process is completed in each of the eight different rate shock increments specified in the Compute Rate Shock calculation box plus the base rate Offering Rate in the first projected mo
303. t Accounts Should you wish to verify the tax calculation there is a Tax Audit Report Stata income Tax Calculation available within the Analysis Reports folder in the Reporting menu Pretax Income Less US Treasuries Analysis Reports US Agencies Account Analysis State Taxable Income Compute Audit Rate Funding ality Analysis Tax Liquidity 2 Federal Income Tax Calculation Pretax Income Less State Tax Plus TEFRA Disallowance Federal Taxable Income Rate Tax Before Adjustments Tax Adjustments Tax TEFRA Disallowance Input Federal Tax Exempt Interest Income s Federal Tax Exempt Non Tefra Interest Income s Difference TEFRA Disallowance Estimated Annual TEFRA Calculation EOM Total Assets EOM Undivided Profit Current Earnings Total Interest Expense TEFRA Factor 58 EOM Balance of Exempt Items Non FTE Income of Exempt Items TEFRA Cast of Funds TEFRA Disallowance Disallowed Portion Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 a COMPUTE THE PLAN Calculating the projected results involves literally thousands of data elements and perhaps hundreds of interactive models So many calculations take a few seconds even on the fastest computer To ensure fast response and accurate results Compass only calculates on command This is what you see when you click the Compute the Plan button Plan Compute 516 Select a scenario EE Flarn feel Step 1 Diagnostics o Step 2
304. t SBU Compute please refer to The Strategic Business Unit Planning Model located in the Consolidation section of the manual 59 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 B COMPUTE PARALLEL RATE SHOCK Rate Shock is a simulation technique for determining the potential impact of rate changes Rate shock takes two different forms income analysis and market value analysis RATE SHOCK INCOME Rate Shock Income is a short term measurement of interest rate risk It incorporates the following assumptions by definition 1 All assets and liabilities are frozen at the amount in place at the time the rate shock analysis begins Maturities principal reductions and prepayments are repriced at the shocked rates the principal remains constant 2 All Driver Rates are shocked or changed by the full amount of the shock The change for each account is modified by the Pricing Model if any applied to that account That means that the price could change by more or less than the driver change or not change at all 3 Rate change is either applied all at once instantaneously or gradually ramped over the years As the rate shock analysis is designed to be a stress test or worse case measurement examiners recommend that the rate shock increments in your Compass model be set to instantaneous shocks Whichever your selection please make sure your policy guidelines are in sync with these settings in the model document yo
305. t you also have access to key pre calculated ratios when you slide the account bar down Try it with your own data m Compass Report Designer BE File Update Rates Projections Compute Reporting Utilities Help a IM aan l l er fs al ee File Update Rates Projections Compute Reporting Utilities Help Le C P 5 E C Goon f X m D gt E ee eA A E fe is MO ow 7 ccounts afance bd Is Year ba ody bd Save Save As Summary Items Custom Ratios Actual Include Totals Averages Arial 9 Accounts Summary Items lt Design Area 2 Title kPlanN ame gt Please be sure to save any report changes before attempting to print the report Balance Sheet F Subtitle 1 New Report i Assets O Subtitle 2 Cash amp Due z EB Cash amp Cash Items Note e indicates actual values Non Int Bearing Due From Banks Preview Report I Footer lt Page gt B nterest Bearing Due From Bank Fe B 4 Fed Funds Sold gt Description Data Type E F G H J K IL M E Fed Funds Sold Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov H ae nae 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 C B US Treasury Bills B US Treasuries Notes 0y U S Agencies B US Agencies y CMO s B SBA Pools B Private CMO s B Agency CMO s B MBS s B MBS s Var 0 Municipal Sec B Municipals B Taxable Municipals 4 Stock B Equity Securities 4 Other Securities EB Other
306. ta Federal Tax Account Property Codes Accrual Method Amortization Method Decay Mode Payment Frequency Rate Structure RBC Factor Tax Option AFS Flag Amortizing Cost Expense Income Interest Bearing Maturing Out of Balance Maturities Out of Balance Repricings Prepaying Repricing Required Account Rate Codes Fed Funds 3 mo T bill 6 mo T bill 1 yr CMT 2 yr CMT 3 yr CMT 5 yr CMT 10 yr CMT 25 yr PRIME 1 mo LIBOR APPENDIX C s 3017 s 3019 s 3018 s 3020 s 3037 s 3038 s 3024 s 3025 s 3048 s 3047 s 3072 t 4002 p 5020 p 5021 p 5022 p 5023 p 5024 p 5025 p 5026 p 5027 p 5028 p 5029 p 5030 p 5031 p 5032 p 5033 p 5034 p 5035 p 5036 p 5037 p 5038 i 00012 i 00013 i 00014 i 00015 i 00016 i 00017 i 00018 i 00019 i 00020 i 00021 i 00022 C 16 Risk Weighted Avg Earning Assets 000 s Risk Weighted Avg Non Earning Assets 000 s Risk Weighted EOM Earning Assets 000 s Risk Weighted EOM Non Earning Assets 000 s State Tax Exempt Avg Assets 000 s State Tax Exempt EOM Assets 000 s State Tax Exempt Int Inc S s State Tax Exempt Non Int Inc S s State Taxes Distributed S s State Taxes Undistributed S s Time Deposit Ratio State Tax Yield Call Date Created Modified Balloon Due Call Frequency Time to Maturity Time to Repricing Decay Rate Absolute Ceiling Absolute Floor Base Yield Cost Factor Expert Banker Account Number Out of Balance Maturitie
307. te 480 Volume Average Balances for 12 months beginning in first projected month added together and divided by 12 Rate Yields for the first 12 projected months added together and divided by 12 Net Overhead Cost from Wizard setting Net Adj Overhead Actual OH Calc OH Cost Factor 100 Balance 1000 Balance 10 If the item is a Loan account with Loan Fees the Adjusted Overhead is Actual OH Calc OH Cost Factor 100 Balance 1000 Tot Ln Fees New Lns Tot New Loans Balance 10 Ln Loss Ser Chg For Loan Accts Total Provision for Loan Loss for 12 months beginning in the first projected month added together and divided by Total Loan Volume and divided by 10 For Demand Deposits Total Service Charges for 12 months beginning in the first projected month added together and divided by Demand Deposit volume and divided by 10 Net Rate for assets Rate Net Overhead Ln Loss for liabilities Rate Net Overhead Ser Charge Totals and differences Demand Deposits are used to cover the cost of Cash amp Due accounts then distributed over the other asset accounts Capital is used to cover the Risk Based Capital requirements of all assets and excess capital is distributed to all the assets after their capital requirements are met Product Profitability pretax Product Profitability Net Rate of Asset Net Rate of Liabilities covering that asset Return on Equity Return on Equity Asset Volume
308. tes being tested by that technique The Rate Volume Calendar report found in the Variance section of the Report menu is an excellent way to see if pricing models need adjustment This report quantifies the difference from your plan caused by rate differences as opposed to volume differences If rate variances become large in any particular account it s time to review pricing strategy for that area Another option is to view the Offering Rates report for the first projected month this month on a monthly basis That rate should be close to the market rate for each product in the current month Many bankers experience initial difficulty with pricing models because they have not really thought about pricing dynamics They may have set prices primarily by following the competition Plansmith believes that the effort spent in discussing pricing strategy rather than a follow the leader philosophy will lead to better performance and lower exposure to changing rates Compass lets you test the results of an alternative strategy and to test alternatives as conditions change 34 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Product pricing especially for non maturity deposits is often the most difficult assumption to develop for any ALM model A pricing strategy needs to be developed that not only accounts for today s product price but the price when rates rise and fall Researching historical correlations between
309. th from previous Month zi _Seveae pea Draw from Select an category or account Ji Assets Cash amp Due C Fed Funds Sold J Securities C Loans 7 Loan Loss Reserve 7 Fixed Assets 7 Investment Loss Reserve F Goodwill By taking 0 Sof EOM balances EOM balances Hew balances Ok See see does Modeling in income expense also operates differently than in the balance sheet In order to use the modeling functions one must click on the Manual button Projections Budget Variance Notes z003 Income O04 Income 2005 Income 2006 Income 2007 Income 2008 Income Manual This will bring up a new window that offers three new options the first of which is the Fee Model Fee Modeling offers the option of determining income expense based upon a percentage of either EOM Average or New balances ina balance sheet account 52 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Annual Growth Rate iIncome Expense Model Model Selection f Manual f Fee Model Cancel a count Everette REE The second modeling option is Annual Growth Rate The Annual Peaken e e iter Growth Rate selection will apply an annual percentage of growth Mo fg to the previous year s total income expense View the data for the previous year by scrolling to the left of the current year s figures Enter an annual growth rate
310. the account or category level Viewing and editing your bank s prepayment experience as well as applying a prepayment model are options available either from the menu bar by clicking on Projections Prepayment Utility or within each account in the Account Projections screen by clicking on the Maturity tab and then the Model button at the top of the Scheduled PrePmts column Projections Budget a M jaturity Wee i Varance Fed Funds Hotes Last EOM Balance 13 646 Total Scheduled Maturities 13 646 Balance Difference EOM rield Ae Aate Ae Yield Difference Weighted Avg Mat 38 Adi Scheduled d Scheduled Scheduled Hew N Scheduled Maturities Scheduled Mats Scheduled FrePmts Mew Maturitites Hew FreFr Maturities rate Maturities rate PrePmis rate Maturities rate PrePmits al 2012 User Edit User Edit No Model The Prepayment Utility is broken down into three sections Model History and Instruments nis Financial Compass Prepayment Utili File Update Rates Projections Compute Reporting Utilities Help E 5 F P 5 5 oo ooo i x Cho OheBOU8 amp BE E H Balance Sheet EE Assets Commercial Fixed Go to Account Projections lL Securities Er U 5 Gov t Historic Prepayment 42 596 Curent Time Period Noy 2012 Export to Excel Bes US Treasuries Ey U 5 Agencies l Po lis agencies Model History Instruments Hodel Selection C Mo Model C New Detailed Model Bos Mortg Backed Secs iB
311. the product price and outside rate indices is an option but involves manual efforts outside of the model The Compass Beta option automatically calculates the correlation and beta for various product types and rate indices Applicable Accounts We only suggest using the beta option for accounts that are truly variable in rate This does not include fixed rate adjustable rate or variable rate products with floors and or ceilings This will include variable rate products without floors and ceilings and nonmaturing deposits In order to use the beta calculation option one should have sufficient history stored in the model so the relationship can be calculated We suggest at least one year of historical data be present to use this function If you have gaps where data is missing those data points will be excluded from any calculation It is also important to remember that pricing assumptions created using the beta function are representative of historical behaviors and may not represent the current or future pricing strategies for that product Setting Up a Beta Model If the Offering Rate is set to Manual or Quick click on the modeling button select New Model This will bring up the option for the Beta Offering Calc Spread Rate i Manual Edit Spread Factor i Beta Create Promotion Beta Calculation Our Beta formula is designed to account for the product price change as compared to the change in rate of an index in
312. ths amount 435 227 Number of Months 4 Year to Date Average 435 227 4 108 807 Note All Annualized Income or Expense values must be divided by 10 to properly place the decimal This reflects the division by 100 for percentage conversion and the multiplication by 1 000 because Compass carries balance sheet items in thousands Interest Calculation Methods Type 1 Average Calculation Type Accounts Calculated Average Balance User entered EOM Balance last month current month 2 Annualized Monthly Interest Average Balance User entered Average Yield or Cost Days in Year Days in Month Annualization X Days in Month Days in Year Stable Balance Starting Balance Maturing Balance Stable Income Starting Balance Starting Yield Maturing Balance Exit Rate Stable Yield Stable Balance Stable Income Ending Balance Starting Balance Maturing Balance New Balance Ending Yield Stable Balance Stable Yield New Balance New Rate Ending Balance Monthly Interest Maturing Balance Exit Rate 2 Stable Balance Stable Yield New Amount Entry Rate 2 annualized Monthly Average Balance Starting Balance Ending Balance 2 Same calculations as Type 2 however Maturing and New Balances are increased by the Repricing Dollars Repricing Balances mature at this Issued Rate and are assumed to add to New Balances at the New Rate shown with ceiling and floors considered P
313. tine needs to perform extra steps necessary for the Add In Don t Allow Negative New Bals in Maturing Accounts A red flag diagnostic message Negative New Balance can be confusing Though this error will not affect any historical data the message is an alert that the projected information on that account is illogical As a result the income expense projection will not be reliable The message is stating that the projected balances are decreasing faster than the projected runoff or scheduled maturities One way to prevent this message is to use growth models positive growth on your EOM balances Another way is to check the Don t Allow Negative New Bals in Maturing Accounts This option will not allow the illogical projection 129 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Dividends Dividends cannot be forecasted in the Account Projections screen as they must be netted to Undivided Profits after year end In order to forecast dividends select Utilities Options Dividends from the top menu selection For SBU plans capital is projected at the total Bank level so Dividends must be forecasted there If you open an SBU department the dividends tab will be grayed out For Holding Company consolidations Dividends may be forecasted in the Account Projections in Elimination plans only There are three methods of forecasting Dividends Preferences Dividends General Chart of Accounts Dividends Rep
314. ting portfolio DataBridge is the part of Compass that automates the process of reading data files extracted from your other data processing systems Using DataBridge offers numerous advantages 1 Saves time Eliminates Input Errors Captures Cash Flow More Accurately Allows Reclassification of General Ledger Accounts Automatic Error Detection Upe WN There are three basic steps in using DataBridge 1 Creation and transfer of the monthly extract files from your data processor These files must be copied to the same folder as the rest of your Compass data to be processed The procedure varies significantly from one financial institution to another If you are unfamiliar with your process contact your data processor for assistance 2 Running the DataBridge process in Compass This performs the actual update of the Compass fields files 3 Correcting problems identified in the DataBridgeDownloadErrors log This is necessary when new general ledger accounts or application codes are added or when application data is not in balance with the general ledger MONTHLY DATABRIDGE OPERATION Always make a backup copy of your plan prior to downloading The download changes hundreds of data fields and causes Compass to reforecast all remaining months of the plan Downloading incorrect files or choosing the incorrect month can be difficult errors to reverse Each month end you will receive new download files from your data processing Sees ates i
315. tings B 3 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B This means that the total for Scheduled Repricings in the Repricing Tab within the stated Account Wizard repricing period does not match back to the last EOM balance The Fix Small Maturity Imbalance function may automatically plug this difference if checked This is an issue with the forecasted balance sheet This type of an account needs to have its balance reductions reflected ONLY in the form of maturities To have the balances go down faster than the scheduled payments adjust the scheduled maturities in the Maturity Tab or add a prepayment model Or you can automatically plug the Negative New Balances by selecting Don t Allow Negative New Bals in Maturing Accounts from the Utilities Options Chart of Accounts Tab For any other type of Red Flag please contact Plansmith Support Services at 1 800 323 3281 Repeat this process for each account with a Red Flag until all issues have been resolved 4 Update the interest rate forecast gt I N k E Click the Rate Forecast button AutoUpdate Click Auto Update Follow the prompts to update your Interest Rate Forecast Upon completion you will see Rates are Current in the upper left hand corner 5 Compute the Plan and Compute Rate Shock P Click the Compute the Plan button 27 Click the Compute button After the compute is complete the Compute Summary will a
316. tion may automatically plug this difference if checked This is an issue with the forecasted balance sheet This type of an account needs to have its balance reductions reflected ONLY in the form of maturities To have the balances go down faster than the scheduled payments adjust the scheduled maturities in the Maturity Tab or add a prepayment model Or you can automatically plug the Negative New Balances by selecting Don t Allow Negative New Bals in Maturing Accounts from the Utilities Options Chart of Accounts Tab For any other type of Red Flag please contact Plansmith Support Services at 1 800 323 3281 Repeat this process for each account with a Red Flag B1 4 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 APPENDIX B1 After clearing Red Flags on the unit close the plan and you will return to the consolidation screen Open the next plan on the screen and clear its red flags After clearing all red flags exiting and saving each plan you will return to the Total Consolidated plan 4 Update the interest rate forecast bs Click the Rate Forecast button AutoUpdate B Click Auto Update gt O Follow the prompts to update your Rate Forecast D Upon completion you will see Rates are Current in the upper left hand corner 5 Compute All Plans P A Click the Compute button Compute All Plans If you receive a ConsolidationError log refer to item 6 Clear the Consolidation Error L
317. tions are available here that are available in the standard report Header section The Design Area button expands the report to the left for a wider view SAVING YOUR REPORT Report Default Data Types Time Selection Fonts Change New Report Accounts Target Balance This Tear By Month Body Save Save As Summary Items Custom Ratios Actual Include Totals Averages Arial 9 Use the Save As button to save your report the first time and the Save button to save it after that You will be asked to name the report at this time as well Your new report will be saved in the Custom Reports section of the Report Menu 91 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 RATIO DESIGNER For a variety of reasons it is desirable to show the relationship between two variables in order to more effectively measure progress The Ratio Designer provides a means for the user to describe relationships not included in Compass Let s look at the Ratio Designer screen m Compass Ratio Designer File Update Rates Projections Compute Reporting Utilities Help a 1 kA P 5 E CODED GEED Hg f x maws gp i I Ratio lt New Ratio gt m Save s Accounts Summary Items Design Area i Assets Data Types Numerator lt Not Selected gt r Cash amp Due Denominator lt Not Selected gt x Cash amp Cash Items Non Int Bearing Due From Banks Aggregation Metho
318. title 2 FTE typed exactly as listed in the yellow area of the Note indicates actual data 8 Report Header Footer Designation box same case Footer Page and surrounded by lt gt characters Markers OF Cancel Directory al I lt Income Statement Reports P J Chart of Accounts E Chart of Accounts FONT CHANGES 4 Custom Reports Financial Reports Balance Sheet Font changes can be made for each area of each reta meres eens t Right click the Report N d select th Cash amp Due report Right click the Repor ame an selec e Rate Risk ia Interest Bearing Due Fr area of the report that you wish to resize Keep in Spl a san Fed Funds Sold mind that font choices in the body and report al zy Eod Funde Sold a Gap Tik headings may impact report spacing Rate Subtitle 1 Rate Copy for script Rate Subtitle 2 Any time you change those fonts you may want to die Sc Note s review the report in Print Preview mode as described T ale oc I i aes meee later to make sure that page layout is correct Summa Market alue Dura Row headings 2 5 Rate Reports Body Driver Fates l l Difering Rates Subtitle 1 Subtitle 2 fields and Costs Body Column Row Insert Page Break Remove All Page Breaks PAGE BREAKS Modify while the report is visible in the report window by right clicking anywhere in the report Page breaks cannot be added while in Print
319. to adjust the Scheduled Maturities moving the amount in the Scheduled contractual Maturity month s to an earlier month HOW TO ESTABLISH FORECASTS Pressing the button under EOM Balances provides the user three model selections from which to forecast EOM balances Manual Quick Model and New Model This button will change between Manual and Modeled depending on user selection Growth Model Model Selection C New Model The use of Manual mode to forecast EOM Balances allows the user to enter specific balances that will remain the same until manually revised This is referred to as a static forecast Whereas applying a Growth Model by either selecting a Quick or New Model the EOM balances are re forecasted after each download thus creating a rolling forecast Manual Mode Projections Budget Maturity Variance Fed Funds Notes Taa This mode allows the user to directly enter data for each month Mamies Ka maet Veu directly or through the use of Quick Edits Remember selecting TEE me a 7 the Manual button on the pop up menu and clicking the OK button sets the forecasting method to Manual Mode Once in Manual Mode making changes to the account forecast is much like using a spreadsheet That is simply move the cursor to the N o co Sep 10 618 83 492 9 68 10 49 Oct 11 862 80 181 8 71 10 83 Nov 10 683 EOM Yield 82 672 9 50 10 58 10 965 81 283 8 98 10 51 138 6 66 138 8 63 82434 873 10 96 15
320. to connect to the Plansmith web servers This connection is also necessary if you subscribe to the Non Parallel Rate Shock module If there is a problem connecting the Connectivity Utility will allow your IT Department to change your computer settings and allow the connection to be made Connectivity Settings Main Protocols Connection Financial Compass requires internet access in order to facilitate checking and downloading updates uploading plans to the FTP server and validating license codes The default settings will suffice for most clients However if your installation is still unable to connect to the internet despite your computer maintaining a valid internet connection then these settings can be used to confiqure Financial Compass to function with most types of networks Please contact Plansmith Customer Support at 800 323 3281 for any questions or assistance Financial Compass has detected the following connectivity settings The local system connects to the Internet via a LAN Remote Access Services are installed on this system Please select how to connect to the internet Use default settings Manually configure connectivity settings ADD FEATURES Configuration Code To renew the software license or add features HARE Gu SH E ee PeRtuIeSitanitnie to the software we will send you a code to key Ermalit poraki into the Add Features section Simply copy and i paste the code into the left cell which w
321. ts ability to reverse engineer general ledger breakouts into something much more useful for simulation purposes As an example a financial institution may not be able to break out their loan and deposit information into fixed and floating an important factor in simulation analysis By calculating the cash flows from your loan and deposit accounts the DataBridge can allocate or apportion average end of month and income or expense data to the extra categories broken out in the Compass Chart of Accounts DataBridge handles this by computing the proper proportions of the total balance for each Compass account DataBridge uses a Distribution Table to define the Compass accounts that are members of a single general ledger account The Distribution Table can be viewed by clicking the button on the DataBridge screen Plansmith recommends that you call us for assistance when considering modifications to this table Here is an example of how distributions work Let s assume the following e Aninstitution offers commercial loans in two forms fixed rate and floating rate e Commercial loans are assigned loan type 02 or 03 e The loan maturity file uses a Rate Code of OO for Fixed Rate Loans Floating Rate Loans are any Rate Code other than 00 e The institution s general ledger recognizes only one category for commercial loans G L account 1130199 Commercial Loans e The financial institution has set up 2 accounts in the Compass p
322. ts within the account This feature is critical to model and assumption validation requirements for Risk Compliance w Compass Account Editor File Update Rates Projections Compute Reporting Utilities Help hae of i ae i y ay T QO US Agencies Maturity Balance Sheet a Projections Budget Maturity Variance Callable Fed Funds Notes Last EOM Balance 38 943 Total Scheduled Maturities 37 357 Balance Difference EOM Yield 4 53 Rate 4 52 Yield Difference Weighted Avg Mat Adj heduled Adj Scheduled Soheduled Tota e So New New o Scheduled Maturities Scheduled Mats Scheduled PrePmts e aturitites PrePmts Total Maturiti turities rate Maturities or rate Maturities rate 2 ral Mal User Edit User Edit g ate PrePmts Mrate Maturities 2 Other Securities 2 Other Bank CD s 9 Gross Unrealized AFS G L y Loans C Commercial 4 Real Estate Residential onal Loans O NonAcerual Loans 2 Other Loans E Loan Loss Reserve J Fixed Assets 9 Investment Loss Reserve 5 Goodwill OREO 2 Other Assets Liabilities 2 Demand Deposits 4 Interest Bearing Deposits 3 NOW Accounts 2 Money Market Accounts Savings 5 Time Deposits 29 Other Int Beating Deposits C Fed Funds Purchased 2 Borrowed Funds 4 Other Liabilities C Surplus B Su
323. tual data This is determined by the properties set in the Account Wizard or Edit Properties options The interest rate of new balances new transactions on an account with maturities or the rate on all balances for an account without maturities The ability of the financial institution s customers or bond issuers to prepay or redeem when market interest rates make it attractive for them to do so A full or partial repayment or redemption earlier than specified in the contract between the customer or issuer and the financial institution An estimate of a monthly percentage of early payments In a full or dynamic model the percentage varies according to the amount of Spread The offering rate or rate offered on new transactions This rate may be influenced by a Driver Rate but may react in a complex rather than linear manner to Driver Rate changes Rate Shock computed by gradually applying the amount of rate change over the time horizon selected For example a 300 basis point Ramped Rate Shock changes Driver Rates by 27 27 basis points 300 11 in months 2 12 in a 1 year rate shock The difference between repricing or maturing assets and liabilities in a given time period A technique that simulates rate changes over a specified time horizon from 12 60 months and the reinvestment of maturity cash flows and repricing of both earning assets and interest bearing liabilities The results show the impact on interest
324. ture may be useful if one is aware of data aberrations in recent months and they would like to exclude that data from the calculations Pricing Model Model Selection C Manual C Quick Model f New Model C HELOC Beta Driver April Rate Time Lag Current Price Calc Spre ad Spread F actor the 0 00 0 00 0 00 A 0 00 0 00 0 00 Beta Dialog New Model Current Suggested Value Driver Fed Funds PRIME 39 PRIME Pivot HA 3 25 Bs Spread NA 1 90 i Rising Beta NA 1 00 ho 8 Falling Beta HA 1 00 fio 8 of the anahsis OF BHELOC M337 PRIME 6 00 5 00 F 4 00 x p 3 00 2 00 10 0 00 Jul 2009 Mar 2011 J J recent 5 years of history plus the cunent pear Use the cider below bo reduce The Beta analysis covers the mast recent 5 years of history plus the current pear Use the slider below to reduce the number of months used for the analysis 36 J 21 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Pivot Point The next step in creating the beta model is to establish the Pivot point The Pivot is the value of the index as of the last month a ee end In this case Prime as of March The Z in Pivot rate is compared to the Average 2 200 Yield Cost as of last month end in order to se obtain the Spread In this example a s
325. ty Discount Accretion oe Security Premium Amortz Security Premium Amortz Security Premium Amortz __ Cancel Unreal Gains Losses Unreal Gains Losses Unreal Gains Losses Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var Commercial Loans Fixed Commercial Loans Var Commercial Loans Adj Commercial Tax Exempt Business Manager Loans Comm Real Estate Fixed Comm Real Estate Var For example if adding a Bank 07 to the list above you would first right click on the Total Bank plan box and then select Add Plan Compass will then prompt you to locate that Plan mdb file After browsing for the file you would double click on it or select the file and then select Open Bank 07 s accounts would now be automatically correlated to the Consolidated plan except for accounts where the spelling didn t match up If Bank 07 had an account named Comm Fixed Rate Loans but in the Consolidated Plan it was spelled Commercial Fixed Rate Loans the account would not automatically correlate due to the spelling difference You do not have to change the spelling to link an account to the Consolidated Plan and you can link it either before or after the consolidation Add em Up routine is run
326. ult 0 The Data Bridge File Specifications Table 271 Start Floating Loan Floor location Default 0 i 2 272 End Floating Loan Floor location Default 0 lines 271 276 need to be filled in 273 Divisor needed to place decimal properly Default 0 275 End Floating Loan Ceiling location Default 0 276 Divisor needed to place decimal properly Default 0 277 N A Default Blank 278 Start Scheduled payment location Default 0 279 End Scheduled payment location Default 0 As these accounts behave differently when rates change it is necessary to break them out in your Compass chart This means Account Wizard Commercial Commercial Loans Float Enter the lifetime floorflowest interest rate over the entire setting up a new account for this type of loan By selecting lite of the loan If there is no floor enter 1 If the floor is a expressed as a masinum change from the initial interest Maturing Floating in the Account Wizard you ll be prompted to Bi seen enter the floor and ceiling for the portfolio This is not necessary at i Ltetime fo JO this time as the fields will be populated automatically during the 3 Monthly Update process We suggest you enter the default values e as prompted If you do not have the floor and ceiling fields available in your loan extract you can manually key in the data for the portfol io Cancel lt Back Nest gt When the Monthly Update is run Compass will calculate the weighted av
327. un 10 965 222 10 96 New Model Jul 10 965 356 10 96 Aug 10 965 196 10 963 Sep 10 965 575 10 965 306 10 96 10 965 270 10 965 351 10 963 009 Jan 10 965 352 10 963 Feb 10 965 230 Mar 10 965 231 Apr 10 965 211 N OZO jojo 7 e 10 961 May 10 965 249 10 96 Jun 10 965 215 10 96 10 96 10 96 10 96 Oct 10 965 214 10 96 Nov 10 965 311 8 43 10 96 Dec 10 965 260 8 43 10 96 03 Balance column diss Mecca Micra ia a New Model Mode allows the user to apply a more detailed model a Belance Balance Aaa Marter Mee is se that could exist due to seasonality or other prevailing market 2008 Manual UserEdit Manual Manual User Edil F TE ima as conditions In this mode users are able to specify growth rates per a TE ates month Models can be saved named and applied to other accounts Nov 10683 EOM Yield 82672 l 10 58 aan a ws by selecting save as Once saved this model can be selected while in Growth Model 106 iis SJ dal Selection 4 tzs another account by using the fourth radio button and choosing the Apr 10 965 184 C Manual i 10 96 May 10 865 195 ick Model to named model from the drop down menu n AS with the Quick Model EOM Balances under the New Model n mode are continually re forecasted with each new download n Remember as EOM Balances are re forecasted so is the New FORECASTING WITH TREND DATA The tren
328. ur decisions and review in ALCO and Board meetings 4 Net Interest Income is computed and compared by selecting the Shock Current Balance Sheet and Rates time horizon from one to four years The Shock Interval may be chosen from the preset menu selection or you may customize it to coincide with your bank s policy limits Compute Rate Shock Current Honth is Dec 2009 Shock Current Balance Sheet and Rates 7 Year Shock intervals 100 bazis points Shock levels a00 200 200 faoa fo fioo foo ano fso Ramped Income Shock Results of the rate TO OOOO E shock income calculation can be Celie seen in the Rate Shock Income report in the Rate Risk Reports directory in Compass 60 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Future Shock You can measure the interest rate risk that is inherent in your forecast by using the future shock calculation Regular Rate Shocks reflect the interest rate risk in last month s balance sheet while the Future Shock analyzes your forecasted balance sheet In the example below the standard Rate Shock O months out would use the balance sheet for October 2009 along with the rates forecasted for November 2009 in the analysis When the election is made to shock the plan 12 months out the analysis uses the October 2010 balance sheet and rates forecasted for November 2010 Compute Rate Shock When calculating Rate Shock a shock will be calculated az of the last updated
329. value C Offset f Aggregating Offset f Distibute replace existing f Distribute as offset Constant FOO0 In the example above the 2007 projection is being changed for Branch 02 using the Quick Edit function Constant This change will project a monthly expense for the branch of 5 000 If you wish you can also manually key numbers in one or more months using the Dept View Tab or even copy and paste projections from a spreadsheet Remember that pasted projections must be in columns not rows and rounded to the nearest dollar ANY CHANGES MADE USING THE DEPT VIEW TAB WILL BECOME PERMANENT Changes made with the Dept View Tab are permanently saved to each branch database The only way to return a plan to its state prior to any adjustments is to retrieve a backup copy of that database Please make sure that any changes you make using this feature can be permanent or easily changed back to what you desire Perhaps the greatest time savings will be realized in using the Dept View Tab to edit multiple branches at the same time 113 1 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 SBU CHANGING A PROJECTED INCOME STATEMENT ITEM FOR MULTIPLE BRANCHES First open the Account Projections and select the individual account you wish to forecast All branch modeling buttons must be set to Manual Any branch column set to Modeled cannot be changed using the Dept View Tab Also you will not be able t
330. value and affects the Driver Rate not the Offering Rate This means that your Offering Rate model will reference the Driver Rate including any lag period Pricing Model Hodel Selection f Manual f Quick Model Cancel f New Model Save fe Savings Rate _ Save As Driver PRIME e ne Delete In this example the Savings Rate model includes a one month lag to me B aaa Prime Rate For forecasting purposes the model will use the Prime Rate as of one month prior Notice the modeling calls for a price change to 25 BPS when Prime goes below 6 25 When the one month lag is included in the model the Savings Rate will not change to 25 BPS until one month after Prime Rate goes below 6 25 This may not be the best scenario when rates decline as the lag is applied in the same manner if rates are increasing or decreasing Current Price Calc E dit Spread D E Ean H i Add Insert Delete Please notice that the Prime Rate goes down to 6 in the month of September 2008 Applying the one month lag to this forecast will change the Offering Rate on Savings to 25 BPS one month after Prime goes down or not until October Rate Forecast Screen 3mo Thil GmoTbil TyrCMT 2yCMT Sy CMT SyrCMT 1OyCMT 25yr PRIME 2008 Jan 275 275 271 2 48 251 2 98 a74 4 33 6 98 Feb 275 275 271 2 48 251 2 98 a74 4 33 6 98 Mar 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 Apr 275 275 271 2 48 251 2 98 a74 4 33 6 98 May 0 00 0 00 0 00 0 00 0 00
331. w much the product rate decreased as rates fell by 100 basis points Compass uses the Average Beta to calculate that portion of an account s balance that reprices annually by multiplying it by the end of month balance Further dividing this product by 12 gives us the amount of the balance that reprices each month To calculate the decay rate in months Compass divides the EOM balance by the monthly repricing balance In the following example Compass calculates 15 basis points rounded from 1538 as the Average Beta for NOW accounts Rising Beta NA 0 00 0 00 Falling Beta NA 0 01 0 30 Multiplying the end of month balance in NOW accounts of 54 608M by the Average Beta of 15 basis points and dividing by 12 gives us the balance repricing per month of 700K When applied to GAP you will see this amount distributed throughout the selected time buckets 0 1 1 3 3 6 6 12 12 24 24 36 36 48 48 49 gt 49 immediate months months months months months months months months months Totals MOW Accounts NOW Accounts 0 piii 1 400 100 4 20 0 401 0 401 0 401 A700 20 303 54608 77 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Dividing the end of month balance of 54 608M by the monthly repricing amount of 700K determines the decay rate in months or 78 Account Wizard NOW Accounts NOW Accounts Enter the Decay Rate System estimate is 78 months months More Into Cancel lt Back Next gt T
332. what name is displayed on your mo G Chart of Accounts Dividends Reports reports You should select a Min minimum Equity Ratio for eeal ChatofAcoouris Dividends Pepots Models Last Files List Fonts Date Formats General use in Rate Shock and Risk Tolerance reporting Yield Scenario Updates defaults to Always prompt first This Bank name Sample Bar controls the message received when loading the Min Equity Ratio gop Nonparallel Rate Scenarios Non Parallel Data in Risk Yield Scenario Updates Always prompt fist Compass defaults to Include when possible You can keep Non Parallel Data in Risk Compass include when possib the results off the report by selecting Always exclude Hide Instrument ID s J Hide Instrument IDs will show the hashed instrument IDs in the Prepayment Utility OF Cancel Chart of Accounts The Chart of Accounts tab contains various options General Chart of Accounts Dividends Reports Models Last Files List Fonts Date Formats Auto compute x Allow Prepayment of New Maturities 4 1 Reinvest Net Income x Auto compute Base Yield Keep New Balances Constant 4 1 User has Excel Addin compute time ts slower x Don t Allow Negative New Balances in Maturing Accounts Cancel Auto compute Please leave this option checked When checked the projection screen data will automatically refresh whenever
333. y NOTE If at any point in the DataBridge process you wish to close Compass and start over Compass will automatically save your work You may reopen your Total Bank plan and rerun the DataBridge as many times as you wish F Print a copy of the dbErrors log error report Select File Print from the left hand corner of the small box not from top of your screen Total balance of maturity data is not equal to the last EOM GL Balance for Account and Account has an EOM weighted yield of rate and an Average Monthly GL yield of rate error messages will be corrected later T DataBridgeDownlondERTSPST6g NOREST I e a File Edit Format View Help N Users SBU Update sample Bbranch O1 mdb has the following errors GL Code 101000 in Line 1 in the GL Extract File PLANGLA is not in the Balance Sheet Correlation Table GL Code 101000 in Line 1 in the GL Extract File PLANGLA is not in the Balance Sheet Correlation Table Total balance of maturity data equals the last EOM GL Balance for all accounts on the following accounts the EOM weighted yield differs from the Average Monthly GL yield by more than th Account Eom weighted Yield Avg Monthly GL Yield EOM Avg comm Loans Float w FL 4 32 4 20 0 12 N Users SBU Update Sample 6ranch O2 mdb has the following errors CD Code c3 3M in Line 580 in the Deposit Maturity File PLANCD is not in the Deposit Maturity Corr CD Code A9 17M in Line 701
334. y to each cell adding subtracting the distributed value to from the existing dollars Example of Distribute as Offset After Edit Branch 01 Branch 0 Branch 03 Branch 04 Admin Funds Manager Tota Doe Sep f Annual growth rate 13 000 2445 2 500 2 000 Oct 13 000 260 2 500 2 000 Cancel C Ramp to a value _ Cancel Hov C Ramp fromrto a value Dec Quick Edit Manual Manual Manual Select a Quick Edit Option f Constant Cycoyom Co Distribute Last Calculation Results 13 000 eat t 2 500 2 000 13 000 2394 2 500 2 000 C Offset S007 Jan f Aggregating Offset Feb C Distribute replace existing p fe Distribute as offset el 12000 Jun Jul Total Average Ort Trend Now Dec 13 653 232 2 B26 2 100 13 652 25 2625 2 100 15 652 2 69 2625 2 100 13 650 bee 2525 2 100 13 650 2640 2625 2 100 21 01 Aug 13 649 2657 2625 2 100 21 03 Sep 13 648 2 6 6 2625 2 100 21 049 13 648 2694 2625 2 100 13 647 eel 2 Bad 2 100 13 647 Zied 2 Bad 2 100 mm 9 a G Ean G Ean G G aa G Eaa G Aan G aa G aa G A a G E a SToa Poa a aia D 20 946 Apt 13 651 2 106 2625 2 100 20 963 May 13 651 2 U4 2625 2 100 20 980 This example shows an additional amount of 12 000 being added to the Total column for 2007 The Offset to each monthly total will be 1 000 which is distributed proportionately to each branch Branch 01 in January 2007 received 653 of the additional 1 000 as it had 65 29 13 000 of the prev
335. ysis Reports 7 7 al Olea A Departmental Analysis report also exists in the Reporting area so you can generate ane ompube Audi ha Dieparincnta anaes account level information by branch The Departmental Analysis can be generated for EF Funding and Profitability Analysis Balance Sheet and Income Statement accounts just right click and change the Liquidity Analysis p TI Monthly Action Plan roperties 119 Plansmith Corporation Simplifying Complexity Last Updated 1 30 2015 Branch Comparison Reports Your SBU or Consolidation contains a unique set of reports called Branch Comparison reports These analyses can assist with breaking down branch contributions to the total bank as well as various business entities within a consolidation The analyses include a comparison of loan and deposit data as well as an income statement comparison Fly Branch Comparison Deposit Comparison fase Income Comparison Ey Branch Comparison TF Delete k Loan Comparison Display Properties Fy Basic As with the other Compass reports simply right click to Adjust Font open the report Properties in order to change the data all Averag sets and time frames being compared Copy for script Paste into script The Plans To Include list contains the units being compared To remove a unit from the comparison simply uncheck its box at left Report Properties Deposit Comparison

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