Principles of Performance- Optimizing Performance in the Finance Function of the Credit Union

This program will develop the financial and strategic acumen critical to contemporary credit union management. Beginning with key financial concepts and cash flow fundamentals, attendees will build a robust framework for risk/reward decision-making. Detailed attention will be given to the measurement of interest rate, option, and credit risk across sectors common to community financial institution balance sheets.

Attendees will apply sector-based findings to investment portfolio, loan decisions and asset-liability management. Sessions will emphasize a hands-on approach to connect theoretical concepts with real-world problems and decisions.

DAY ONE - May 13th:

Module 1: Do We Have a “MoneyBall” Problem?
After providing an overview of the economic cycle, we will explore the shortcomings and dangers of interest rate forecasting and other common approaches to strategic decision-making in the Investment Portfolio and across the Balance Sheet. We will illustrate why such inaccuracies necessitate a scenario-based risk versus reward management process.

Module 2: The Use and Abuse of Conventional Analytics
Are conventional metrics such as yield, OAS, spread, average life, duration, and EVE accurate? Regardless of their accuracy, are they useful and how should these metrics be used? Moving beyond common dashboard metrics, attendees will start to develop a more consistent and useful methodology for evaluating cash flow risk versus reward starting with the concept of break-even.

Module 3: Why It Matters and Do We Have a Solution

Is the “game” worth playing better and how can we potentially improve our performance? What does it actually mean to be “better” and what approach should we use? How do we “win” the game? The various ways of “counting the dollars” are explored and we will illustrate how to begin to solve seemingly complex problems with a more appropriate decision-making process.

Module 4: Measuring Future Performance – How Do We Look Forward?
Scenario-based total return will be applied to not only option-free securities but also discrete option cash flow structures. Pricing conventions, rolling the curve, and reinvestment assumptions will be developed.

Module 5: Calculator Workshop
Attendees will apply the findings from Day One to real-world decisions using the PT Calculator™.

DAY TWO - May 14th:

Module 6: Applying the Methodology Across the Balance Sheet
The lessons from Day One will be further connected to demonstrate how a consistent and ongoing process for risk versus reward decision-making can make seemingly difficult decisions easier to execute in a more objective, defensible, and valuable way. This process will be applied to contemporary and timeless challenges facing community financial institutions.

Module 7: PT Score for Credit Unions
Making decisions that lead to optimal performance at a credit union requires perspective beyond the core disciplines of finance, marketing, operations, and credit. In Module 7, we will preview a framework for maintaining good regulatory standing while making strategic decisions within all the core disciplines of the credit union.

Module 8: 3 Big Ideas and Wrap Up

We will wrap up the program with a few big ideas that participants can take back to their executive team. The session will lay the ground work for a follow up module that applies principles learned at the program to their specific credit union.

Event Details

  • When

  • Monday, May 13, 2019 - Tuesday, May 14, 2019
    9:00 AM - 3:00 PM
    Eastern Time

  • Where

  • MD|DC Credit Union Association
    8975 Guilford Rd, Suite 190
    Columbia, Maryland 21046

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