Dynamic Balance Sheet Modeling for Business Planning
September 21, 2021 | Jordan Taylor | UMB
The pandemic has caused an abundance of uncertain times. It’s becoming repetitive to talk about, but it’s of major importance for the banking industry. At one point, it looked like things were getting back normal, but then a new variant of the virus has created some confusion for the future.
For the upcoming budgeting season, we thought it would be beneficial to discuss some dynamic options for balance sheet models that we can run for banks. These models provide an idea of what rate sensitivity analysis could look like if banks wanted to compare different scenarios with different balance sheet totals.
Before we dive in, let’s see a quick market update from second quarter 2021 to now. There really hasn’t been too much change regarding interest rates, as you can see from the charts below. The effective fed funds target rate remained relatively unchanged between .08% and .10% (according to the St. Louis Federal Reserve website) while U.S. Treasury rates declined slightly.
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- Gladstone Commercial Corporation Announces Monthly Cash Distributions for October, November and December 2022 and Third Quarter Ended September 30, 2022 Earnings Release and Conference Call Dates
- Gladstone Land Announces Increase in Monthly Cash Distributions for October, November and December 2022 and Third Quarter Ended September 30, 2022, Earnings Release and Conference Call Dates
- Capital Square Acquires Luxury Multifamily Community Near Louisville for DST Offering
Best Due Diligence meeting in the industry. No sales pitches, senior level decision makers, meaningful discussions and the Broker Dealer networking sessions were especially useful. Thanks to Blue Vault for raising the bar!