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HOME > Asset Liability Management

Asset Liability Management

ALM Solutions

Simple balance sheet management is a thing of the past. Today credit unions must continuously monitor and manage the risk to ever more complex balance sheets. Regulatory requirements continue to focus on preparing adequate assumptions, what if scenarios and risk mitigation analysis.

Credit union staff and boards are challenged by the need to devote increasing time and resources to ALM management while operating with limited resources to do so. Vizo Financial exists to support your credit union with the resources and expertise you need. We have services to match the budget and complexity of all size credit unions.

For additional information, contact one of our ALM Solutions Specialists at

ALM analysis is time-consuming business, and the cost of hiring a full time ALM analyst can be more than your credit union’s budget can bear. Having a trusted resource to process your data and perform modeling frees your staff to perform other functions. But wouldn’t you like the convenience to test rate strategies or perform what-if scenarios whenever needed?

ALM Direct is an Internet-based solution that provides you with the advantages of both an in-house and outsourced modeling solution. We provide the processing of your data, delivery of your ALM reports and analysis of your results, which provides expertise to the modeling process. Because you have online access to the model, you have the in-house capability to update assumptions and perform “what if” income simulations as needed.

Our ALM analysts have expertise in ALM modeling and the dynamics of interest rate risk. Our team is available to help you, your staff, ALCO and board understand the risk in your balance sheet and how to manage it.


  • Monthly or quarterly model processing and report production.
  • Summary Analysis – a custom report prepared by experienced Vizo Financial staff to help you interpret model reports with an ALCO friendly format.
  • Forecast earnings under different business and market assumptions.
  • Assess long-term interest rate risk with net economic value analysis (NEV).
  • Comply with regulations for interest rate risk management.
  • Online access to your data, assumptions and reports.
  • Unlimited "what if "analyses.
  • Unlimited model support.
  • Model training and initial setup.
  • Assistance with assumption development.
  • Policy reviews and policy limit assistance on request.


ALM Direct is a complete solution for all your Asset/Liability and earnings forecasting needs. Following is just a sampling of the presentation quality reports available:

  • Forecasted Income Statements
  • Net Economic Value of Equity
  • Repricing and Cash Flow Gap
  • Interest Rate Risk Compliance
  • Market Value vs. Book Value
  • Effective Duration and Convexity
  • Assumption Documentation
  • Liquidity Reports

Since assumptions are a necessary part of the ALM and forecasting process, you need a tool that allows you to control those assumptions appropriately. ALM Direct allows credit unions to build various market scenarios under which they can model their balance sheet, income statement and net economic value of equity (NEV).

  • Level of interest rates – By adjusting the overall level of rates, credit unions can model the impact of “parallel” rate shocks on the institution. This is the most common form of scenario analysis.
  • Slope of the yield curve – Understanding the impact of “non-parallel” rate changes is an emerging requirement for regulators and progressive practitioners.
  • Prepayment sensitivity – Credit unions can quickly model scenarios where customer prepayments are more or less sensitive than predicted by standard prepayment assumptions.

ALM Direct enables you to define custom balance sheet growth and reinvestment rules. This allows senior management to forecast using different business strategies to see their impact on the bottom line. Using ALM Direct, credit unions can model unlimited “what if” scenarios.

  • Define growth as a target balance or forecast only the new volume
  • Reinvest cash flows and new money into user-defined instruments

ALM Direct is the branded name of our service. The software that drives the modeling is ZM Financial Systems’ online ALM model. The model offers the following features.

  • Advanced instrument-level analytics.
  • Comprehensive reporting package.
  • Customized chart of accounts.
  • Full NEV, NI and NII simulation.
  • Unlimited scenario analysis.
  • Transparent assumption reporting.
  • Income simulation available over a 1 to 10 year horizon.
  • Instantaneous and parallel rate shocks as well as lagged and parallel rate shocks, rate ramps and yield curve shifts.
  • NEV discounting to a yield curve (U.S. Treasury, LIBOR or FHLB curve)
  • Mortgage prepayment model or support of user defined prepayment tables.

As with any modeling solution, supplying accurate data about the instruments currently on your balance sheet is paramount. We make this process easy and transparent. You supply data files from your data processor and several simple Microsoft Excel templates. We upload the data into ALM Direct and process your data and reports. The reports are available for you to retrieve from the website.

Since small credit unions balance sheets do not change dramatically over time, you can save time and money with less frequent processing.

ALM Direct Lite is an ALM modeling solution using the same robust platform as our ALM Direct product; however, it is tailored to the particular needs of a small, non-complex credit union. This program is suited for credit unions with assets of approximately $30 million and under that need an expert to help the credit union gauge and understand their interest rate risk without taking away from the bottom line or valuable time from credit union management.


  • Annual and semi-annual processing available to provide a more cost effective solution.
  • Utilizes Aires files for model input which reduces the complexity of obtaining data files from your core processor.
  • Comply with regulations for interest rate risk management.
  • Assess interest rate risk using income simulation and net economic value (NEV) analysis.
  • Forecast earnings under different business and market assumptions. Our team of analysts will run “what-if” scenarios to help you make sound business decisions.
  • Expert ALM staff to help you interpret reports.


  • Annual, semi-annual or quarterly processing and report production,
  • Summary Analysis – a custom report prepared by experienced Vizo Financial staff to help you interpret model reports and provide financial trends, peer reviews and an economic update.
  • Unlimited support from our experienced ALM analysts.
  • “What-if” runs performed by our ALM analysts.
  • ALM training and initial model setup.
  • Policy reviews and policy limit assistance on request.

We offer two different levels of model validation depending on the need and complexity of the balance sheet being modeled.

A model validation strengthens reliance on the ALM model to help make sound business decisions and satisfies regulatory requirements. With a model validation, areas of potential weakness are identified along with recommended changes to improve the accuracy of the model and limit model risk.

Our service offers credit unions two levels of validation:

  • Model Validation - examines data inputs, assumptions, model processing, model reports, policies and ALM processes. The credit union receives a documented report of all findings and suggested recommendations.
  • Parallel Model Runs – The credit union’s data and assumptions are input and processed on a second model. The credit union receives a report comparing the output of both models. A parallel run may be performed independently or in addition to a model validation.

With Vizo Financial’s ALM professionals on staff, we are able to help your credit union with all of your ALM needs. For credit unions with an in-house model, we can customize services to meet your specific requirements.

  • Policy development or review.
  • Establishing interest rate risk limits.
  • Assumption development.
  • Review of model output reports accompanied by a written analysis to help interpret the interest rate risk position of the credit union.
  • Specific education and training for your board, ALCO committee and staff.