Agenda for Monthly ALCO Meetings

1.  Review, correct and approve minutes from last ALCO meeting.

2.  Review current overnight rates and the Treasury yield curve, noting changes in rates over the past month and on a year-to-date (YTD) basis.

3.  Review loan flows, share flows, and core liquidity changes during the past month, quarter, and on a YTD basis.

4.  Discuss investments maturing within the next 90 days, anticipated loan demand, and liquidity needs over the next quarter after taking seasonal factors into account. Discuss changes in liquidity ratio over the past three months. Are contingency liquidity plans necessary?

5.  Review ROA, spread, net operating expenses, contribution to capital after charge offs and FAS 115 adjustments both during the prior month and on a YTD basis, noting any significant deviations from expectations. Discuss ROA projections for the balance of the year.

6.  Review loan and dividend rates. Are they competitive with area banks, thrifts, credit unions that may have overlapping fields-of-membership, and dividend guidelines. Note spread between new car rates and both two-year Treasury yields and share certificate rates. Based on these observations and current liquidity and earnings trends, discuss recommendations to the Board concerning loan and dividend rates for the forthcoming month.

7.  Review investments placed during the past month. Were they in compliance with the ALM policy limits regarding GAP and duration? Were they in compliance with investment policy exposure limits? Discuss investment plans and FAS 115 classifications over the next three months based on liquidity needs.

8.  Compare month-end aggregate investment exposures to investment policy aggregate exposure limits. Note policy variances and discuss plans to remedy.

9.  Review “watch list” investments that are out of compliance with investment policy, noting their unrealized gains or losses, FAS 115 classifications, and divestiture plans if appropriate.

10.  Special agenda items (e.g., equity duration, simulation results, ALM reports from outside consulting services, and projections/budgets for the forthcoming year during 4th quarter ALCO meetings), other new business and old business.

11.  Confirm time and date of next ALCO meeting.

Source: Charles R. Idol, ALM Consulting & Research