Accolade Asset/Liability Advisory Services

Mortgage Extension in Credit Union Balance Sheets

A combination of structural and seasonal factors are currently depressing prepayment speeds, resulting in the extension of mortgage-backed securities and CMOs. The combination of persistently high inflation and the Federal Reserve’s historically quick rate tightening has lifted longer-term yields and slowed mortgage prepayments, lengthening assets at many credit unions.

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CASE STUDY: Silicon Valley Bank

Watch the recording of Accolade's webinar discussing the evolving developments at Silicon Valley Bank, the lessons we can learn from their situation, and what you can do as a credit union leader to ensure that your balance sheet strategy is positioned for resilience in an uncertain economic environment.

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Accolade Market Update - May 25, 2023

This week covers funding options and strategies for funding structures, the US debt ceiling and impacts to Treasury rates, and an overview of investment opportunities. Special guest Peter Gibson, first time joining the video.

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Mortgage Prepay Speeds Decline

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Taking A Closer Look at Mortgage Extension in Credit Union Balance Sheets

The combination of persistently high inflation and the Federal Reserve’s historically quick rate tightening has lifted longer-term yields and slowed mortgage prepayments, lengthening assets at many credit unions. With 30-year mortgage rates currently near their highest levels in the past twenty years (currently revisiting the range of 7.00%+ levels, initially breached last fall), virtually all mortgages on credit union’s books are exhibiting very low prepayment speeds.

Market Reacts to Recent Fed Meeting

While the markets look forward for the direction of the economy, the Fed is still looking backward for hard evidence that inflation has been controlled. If we see additional data that indicates economic growth is reaccelerating, the prospects for a pause in rate hikes will certainly diminish. Until economic data forms a consistent narrative, we can anticipate that higher levels of volatility will persist.

Auto Lending Trends 2023

Accolade has compiled some data around auto lending trends that may help provide context for setting asset allocation in 2023. While many of the data trends we’re seeing are troubling for auto lenders, we are likely still in the normalization phase from the incredibly low levels of credit issues that we saw through the pandemic period.

NEV Supervisory Test Update – September 2022

The NCUA Supervisory Test is intended to be used to measure asset sensitivity to rate changes by applying standardized market values to the credit union’s non-maturity shares. In early September the NCUA updated its interest rate risk supervisory framework to address concerns about the test's results.

Liquidity Crunch: Ideas to Stay Afloat

Now that we find ourselves in a more attractive rate environment credit unions have a golden opportunity to improve net interest margins and loan-to-share ratios – if only they had the liquidity to support it. This article offers ideas to help your credit union meet liquidity targets.

Bond Meltdown Offers Highest Investment Rates in 15 Years

Over the last nine months we have seen the biggest yield curve shock in over twenty years. After the CPI print for May came in at a higher than expected 8.6% year-over-year rate, the yield curve has rocketed even higher and we are seeing red across virtually all bond prices.

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