Asset Management Group
When it comes to the success and growth of your credit union, it matters who you work with.
At Catalyst, managing assets is what we do. Our asset management service is one of the oldest in the industry, designed to be unique to you, meeting your specific balance sheet, membership, strategies, goals, and objectives.
We pride ourselves on bringing a “just right” blend of technology, experience and connections to every engagement, and we take our fiduciary responsibility seriously. Our focus is on you and ensuring we provide the advice and actions that will build long-term success.
To be a guide requires expertise and experience, a deep understanding of the tools available and many years deploying those tools to maximum effect. Our team is deeply active within the industry, sharing knowledge and bringing new ideas to the fore. You can count on Catalyst to not just create a map for you to follow but to take every step of the journey alongside you. Your success is our success.
Your credit union is unique. Your members are unique. Your challenges are unique. We’ve seen enough to advise you well, but we’ve also experienced enough to know that every strategy must fit the unique outlines of your institution. That’s why our strategic planning is never cookie cutter. No, it’s built after a firm understanding of your management team, board members, membership base, goals and objectives. It is only through this thorough and rigorous foundation building can we develop, along with you, a long-term balance sheet strategy to help you achieve your goals and objectives.
Catalyst employs a broad range of advanced financial models and analytic tools coupled with decades of experience to support the development of your strategic roadmap and the tactical decisions necessary to make your goals a reality. Whether you need help with interest rate risk, liquidity, derivatives, loan participations, subordinated debt; our team has analytics to support any decision making.
Catalyst pairs insight and analytics with actionable intelligence, deploying a variety of financial tools and solutions to bring your financial strategy to life.
Important Disclosures:
"Catalyst" is a brand name for the financial services business conducted by Catalyst Corporate Federal Credit Union ("Catalyst"), both directly and through its subsidiaries, including CUSOURCE, LLC, d/b/a Catalyst Strategic Solutions ("CSS"). Balance sheet management services and asset liability management services are offered through CSS, a SEC registered investment adviser. CSS is a separate entity from Catalyst and all investment decisions are made independently by CSS employees. Neither Catalyst nor CSS provide its clients with legal, tax or accounting advice.
Frequently Asked Questions
Securities markets are sophisticated and credit union asset/liability management requirements are becoming increasingly complex. Catalyst's Asset Management Group (AMG) employs a comprehensive balance sheet approach to assisting credit unions in the management of their investment portfolios. Advisors make recommendations that complement the individual credit union's loan and deposit structure.
First, the ALM service incorporates a key ratio analysis, designed to help credit unions identify areas for improvement with regard to pricing deposit accounts and loan products. This analysis also assists credit unions in managing expenses associated with the day-to-day operations of a financial institution. Second, the advisors review the interest rate risk profile obtained from the ALM analysis to determine the prudent amount of rate risk for each credit union's portfolio. This practice enables advisors to position the credit union's balance sheet and investment portfolio. In a nutshell, it's all about managing risk and return. Finally, Catalyst's staff of investment professionals monitors the direction and outlook for interest rates and stays abreast of spreads and yields on the various investment alternatives. These practices enable them to make suitable recommendations based on the interest rate environment and balance sheet risk profile.
Catalyst's investment professionals stay abreast of all NCUA regulations, revisions, and "letters to credit unions" pertaining to the investment and ALM arenas. Part of the process is updating internal systems to meet all reporting requirements set forth by the regulators. Whether a credit union needs a number to close the books or to complete a call report, Catalyst's systems generate a report that will provide it. These procedures ensure that investment recommendations made by the advisory team are regulatory compliant.
Monthly, the AMG will make available a complete set of "5300 ready" bond accounting reports via the website. These reports, which contain everything credit union staff will need to close the credit union's books, are available by the close of business on the second business day of the month. To give credit union accounting departments a head start, two days prior to the end of the month, a preliminary set of accounting reports is made available. These reports provide accrual detail and amortization/accretion details. Quarterly, each advisor prepares an in-depth investment portfolio and ALM review for each client credit union. This packet includes a detailed ALM review and an analysis of the current holdings in the investment portfolio. One of the integral parts of this analysis is a parallel and sustained 300-basis point portfolio shock to satisfy regulatory requirements. The analysis concludes with balance sheet recommendations.
In the initial steps of the process, we will work with credit union management, board of directors, or any associated committee to develop a regulatory-compliant set of investment and ALM policies that suit an individual credit union's specific needs.
At the foundation of the AMG is education. An advisor will schedule an educational session for credit union staff and any board members that the credit union would like to include. These sessions normally take three or more hours, during which the credit union's advisor will discuss various investment alternatives in detail. Credit union staff will gain a better understanding of the investments to assist in their decision making. This education continues on an ongoing basis. As credit unions experience turnover on various committees or on the board of directors, additional educational sessions and refreshers may be scheduled. In addition to the formalized training, each credit union's advisor is available to discuss portfolio strategy individually, as necessary.
The answer to this question depends on the credit union's specific needs. Catalyst's experience indicates that some credit unions like to be contacted daily, while others may only want to be contacted bi-weekly. Either way, the relationship will be tailored to best fit the credit union's needs.
It is not necessary for credit union management to relinquish control of their investments. The AMG team works for the credit union only as an agent. After reviewing the ALM profile and identifying any liquidity concerns, the advisor makes a recommendation for a security that fits each credit union's balance sheet. An appropriate credit union staff member will make all final decisions regarding whether a security is purchased. Upon approval, the advisor buys the security in the credit union's name and it is delivered directly to the credit union's safekeeping account versus payment.
Catalyst’s AMG is fee-based. It is not commission-driven like a brokerage firm. All advisory staff members earn salaries and do not receive commissions. This arrangement guarantees that Catalyst's advisors strive hard to do what is in the best interest of the credit union – not the advisor. As an advisory service with a sustained relationship with the buyer, Catalyst lives with the recommendations its advisors make, and are therefore incented to make recommendations that benefit purchasing credit unions.
The advisors and ALM analysts represent a broad spectrum of credit union and financial services industry experience. This team of professionals combines this wealth of knowledge with the market analytics available on the Bloomberg Financial Markets system to provide sound investment advice, helping each credit union develop specific strategies to reach its financial goals.