Asset Liability Hedging

Chatham’s ALM Hedging services help regional and community banks to reduce funding costs and manage asset/liability sensitivity through the use of derivative products.

As a leading firm specializing in interest rate hedging, our experienced team will work with you to develop effective hedging strategies that meet your ALM objectives. We will review your ALCO package to gauge your interest rate posture and use sophisticated models to simulate the impact of various strategies on your net interest income and key reporting ratios. Leveraging our high volume market presence, we will work on your behalf to execute each trade at the best possible terms and pricing.

During our strategic discussions, and upon completion of a transaction, our team of derivative accounting experts will manage all aspects of accounting – from helping to structure “accounting friendly” hedging relationships and writing designation memos, to creating monthly journal entries and performing required effectiveness testing. We want to ensure that the best economic solution receives the best accounting treatment.

We have found that derivatives can be used, not only to manage interest rate sensitivities, but also to achieve lower funding costs. We will work with you to evaluate your funding alternatives and to see if derivatives can be used to maximize efficiencies. We will also dissect structured funding solutions to ensure that you understand the implied pricing for embedded optionality.

Through your own password protected website, you will have 24/7 access to a wealth of information on your hedging portfolio, including daily updated valuations, market pricing, counterparty credit exposure, reports on demand, and an online file cabinet of all transaction-related documents.