Financial Institutions Case Study: Loan-level Hedging Our Client: A regional bank with an established hedging program. Situation: The bank was looking to expand its loan-level program under the supervision of a former derivatives marketer and had faced challenges on the accounting for its balance sheet derivatives. The bank called Chatham on the advice of its employee, who had prior interactions with Chatham in his former role as a counterparty to other Chatham clients. Summary: Chatham Financial assisted the bank by loading all of its existing trades into our proprietary system, including the balance sheet derivatives that needed accounting re-designations. Chatham reviewed the confirmations on all of the trades, along with the ISDA agreements with existing counterparties, to ensure appropriate terms and counterparty diversification. Chatham hosted management at Chatham’s campus to educate top officials on our turn-key approach to loan-level hedging,…

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Financial Institutions Case Study: Accounting Needs Our Client: A regional bank with over $10 billion in assets that had an existing hedging program and a pressing accounting need. Situation: The bank had executed balance sheet derivatives, but its auditors had expressed concerns about the hedge designation memorandums, encouraging the bank to contact Chatham as soon as possible. Reluctant to partner with a derivatives consultant on any portion of its hedging program, the bank called Chatham nonetheless to schedule a face-to-face meeting. Summary: Chatham Financial reviewed the company’s hedge documentation and traveled to the bank for the face-to-face meeting. Chatham addressed the prospect’s concerns about hiring a third-party advisor and walked the bank through Chatham’s process for creating hedge documentation, the experience in implementing hedge accounting, and the systems Chatham uses to run different types of effectiveness tests. Furthermore, by describing…

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