Plansmith Blog

Dave Wicklund

is the Director of Educational & Advisory Services at Plansmith. He's a regulatory expert with 20+ years of experience as a senior bank examiner at the FDIC. Book time with Dave if you have questions or want to get started with a risk advisory service.

Recent Posts

Wayne Gretzky, the Barber Shop, and Your Contingency Funding Plan… What They Have In Common, and What You Should Be Doing NOW - Part I

Posted by Dave Wicklund on 3/24/20 9:40 AM

In perhaps the most overused sports quote of all time, hockey legend Wayne Gretzky said, “I skate to where the puck is going to be, not where it has been.” That piece of advice is usually used to inspire people to look ahead to emerging markets and business opportunities. Right now, however, I think that quote can serve as a guide for us to examine where this is all going, and how we should be planning for what’s coming next. We know where the puck has been; rates have dropped to historic lows, the stock market has plummeted, most of you have closed your lobbies to commercial traffic, and you’ve probably taken numerous other steps to try to limit the impact that this pandemic will have on you and your bank or credit union.

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The 4 Big Backtesting Questions Revisited

Posted by Dave Wicklund on 2/5/20 2:50 PM

As we move into a new year, you may still be working on a few of those items you didn’t quite get to in 2019. And for a lot of our clients, one of those items is often backtesting. Given all the confusion surrounding backtesting, it can be pretty easy to keep pushing it to the bottom of the “to-do” list.

So, we thought it might be a good idea to dust off a blog I wrote back in 2015 to jump start your 2020 so you can get one more thing crossed off your list. In that blog, we looked at a few of the most common questions we get on backtesting. Specifically, we discussed who should do it; how often it should be done; what period should be covered; and if you need to backtest just model results, or also key model assumptions.

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4 Reports for Analyzing & Understanding IRR

Posted by Dave Wicklund on 11/18/19 1:48 PM

Knowing and understanding your organization's risk position is important. Regulators expect you to keep a close eye on your IRR exposure and be ready for a rising rate environment.

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Regulatory Expectations: IRR & Liquidity

Posted by Dave Wicklund on 11/6/19 10:51 AM

Does your organization have the IRR and Liquidity knowledge it needs to succeed?

Regulatory guidance emphasizes the importance of effective corporate governance and outlines expectations for both board members and senior management personnel. Specifically, interagency guidance identifies the board of directors as having the ultimate responsibility for the risks undertaken by an institution – including IRR and liquidity.

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The Real Reasons to Outsource Your IRR

Posted by Dave Wicklund on 10/15/19 11:01 AM

As you grow, your organization has more and more things to manage.

  • Strategically, you’re working to find the right markets to penetrate with the ideal products and services.
  • Financially, you’re making sure your earnings are meeting or exceeding targets.
  • And organizationally, you’re looking for the right talent to expand and grow.

One thing you can’t ignore is the role Interest Rate Risk plays in the banking industry today.

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What is Managing Your Own IRR Really Costing You?

Posted by Dave Wicklund on 4/10/19 10:53 AM

Regulatory compliance costs are skyrocketing!

The focus of safety and soundness examinations continues to move towards asset/liability management and ensuring financial institutions are complying with the guidance issued in the last several years.

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A Response to the FDIC: Brokered Deposits and High-Rate Deposits

Posted by Dave Wicklund on 3/20/19 11:17 AM

As you may have seen, in February we did a webinar on recent changes in the way Regulators are evaluating funding risk and the new measurements they are using to assign the “L”-Liquidity rating. As we noted, their focus has been on brokered deposits, “potentially volatile funding sources,” and “high rate deposits.” We pointed out numerous weaknesses in the way these funding sources are being assessed and limited.

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Why Regulators Care About Surge Deposits (And You Should, Too!)

Posted by Dave Wicklund on 5/17/18 8:40 AM

So why do we keep hearing about “surge” deposits and how important it is to know if you’re holding any? Well, it might be because in the past 10 years, CD balances in FDIC insured institutions have fallen by $880 Billion; yes, that’s Billion with a capital “B.” And while that may be the bad news, the good news is that over the same time period, non-maturity deposits (DDAs, NOWs, Savings, and MMDAs) have grown by $5.9 Trillion (with a capital “T”).

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Surge Deposits: 3 Regulatory Expectations

Posted by Dave Wicklund on 2/1/17 8:01 AM

In the last 5-10 years, there's been a lot of growth in DDA, NOW, MMDA, and savings accounts. These deposits can provide a great low-cost funding base, but they can also draw attention at your next exam.

Examiners are looking closely at these surge deposit balances. Specifically, they're looking to see if you've considered surge deposits in 3 ways.

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Answered: Bankers' 5 Most Painful Questions about Backtesting

Posted by Dave Wicklund on 1/23/17 8:18 AM

Backtesting can be a painful topic for bankers. In this post, I'll answer the top 5 most common questions I hear about backtesting. I'll reference my first post, Independent Review, Model Validation, and Backtesting: Same Thing, Only Different, so you might want to revisit it before reading on. In that blog, we looked at the interrelationship of these three items and brought up a few questions on backtesting.

Specifically, we questioned 5 things: who should do it, how often should it be done, what period should be covered, do you need to backtest model results and assumptions, and why even bother if market rates really aren’t changing.

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