A new software product is aimed at helping bankers manage their investment portfolios while complying with Federal Accounting Standard 115.
Plansmith Corp., Palatine, Ill., will introduce BondWorks next month.
The financial consulting and software company is best known for its Expert Banker product, an asset/liability management system in 1,000 institutions.
With BondWorks, bankers will be able to analyze their portfolios and explain them to boards and examiners through graphics, said Craig Hartman, Plansmith's president.
Diane Shomo, vice president of research and development, said BondWorks will show banks how the rule will actually help them with portfolio decisions.
"It recognizes in theory and in practice that 115 is a watershed shift in managing banks' portfolios," she said.
The rule requires banks to carry available-for-sale securities at market value.
The Windows-based product retrieves bond price information from a data base, measures capital risk, calculates profit and loss within the portfolio, and projects market values as rates change.
Ten investment instrument types are covered, including mortgage-backed securities, collateralized mortgage obligations, and government securities.
The average price for the product will be $7,500, said Mr. Hartman.
The program automatically computes current book value and profit for each bond, amortizes the premium or discount, and computes the yield.
Bankers can also use the software to assess a portfolio's impact on capital and liquidity and predict how new security purchases would affect the bank.
BondWorks has graphic capabilities to show portfolios in a pie chart format, by portfolio composition, total dollars, or individual issues.
The system can also generate profit-and-loss graphs. All these displays can be used for presentations.
"It's a slick product," said Mr. Hartman. "We're taking complex information and making it understandable."