For most depository institutions, one of the biggest challenges of risk and profitability management revolves around the treatment of non-maturity deposits (NMDs).  Numerous internal models of risk and performance measurement require that the organization establish an explicit view on NMD behaviors.  The challenge derives from the fact that principal and interest cash-flows on most NMD products are not governed by contracts or rules, but rather must be assumed. This is usually done through some type of historical time-series analysis. While this historical analysis is a useful starting point for assumption setting, it is insufficient for risk management purposes because it fails to consider the impact of such things as the depository’s unique growth plans, internal governance processes, changes in laws and technology as well as the economic environment in which the firm operates. All of these things can result in potentially material differences in actual deposit behaviors relative to historical experience. When organizations ignore these factors and assume that NMDs are intrinsically valuable, they are prone to generate risk and profitability measures which are incorrect and misleading. As NMDs are generally the primary funding source for most depository institutions, any errors in behavioral assumptions will have a material impact on all downstream risk and balance sheet modeling processes.