2021 Strategic Planning Conference

Liquidity & Interest Rate Risk

Bank Profile - Liquidity - On-Balance Sheet - Overview

LIQUIDITY - ON-BALANCE SHEET

Fidelity Bank (West Des Moines, Iowa)

Liquid Assets to Total Assets

35%

30%

30%

29%

25%

22% 25%

20%

20%

19%

Metrics

17%

17%

15%

Bank State All Banks

12% 11%

11% 10%

10%

12% 15% 13%

9%

7% 8% 8% 8%

9%

10%

5% 3% 3% 5% 4%

8% 8%

8% 7% 5% 3%

7%

5%

2% 4% 4% 3% 4%

3% 3%

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

Liquid Assets to Total Assets (Breakout by Type)

Net Loans to Assets Ratio

87% 90%

32%

90%

85%

85%

28%

83% 84% 84%

85%

81%

80% 81% 81%

80%

81% 82%

24%

79%

80%

78% 77% 79% 76% 77%

79%

20%

Metrics

76%

75%

74%

74%

Metrics

73%

16% 12%

71%

FFS Unpl. Sec IBB Cash

70%

69% 70%

Bank State All Banks

65%

8%

64%

60%

60%

4%

59%

2010Q4

2013Q4

2016Q4

2019Q4

2010Q2

2016Q4

2018Q4

2020Q4

2008Q2

2008Q4

2009Q2

2009Q4

2010Q2

2011Q2

2011Q4

2012Q2

2012Q4

2013Q2

2014Q2

2014Q4

2015Q2

2015Q4

2016Q2

2017Q2

2017Q4

2018Q2

2018Q4

2019Q2

2020Q2

2020Q4

2021Q2

2008Q2

2008Q4

2009Q2

2009Q4

2010Q4

2011Q2

2011Q4

2012Q2

2012Q4

2013Q2

2013Q4

2014Q2

2014Q4

2015Q2

2015Q4

2016Q2

2017Q2

2017Q4

2018Q2

2019Q2

2019Q4

2020Q2

2021Q2

• For these charts, liquid assets include: unpledged securities, Federal Funds sold, interest-bearing bank balances, and cash & due. • Keep in mind there is some nuance with liquid assets. For example, small nonrated Municipal bonds might be difficult to sell or pledge, and some loans could be sold fairly easily (e.g. government guaranteed SBA or FSA loans, conforming 1-4 family loans). • Since loans are generally illiquid, the Loans to Assets Ratio will typically move inversely of changes in liquid assets. For example, higher loan volume as a percentage of assets would lead to a lower amount of liquid assets as a percentage of assets.

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Liquidity & Interest Rate Risk

Bank Profile - Liquidity - Funding Cont'd - Overview

LIQUIDITY - FUNDING (continued)

Fidelity Bank (West Des Moines, Iowa)

Funding Amounts Over Time (Granular)

100M

80M

Metrics

FFP Other Borrowings FHLB Listing Service Brokered Deposits

60M

40M

20M

TCD>Ins Limit Core Deposits

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

Funding Amounts Over Time (Broad)

100M

80M

60M

Metrics

40M

Wholesale Core Dep & TCDs>250M

20M

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

Funding is a critical aspect of liquidity. Local core deposits are preferable as these are generally more stable and lower cost than wholesale funding. It is easier for banks operating in areas with more local deposits than loan demand to maintain a solid amount of liquid assets. Banks which struggle to obtain local deposits often rely on wholesale sources to fund growth.

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