BAS Case Study - March 2023

Sunny State Bank

LIQUIDITY - FUNDING

Funding Amounts Over Time (Broad)

10M 20M 30M 40M 50M 60M 70M 80M

Metrics

Wholesale Core Dep & TCDs>250M

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

Possible Funding Concentrations (% Total Assets)

12%

10%

8%

Metrics

Brokered Deposits FHLB Listing Service Public Funds Other Borrowings

6%

4%

2%

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

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. Funding concentrations will typically be cited when a single funding source exceeds 10 percent of total assets, which is represented by the dotted horizontal line in the chart. The primary risk of a funding concentration is that the funds might have to be replaced quickly or at unfavorable terms if the condition of the bank deteriorates.