BAS Case Study - March 2023

Sunny State Bank

IRR - ASSET MATURITY INFO

Assets > 5 Years / Total Assets

Assets > 15 Years / Total Assets

80%

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

41.6% 41.2%

39.4%

39.5%

71%

71%

70% 70%

69%

38.0%

69%

37.5%

40.8%

67%

70%

66%

66%

35.4%

39.7%

39.7%

65%

64%

34.6%

70%

38.2%

69%

68%

36.5%

31.6% 31.9%

66%

66%

66%

35.2%

64%

64%

60%

60%

32.8%

32.8%

30.5%

Metrics

24.9%

50%

Bank State All Banks

40%

30%

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

Assets > 5 Years / Total Assets (By Category)

Assets > 15 Years / Total Assets (By Category)

80%

5% 10% 15% 20% 25% 30% 35% 40% 45%

70%

60%

50%

Metrics

40%

MBS Loans Bonds

30%

20%

10%

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

• Holding a large amount of long-term assets often corresponds with risk to rising interest rates, because the yield on long-term assets could be stagnant for a long period while rising interest rates cause funding costs to increase. • Keep in mind that debt securities are typically non-amortizing and tend to have longer durations than amortizing loans and MBS; the implication being that a high amount of long term debt securities is more concerning than a high amount of long-term loans and mortgage-backed securities (MBS).