BAS Case Study - March 2023

acquire new deposit relationships through customer service efforts, cross-selling with new loan relationships, and targeted rate increases (as necessary for deposit acquisition or retention).

• Borrowed Funds – The Board of Directors anticipates that Management will continue to utilize borrowed funds, both short term and/or long term, to manage the Bank’s liquidity position in conjunction with actual and anticipated deposit balances, as well as the Bank’s operating and lending needs. • Other Income – Management is directed to seek opportunities to grow other, noninterest income. The Automatic Transfer Service and Payroll ACH products are excellent examples of expanding the services offered to customers while increasing the opportunity for noninterest income. Branch management staff will seek to expand customer participation in the Payroll ACH product. Product training for branch management and teller staff will allow for increase communication with customers of the products and services that may be of use to the customer which will increase the Bank’s overall income and reputation for customer service. Management will also conduct a review of the Bank’s current service charges and fees to identify opportunities to increase noninterest income while remaining competitive. • Other Expenses – The Bank’s expenses should be carefully monitored on an ongoing basis. All opportunities should be pursued to optimize efficiency, eliminate redundancy, and reduce operating expense where ever possible. Specific areas that could yield opportunities for cost reduction or improved efficiency are marketing, legal, training, deposit and debit card products, internet banking, supplies, and building and equipment servicing. The Board of Directors has and will continue to evaluate employee benefit expenses, including medical insurance, Christmas gifts and profit sharing, on an ongoing basis to determine if changes should be made to the benefit provided based on Bank performance and retention of quality employees. See additional discussion of expense monitoring below. • Training – Provide targeted, cost-effective opportunities for ongoing professional development for the management team, including Lenders, loan operations, and Accounting Manager. The goals for bank-wide training are to enhance professional knowledge, increase accuracy and reduce the potential for losses, promote compliance, and increase efficiency. Provide internal and external loan training for the branchmanagement staff to improve customer service and allow for increased lending capacity. • Staffing – The Board of Director’s recognizes the Bank’s employees as the most important resource, as well as the Bank’s largest expense. The Board of Director’s desires to continually seek to retain qualified and productive employees while optimizing payroll and benefit expense and continually seek to improve quality of the Bank’s staff through training and/or hiring to improve efficiency and accuracy. Management should specifically seek to optimize the number of tellers and new accounts employees at each location to ensure maximum productivity and customer service. Additionally, Management will seek to recruit and hire a qualified branch manager for each branch, as well as qualified assistant branchmanagers and/or new account specialists, branch operations clerk, and loan

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