BAS Presentations - March 2023

BANK INVESTMENTS INVESTMENTS

Equity Instruments 2 (stocks)

Debt Instruments 1 (bonds)

Cash & Interest Bearing Balances

• Cash • Federal Funds Sold • Deposits at correspondent banks • Time Certificates of Deposit

• U.S. Treasury Securities • U.S. Government Agency Bonds • Mortgage or Asset Backed Securities

• Mutual funds • Shares of corporation stock

• Municipal Bonds • Corporate Bonds • Foreign Debt Securities

1 A debt security (bond) is essentially a loan from the investors to the issuer. In return for the bond proceeds, the issuer promises to pay interest and to repay the debt on a specified date. Issuers may include corporations, municipalities, the federal government, or a federal agency. 2 Equity securities (shares of stock) signify an ownership position in a corporation and represent a claim on a proportional share of the company’s assets and profits. Only a certain type of company called a corporation issues stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock. Banks can only invest in equity instruments allowed by regulation (e.g. membership stock in Federal Home Loan Bank, bankers’ banks, perhaps community development or venture capital businesses, etc.).