BAS September 2022 Presentations

Impact of Asset Quality Issues

Diminished earnings and capital  Increased provisions and legal/collection expenses.  Non ‐ earning assets (e.g. non ‐ accrual loans, OREO).

Reduced borrowing capacity  Removal of problem assets from collateral pool.  Increased collateral “hair cuts”.  Elimination of borrowing lines.

FHLB Borrowing Example

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Falling Below Well Capitalized Impacts Liquidity

Brokered deposits restricted  Banks may not accept or renew brokered deposits – no waivers.

Rate caps  Deposit offering rates capped at the average national rate plus 75 basis points, unless the FDIC grants a local determination.

(Part 337.6 & 337.7 FDIC Rules and Regulations)

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