BAS September 2022 Presentations

Scenario: • You’re the president of a bank. • Over the last month there has been an unexpected influx of deposits totaling $50 million. • You need to decide how to use these funds. Options: 1. Seek high ‐ yielding marginal quality loans. 2. Seek lower ‐ yielding safe loans well secured by real estate. 3. Invest is long ‐ term Corporate bonds rated in the lowest investment grade. 4. Invest in medium term U.S. Treasury bonds. 5. Leave the funds in Cash/Fed Funds Sold. Consider the impact on the liquidity position, earnings, and interest rate risk. (Mentimeter)

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Scenario: • You’re the president of a bank and have been tasked with developing a strategy to improve earnings. • Which one of the following options would you pursue? Options: 1. Sell liquid assets to fund growth in high ‐ yielding marginal loans. 2. Being purchasing low ‐ grade Corporate bonds. 3. Eliminate certain loan administration procedures and reduce staffing.

Consider the impact on the liquidity position, asset quality, and earnings.

(Mentimeter)

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