Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

TRENDS: MEMBER FEEDBACK

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FHLB DES MOINES MEMBER FEEDBACK

Executive Summary of Member Feedback

Asset and loan growth slowing from cycle peak. This is most pronounced with larger banks Demand for wholesale funding typically lags growth cycle by 12- 15 months

Cost of deposits and loan to deposit/share continue to rise. Members diversifying liquidity channels. S.2155 may improve liquidity Declaration of FHLB advances as “volatile” funding problematic

Growth Slowing

Liquidity Tightening

Marginal Cost of Funds

Bank encouraging members to employ Marginal Cost of Funds when pricing liabilities.

Slowing growth, lower rates, leading to lower margins due to slight asset-sensitivity positioning

Margin compression

Wholesale funding subject to last in, first out.

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