CMS Case Study
Summary of Potential Strategies - 12/31/2021
STRATEGY
EXPECTED RESULTS
RISKS
3. Deposits:
Tradeoff: COF vs. balances.
Liquidity.
Update on pricing and strategy: In context of current liquidity and/or rising rates?
Lagging mitigates near
IRR.
term rising rate exposure.
Update on deposit monitoring process/strategy (is money being spent/invested, or leaving due to rate?)
Discuss @ ALCO.
Discuss @ ALCO.
Discuss impact of our liquidity profile vs. market/competition on pricing decisions.
Review ability to lag market rate movements.
Review and discuss prime indexed NMD accounts (NOW vs. MMDA).
See alternative simulation depicting prime indexed MMDA pricing vs. current model assumption of a 50% beta.
See alternative simulation depicting short term rates up 50bp and the impact from indexed accounts.
Update on Kasasa pricing and strategy
Review prior rate cycle analysis and projections relative to future moves.
Revisit MCOF and implications for product pricing & growth strategies.
Review tiers and large balances in preparation for potential rate pressure
Update on Municipal deposit strategy and alternative forms of collateral management (ICS). Discuss timing of collateral discussion vs. rate expectations.
Update on CD Strategy
Continue to review deposit retention and balance expectations for growth experienced since March 2020 (COVID deposit surge).
Cloyd Bank & Trust - Page 36
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