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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