CMS Case Study

 submitting a written report to the Board at least quarterly; and,

 overseeing the maintenance of a management information system that supplies, on a timely basis, the information and data necessary for ALCO to fulfill its role as asset/liability manager. The Board of Directors shall approve the policy statement not less than annually. Section 4. Responsibilities and Duties of ALCO Given the dynamic nature of ALCO’s role in the ALM function, the items cited below do not necessarily represent an exhaustive list of ALCO’s duties. On a regular basis (at least quarterly), ALCO should hold a formal meeting to:  Monitor and discuss the status and results of recently implemented asset/liability management strategies and tactics;  Review IRR measurement reports and compare exposure levels to policy limits. Determine which key variables affect IRR and assess the expected impact of anticipated major funding shifts or changes in overall investment and lending strategy;  Review the current and prospective capital levels (risk-based as well as leverage capital) to determine sufficiency thereof in relation to: expected growth, interest rate risk, asset mix/quality, regulatory requirements and dividend policy;  Develop alternative strategies as deemed appropriate, which take into account changes in: o interest rate levels and trends, o deposit and loan products, and related market demand issues, o banking regulations o monetary and fiscal policy;  Develop parameters for the pricing and maturity distributions of deposits, loans and investments. Also, ALCO will ensure that it is aware of the overall financial performance of the Bank and, therefore, will keep abreast of significant changes/trends in its financial results. In this regard the committee may:  Review outlook for interest rates and the economy at both the local and national levels;  Review the current liquidity position and monitor alternative funding sources;  Forecast and examine expected changes in liquidity position;

 Review actual net interest income and asset/liability distribution versus budget.

 Measure performance against established standards and, if appropriate, against peer group data.

 Review the current and prospective income tax position.

 Review the level and makeup of non-earning assets. Given the importance of ALCO in the management of the Bank's balance sheet and related earnings stream, ALCO will review the annual budget.

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Approved by Board of Directors 1/20/22