CMS Case Study

Summary of Potential Strategies - 12/31/2020

STRATEGY

EXPECTED RESULTS

RISKS

1. Loan growth through 2021: Discuss growth outlook for loans in 2021. Discuss impact on interest rate risk and liquidity and whether concerns are warranted .

 Discuss @ ALCO.

 Discuss @ ALCO.

 Update on credit quality trends both at the Bank and in the local market.

 Discuss current loan pipeline and how things may net out vs budget.

Demand related impediments.

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- Concentration concerns or any sector concerns? More resi growth ahead?

- Update local loan rates, structures and volumes.

- Update rates used for replacement of cash flows in the simulations vs. potential changes due to market moves or competition locally. - At what point do we walk away from some loan deals given tight spreads for 5-year deals? Is there volume available at the 7, 8- and 10-year point (and at 25-50bp higher yields)? Discuss slope 5-10 years.

 Continue to include floors, prepayment penalties and appropriate spreads in new loan deals.

Long term outlook…D iscuss deposit stability and what could happen if material deposit outflow were experienced in concert with stronger loan growth.

Cloyd Bank & Trust - Page 37