CMS Case Study

Per Issue

Sector

$ 000

Maturity

% of Capital No limit

% of Portfolio % of Assets

1. Treasuries

No limit No limit

10 years

No limit

No limit

2. Agencies (incl. FHLB O/N & Term Dep.) (incl. Stocks) 3. Corporate Bonds, Notes, Debentures, Medium Term Notes (incl. foreign)

10 years

No limit

No limit

No limit

1,500

10 years

10%

50%

5%

4. Trust Preferred Stock 5. Bank Deposits, CD’s

With prior Approval of Board of Directors

5 years 20 years

10%

50% 50%

5%

6. State and Local Municipal Notes

1,500

150%

10%

7. Asset Backed (incl. CMO’s) and Passthroughs

Average Life at Purchase 12 years

-

Agency

No limit No limit

No limit

No Limit

No limit

-

Corporate

12 years

10%

50%

5%

-

Floating Rate

1,500

25 years / 30 legal final

8. Money Market Investments - O/N Fed Funds

O/N

25% 10% 10% 10% 10% 10% 10% 10%

50% 50% 50% 50% 50% 50% 50% 50% 50% 25%

5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

- - - - - - -

Term Fed Funds

1,500

13 months

CD’s

*249 13 months

Banker’ Acceptances Commercial Paper

1,500 1,500 1,500 1,500 1,500

13 months 13 months 13 months 13 months 13 months

Reverse Repurchase Agreements Short term Tax Exempt Notes Money Market Preferred Stock

9. Common Stock 10. Preferred Stock

5% 5% 5% 5%

n/a n/a n/a

11. Options

n/a

12. Mutual Funds

25%

13. Bank Owned Life Insurance

10% of Tier 1 Capital + ALLL per Issuer

25% of Tier 1 Capital + ALLL

* These limits apply to investments purchased after the approval of this policy.

10. Market Sensitivity It is of critical importance in the management of the Bank’s overall interest rate risk position that the market sensitivity characteristics of its securities portfolio are understood and reflected in its interest rate risk management process. For purposes of this discussion, market sensitivity means the potential variability of price, yield (income), and cashflow characteristics of its securities depending upon changes in market interest

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Board Approval 8/19/21