CMS Case Study

Summary of Potential Strategies - 9/30/2020

STRATEGY

EXPECTED RESULTS

RISKS

1. Deposit/Funding Strategies :

 Discuss @ ALCO.

 Discuss @ ALCO.

 Importance of fully vetting deposit elasticity/inelasticity and related further reductions in deposit rates across the board (where practical).  Discuss expectations for deposits and liquidity forecasting given variable: - PPP loan forgiveness and deposit disbursements. - D eposit “surge” expectations (how long last?) See Depoists360°® COVID Surge analysis. Outlook for deposit activity for remainder of year? vs. net loan growth? - Impact of stimulus/shift in consumer sentiment. - Are we at floor for NMDs? - Update on Citizens Prime pricing. - Review deposit fees/service charges considering current market (interchange and overdraft fee income temporarily or permanently impacted?) and vs. competition. - Long term CD rates are rich.  Review quarterly deposit trends. -

 Reduced asset sensitivity.

 Wholesale Funding -

Discuss potential funding needs and IRR management. - Revisit Derivatives as funds/risk management tool. - FHLB, Brokered, other.

Cloyd Bank & Trust - Page 37