CMS Case Study

Summary of Potential Strategies - 9/30/2020

STRATEGY

EXPECTED RESULTS

RISKS

3. Investments/Hedging:

 Discuss @ ALCO.

 Discuss @ ALCO.

 Cash and Security Cashflow. -

Review plan for cash balances and targeted liquidity levels. - Discuss investment portfolio and expectations for cashflow reinvestment ($4MM/month). - BEWARE PREMIUMS ; discuss pool size, structure, geography, underwriter of loans, prepayment history to date; are we tracking performance? - Be prepared for unrealized loss. - “No Free Lunch” .

4. See Attached Stress Testing (deposit sensitivity) – Analyzing potential impact deposit outflows and pricing assumptions.

 Discuss @ ALCO.

 Discuss @ ALCO.

Cloyd Bank & Trust - Page 39