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The Bank of Moulton

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  1. The Bank of Moulton

  2. Strategy • Community Cosumer Bank: • Local Deposits • Local Loans servicing consumer and small business lending • Service all customers while concentrating on loans to Retail clients with deposits from both commercial and retail clients, and increase Branching  Trust, Fin’l Services • Use Jumbo CDs to strategically to finance specific needs  Financial Slack • Rely on core deposits to finance bank, make loans and hold investment portfolio • Concentrate on being profitable, NOT BIG!

  3. Strategy Levers and Performance • Move out of Jumbo CDs, use for strategic needs • 1.4 Assets $4.90 billion • 1.4 CDs $950 million • 1.4 MM Svgs $1.7 billion • 2.4 Assets $3.96 billion Less CDs: • 2.4 CDs $87.1 million Sold RE Portfolio • 2.4 MM Svgs $1.92 billion & Synd Loans • 3.4 Assets $5.11 billion • 3.4 CDs $719.5 million Lns $3.5b  $2.2b • 3.4 MM Svgs $2.16 billion Secs. $1b  $2.5b

  4. Strategy Levers and Performance • Move out of Jumbo CDs • Shift focus to High, Medium and Consumer Loans • Effec Int Rates vs. Spd + COF indicates High, Med  70-30 Target • 25%  in Desired; 25%  in Undesired; • Reduce R/E Holdings to lower fund’g, but Svc! • Reduce Synd as not Local Business loans • 1.4 3.4 R/E -78%, Prime -22%, Synd -89% • 1.4  3.4 H -18%, M -6%, Cons. -2%, CC -13% • Watch PLL vs. Charge-Offs

  5. Strategy Levers and Performance • Move out of Jumbo CDs • Loans to Desired Customers (H, Med and Cons.) • Concentrate on being profitable • ROE slows into ROA as Lev dropping. • ROE in the 20-25% range • Lev dropping due to Earnings; Cap Adeq at 1.40 • ROA Inc’g • ROA in 1-2% range • Adjmt. To RE and Futures shows Hedging, but also timing errors

  6. C/A = 7% C/A = 5.5% Peak, Sold Fut. When Int. Rts. 

  7. Peak Trough

  8. Sold R/E Loss on Futures

  9. Plans for the Future • Concentrate on Spread & Burden • Stay away from expensive funds and reconsider Invmts. • Consumer Loans and Svcs. (40 Branches  50 by 5.4) • Watch Temporary Employee Expense! • Work on CC Procssg. • Focus on Provision for Loan Losses (Loan Policy) (Lately PLL/Lns < ChgOff/Lns!) • Continue to attract Consumer Loans, but don’t lose all Comm’l customers (Loans and Core Dep.) • Continue to consider rate diff. in fund’g and invmt. • Repurchase more Equity/Cap Nts. to manage Capital Adequacy and Leverage: Cap Adeq 1.15, C/A=6.7%.