CASH 2018 Annual Report

88 (1) Tax rate used to arrive at the TEY for the year ended September 30, 2018 was 24.53%. (2) Tax rate used to arrive at the TEY for the years ended September 30, 2017 and September 30, 2016 was 35%. (3) Previously stated Specialty Finance Loans have been renamed as National Lending Loans. National Lending Loans are comprised of loan portfolios that are not generated by the Community Bank. (4) Previously stated Retail Bank loans have been renamed as Community Banking Loans. (5) Net interest margin expressed on a fully taxable equivalent basis ("net interest margin, tax equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. We believe that it is a standard practice in the banking industry to present net interest margin expressed on a fully taxable equivalent basis, and accordingly believe the presentation of this non-GAAP financial measure may be useful for peer comparison purposes. Rate / Volume Analysis The following table presents, for the periods presented, the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. The table distinguishes between the change related to higher outstanding balances and the change due to the levels and volatility of interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e., changes in volume multiplied by old rate) and (ii) changes in rate ( i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate. Year Ended September 30, 2018 vs. 2017 2017 vs. 2016 (1) Increase / (Decrease) Due to Volume Increase / (Decrease) Due to Rate Total Increase / (Decrease) Increase / (Decrease) Due to Volume Increase / (Decrease) Due to Rate Total Increase / (Decrease) Interest-earning assets Cash & fed funds sold $ (773) $ 1,640 $ 867 $ 1,115 $ (470) $ 645 Mortgage-backed securities (3,042) 1,950 (1,092) 385 415 800 Tax exempt investment securities 4,778 (2,306) 2,472 5,576 1,389 6,965 Asset-Backed Securities 1,594 1,179 2,773 1,537 263 1,800 Other investment securities (1,105) 157 (948) 389 178 567 Total investments 1,300 1,906 3,206 7,887 2,245 10,132 Total commercial finance 17,243 9,283 26,526 3,915 (992) 2,923 Total consumer finance 8,973 288 9,261 6,704 — 6,704 Total tax services 29 779 808 — 11 11 National Lending loans and leases 27,361 9,235 36,596 10,619 (981) 9,638 Community Banking loans 8,358 1,404 9,762 6,418 (126) 6,292 Total loans and leases 32,590 13,768 46,358 17,037 (1,107) 15,930 Total interest-earning assets $ 33,117 $ 17,314 $ 50,431 $ 26,039 $ 668 $ 26,707 Interest-bearing liabilities Interest-bearing checking $ 136 $ (97) $ 39 $ 18 $ 57 $ 75 Savings 1 5 6 (2) 10 8 Money markets 4 32 36 1 10 11 Time deposits 265 708 973 145 267 412 Wholesale deposits 1,966 6,092 8,058 4,931 — 4,931 Total interest-bearing deposits 2,400 6,712 9,112 5,093 344 5,437 Overnight fed funds purchased 825 2,820 3,645 (451) 1,493 1,042 FHLB advances 258 (356) (98) (109) 445 336 Subordinated debentures 8 31 39 3,873 36 3,909 Other borrowings 476 (63) 413 58 — 58 Total borrowings 2,307 1,693 4,000 3,371 1,974 5,345 Total interest-bearing liabilities $ 4,707 $ 8,405 $ 13,112 $ 8,464 $ 2,318 $ 10,782 Net effect on net interest income $ 28,410 $ 8,909 $ 37,319 $ 17,575 $ (1,650) $ 15,925 (1) Due to the change in categorization of the Average Balances, Interest Rates and Yields table, the rate/volume calculation results have been conformed to be consistent with the updated categorization for all periods presented.