1. Made possible by our generous sponsors Fed Policies and Their Impact Community Bank Day Princeton, NJ Jim Reber ICBA Securities

2. 2  Before:  Chairman Ben BernankeDove  Governor Sarah Bloom RaskinDove  Esther George, Kansas CityHawk  James Bullard, St. LouisModerate  Charles Evans, ChicagoDove  Eric Rosengren, BostonDove

3. 3  After:  Vice-Chair Stanley Fischer*Wild Card  Governor Lael Brainard*Dove (?)  Narayana Kocherlakota, MinneapolisDove  Richard Fisher, DallasHawk  Sandra Pianalto, ClevelandModerate  Charles Plosser, PhiladelphiaHawk * Yet to be confirmed Net Change: Slightly more hawkish

4. 4  More work to be done  Looking for replacement for Gov. Raskin  Looking for replacement for Gov. Stein  Cleveland Pres. Pianalto has announced intention to retire

5. 5 March 19 FOMC Press Release “The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions.” “In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress -- both realized and expected --toward its objectives of maximum employment and 2 percent inflation.” “The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”

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7. 7 http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

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9. 9 “This extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policy makers.” “It is clear to me that the U.S. economy is still considerably short of the two goals assigned to the Federal Reserve by the Congress. The first of those goals is maximum sustainable employment... Most of my colleagues on the Federal Open Market Committee and I estimate that the unemployment rate consistent with maximum sustainable employment is now between 5.2 percent and 5.6 percent.” “Earlier this month, the Fed reiterated its overall commitment to maintain extraordinary support for the recovery for some time to come. This commitment is strong, and I believe the Fed's policies will continue to help sustain progress in the job market.”

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13. 13 12-31-1304-25-14

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17. 17  Dropped Treasury purchases to $25B/month  Dropped MBS purchases to $20B/month  Reaffirmed intent to keep rates accommodative for a “considerable time”

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21. Typical Portfolio 3-31-13 21

22. Typical Portfolio 3-31-14 22

23. Key Portfolio Metrics  Average Book Price 102.96 102.61  Tax-Equivalent Yield 2.61% 2.61%  Effective Duration 2.9 3.8  Effective Duration +200 4.6 4.7  Net Unrealized G/(L) 1.89% (0.82%) 23 3-31-13 3-31-14

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30. 30 Intended for institutional investors only. Although the information included in this report has been obtained from sources we believe to be reliable, we do not guarantee its accuracy. All opinions expressed in this report constitute the judgments as of the dates indicated and are subject to change without notice. This report is for informative purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any product. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. Member FINRA/SIPC. Jim Reber jreber@icbasecurities.com 800-422-6442