Recap of Disaggregated Sources & Uses Statement IssuesWe expanded the Aggregated Sources and Uses statement to track additional information in 4 main areas.The four areas we covered are:1) Expansion of Net Securities Change on the Uses side into:a) Securities Maturing on the Sources side,b) Securities Purchased on the Uses side, andc) Market Value (MV) change of the securities portfolio on the bottom of theUses side,2) Expansion of Loans into the individual Loan account changes (Prime, High, Medium, Syndicated, Real Estate, Consumer and Credit Card).3) Expansion of Deposits and Savings into Commercial, Regular and combined Public+Due-to-Bank Deposit changes, MM Savings and Public Savings changes in the upper Sources side, and,4) CD changes (both maturing and purchased) on the lower Sources side.This handout is meant as a guide to the areas in the outputs that will provide data for the 4 Expansions. The outputs are the prior (here Y1Q4) and current (Y2Q1) outputs we have discussed in class.1) Expansion of Net Securities Changea) Securities Maturing comes from the prior output, Pg. 6, Bottom of the page.b) Securities Purchased comes from two places:i) first, the decision recap on Pg. 11 of the current output, upper section ofthe right hand column, sum up “Securities Purchases” (90-day, 1Yr, 5Yr Treasuries, 3Yr and 10Yr Munis). This is what was decided to be purchased.ii) second, check if the simulation bought more 90-day Treasuries (T-Bills)than was decided due to liquidity requirements. Pg. 1, current output balance sheet, is current quarter entry for Treasury bills greater than what was decided? If it is the same amount as on Pg. 11 for 90-day, then the sum from Pg. 11 was the correct Securities Purchased. If the Treasury billsentry is greater than decided, then the excess over the decided amount (Pg.1 T-Bill value minus Pg. 11 90-day value) must be added to the sum from Pg. 11 to get the correct total for Securities Purchased.c) MV change of Securities PortfolioThis is a T-accounting operation from the values just developed and the balance sheet totals for “Total Securities” on Pg. 1 of the current output for the current (2.1) and prior quarter (1.4). The T-account is:Beg’g (1.4) + Securities Purchased – Securities Maturing = Projected End’gProjected end’g will only equal the current “Total Securities” (2.1) if the MV change was zero (which will never happen as interest rates are always changing).--- If Projected End’g > Actual … there was a loss of MV due to interest rates increasing and this is a source or release of funds (or positive use as shown on Uses side),--- If Projected End’g < Actual … there was a gain of MV due to interest rates falling and this is a use or take-up of funds (or negative use as we expect on the Uses side).2) Expansion of Loan AccountsThis takes Footnote 6, on Pg. 2 of the current output (2.1). For each Loan category, take Ending Balance minus Beginning Balance. If positive (a use), put a negative sign on the result. If negative (a source), put a positive sign on the result.3) Expansion of Deposits and SavingsThis takes both the current and prior output to complete. We will be looking at footnotes 2 and 3 on Pg. 2 of both of these outputs to get the data we need.Subtract the prior output values from the current output values for each account: Commercial, Regular Checking, Public DDs, Due-to-banks, MM Svings and Public. This operation is current – prior for each account. As these are liabilities,increases (+ results) are sources and decreases (- results) are uses.Then for our formatting, as they are usually small net changes, add the Public DD and Due-to-banks source/use together.4) CD changes (both maturing and purchased)a) CDs maturing comes from the prior output (1.4), Pg. 2, Footnote 10. The firstrow is CDs (3-mo, 6-mo and 1-Yr) maturing in the next quarter (2.1).b) CDs purchased is a combination of 2 pieces:i) On Pg. 11 of the current output (2.1) in the upper middle of the right hand column is the amount of CDs that were decided to be purchased. The6-mo and 1-Yr occurred, but the 3-mo may be more if you were under-funded. Sum the 3-mo, 6-mo and 1-Yr together and you purchased AT LEAST this much CDs as funding. ii) On Pg. 2 of the current output, in footnote 10, sum the 6-mo and 1-Yr CDs across all maturity periods. Subtract this result from the CDs (private)in footnote 3 on the same page. If the difference is what you saw for 3-mo CDs on Pg. 11, then extra 3-mo CDs were not purchased to fund your bank, and what you determined for CDs purchased in the last step was accurate. If the difference is greater than what you saw on Pg. 11, use this difference (notice it is the rounded 3-mo CD number in Footnote 10, but exact) in your sum for Total CDs Purchased, instead of the number from Pg.