This excerpt taken from the ASBI 10-K filed Apr 2, 2007.
Position Assessment as of December 31, 2006
Total loans increased $30.9 million to $249.3 million at December 31, 2006. Loan demand centered on commercial construction, hybrid residential adjustable-rate mortgages, and home equity lines of credit draws. Balance sheet spreads remained under pressure for most of 2006 with funding costs increasing at a pace faster than asset yields. During the fourth quarter, we restructured the investment portfolio, selling $34 million of securities and using some of the proceeds to reduce FHLB advances. As a result, the net balance sheet spread increased 18 basis points (bp) during the fourth quarter. Changes in replacement assumptions, higher expected replacement rates on loans and in the rates and terms of FHLB advances, the net interest income simulations show higher levels of income in the first year of all scenarios reviewed. The balance sheet is structurally asset sensitive over the long-term with a slight asset bias in the first 2 years. All potential exposures remain within policy limits.