LIQUIDITY

VolCorp balances the responsibilities of providing competitive returns with the need to maintain sufficient liquidity to meet members’cash flow needs.VolCorp holds adequate cash and overnight investments to provide for reasonable cash flow demands while managing an investment portfolio predominantly comprised of floating rate instruments which are, in general, less sensitive to unfavorable valuations in an upward interest rate environment relative to comparable fixed rate investments.Management understands and anticipates daily and seasonal variances, but also plans for unexpected outflows and member needs.VolCorp’s liquidity position is monitored daily and adjusted as necessary.

As ofDecember31, 2022, the cash and cash equivalents balance of $549million represented35% of assets, highlighting a balance sheet structured to provide for routine member liquidity.However,VolCorp also has access to multiple lines of credit.VolCorp maintains credit arrangements with theFederalHomeLoanBank of Cincinnati and holds federal funds lines of credit with regional banks.At year-end 2022 these arrangements represented total contractual amounts of $732and $85million respectively, of which $638million was available net of an outstanding FHLBovernight advance.

VolCorp also acts as an agent in theFederalReserveBank’sExcessBalanceAccount(EBA)program for a subset of its membership.TheEBAallows excess member deposits to reside on balance sheet with theFederal ReserveBank, providingVolCorp the flexibility to manage its balance sheet with access to additional member funding if necessary.