11 unchanged sentences
We use simulation models to measure interest rate risk and to evaluate strategies to improve profitability.
−Removed: A simplified statement of condition is prepared on a quarterly basis as a starting point, using instrument level data of our actual loans, investments, borrowings and deposits as inputs.
−Removed: If potential changes to net equity value and net interest income
−Removed: resulting from hypothetical interest rate changes are not within the limits established by the Board of Directors, management may adjust the asset and liability mix to bring the risk position within approved limits or take other actions.
−Removed: At June 30, 2022, interest rate risk was within policy guidelines established by ALCO and the Board.
+Added: A simplified statement of condition is prepared on a quarterly basis as a starting point, using instrument level data of our actual loans,
+Added: investments, borrowings and deposits as inputs.
+Added: If potential changes to net equity value and net interest income resulting from hypothetical interest rate changes are not within the limits established by the Board of Directors, management may adjust the asset and liability mix to bring the risk position within approved limits or take other actions.
+Added: At September 30, 2022, interest rate risk was within policy guidelines established by ALCO and the Board.
One set of interest rates modeled and evaluated against flat interest rates and a static balance sheet is a series of immediate parallel shifts in the yield curve.
6 unchanged sentences
down 100 (4.1) % (5.7) %
−Removed: Asset sensitivity increased over the quarter primarily due to a reduction in our deposit betas, floating rate loans repricing above their respective floors and fully-indexed rates on adjustable loans in position to move above floors at next repricing.
+Added: down 200 (8.5) % (11.6) %
+Added: Asset sensitivity decreased over the prior quarter due to loan growth, higher yielding bond purchases and an increase in the average interest-bearing deposit beta from 26% to 28%.
Interest rate sensitivity is a function of the repricing characteristics of our assets and liabilities.
−Removed: The Bank runs a combination of scenarios and sensitivities in its attempt to capture the range of interest rate risk including the simulations mentioned above.
+Added: The Bank runs a combination of scenarios and sensitivities to capture the range of interest rate risk including the simulations mentioned above.
As with any simulation model or other method of measuring interest rate risk, limitations are inherent in the process and dependent on assumptions.
2 unchanged sentences
Important deposit modeling assumptions include the speed of deposit run-off and the amount by which interest-bearing deposit rates increase or decrease when market interest rates change, otherwise known as the deposit beta.
−Removed: We lowered the average interest-bearing deposit beta to 26% from last quarter's 58% in rising rate scenarios, which is much closer to historical levels for Bank of Marin.
The actual rates and timing of prepayments on loans and investment securities could vary significantly from the assumptions applied in the various scenarios.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.