2 unchanged sentences
As a financial institution, our primary component of market risk is interest rate volatility.
−Removed: Our financial management policy provides management with the guidelines for effective funds
−Removed: management, and we have established a measurement system for monitoring our net interest rate sensitivity position.
+Added: Our financial management policy provides management with the guidelines for effective funds management,
+Added: and we have established a measurement system for monitoring our net interest rate sensitivity position.
We have historically managed our sensitivity position within our established guidelines.
17 unchanged sentences
book and market values of assets and liabilities, commitments to originate loans and the maturities of investments and borrowings.
−Removed: Additionally, the ALCO Committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer
−Removed: and commercial deposit activity.
−Removed: Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities and an interest rate shock simulation
+Added: Additionally, the ALCO Committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and
+Added: commercial deposit activity.
+Added: Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities and an interest rate shock simulation model.
We use interest rate risk simulation models and shock analyses to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on
2 unchanged sentences
The average lives of non-maturity deposit accounts are based on decay assumptions and are incorporated into the model.
−Removed: utilize third-party experts to periodically evaluate the performance of our non-maturity deposit accounts to develop the decay assumptions.
−Removed: All of the assumptions used in our analyses are inherently uncertain and, as a result, the model cannot
−Removed: precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income.
−Removed: Actual results will differ from the model’s simulated results due to timing, magnitude and frequency
−Removed: of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.
+Added: third-party experts to periodically evaluate the performance of our non-maturity deposit accounts to develop the decay assumptions.
+Added: All of the assumptions used in our analyses are inherently uncertain and, as a result, the model cannot precisely
+Added: measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income.
+Added: Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest
+Added: rate changes as well as changes in market conditions and the application and timing of various management strategies.
On a quarterly basis, we run various simulation models including a static balance sheet and dynamic growth balance sheet.
−Removed: These models test the impact on net interest income and fair value of
−Removed: equity from changes in market interest rates under various scenarios.
−Removed: Under the static model and dynamic growth models, rates are shocked instantaneously and ramped rates change over a 12-month and 24-month horizon based upon parallel and
−Removed: non-parallel yield curve shifts.
+Added: These models test the impact on net interest income and fair value of equity
+Added: from changes in market interest rates under various scenarios.
+Added: Under the static model and dynamic growth models, rates are shocked instantaneously and ramped rates change over a 12-month and 24-month horizon based upon parallel and non-parallel
+Added: yield curve shifts.
Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario.
−Removed: Non-parallel simulation involves analysis of interest income and expense under various
−Removed: changes in the shape of the yield curve.
−Removed: Our internal policy regarding internal rate risk simulations currently specifies that for gradual parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year
−Removed: period should not decline by more than 10% for a -100 basis point shift, 5% for a 100 basis point shift, 10% for a 200 basis point shift, 15% for a 300 basis point shift, and 20% for a 400 basis point shift.
+Added: Non-parallel simulation involves analysis of interest income and expense under various changes in the
+Added: shape of the yield curve.
+Added: Our internal policy regarding internal rate risk simulations currently specifies that for gradual parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not
+Added: decline by more than 20% for a -200 basis point shift, 10% for a -100 basis point shift, 10% for a 100 basis point shift, 20% for a 200 basis point shift, 30% for a 300 basis point shift, and 30% for a 400 basis point shift.
The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:
32 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.