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
−Removed: funds 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
+Added: management, 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.
−Removed: Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all
−Removed: interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity.
+Added: Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning
+Added: assets and interest-bearing liabilities, other than those which have a short term to maturity.
Interest rate risk is the potential of economic losses due to future interest rate changes.
−Removed: These economic losses can be
−Removed: reflected as a loss of future net interest income and/or a loss of current fair market values.
−Removed: The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same
−Removed: time maximizing income.
+Added: These economic losses can be reflected as a loss
+Added: of future net interest income and/or a loss of current fair market values.
+Added: The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing
We manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business.
−Removed: We do not enter into instruments such as leveraged derivatives,
−Removed: financial options or financial future contracts to mitigate interest rate risk from specific transactions.
+Added: We do not enter into instruments such as leveraged derivatives, financial
+Added: options or financial future contracts to mitigate interest rate risk from specific transactions.
Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk.
−Removed: We do not own any trading
−Removed: Our exposure to interest rate risk is managed by the Asset/Liability Committee, or the ALCO Committee, in accordance with policies approved by our board of directors.
+Added: We do not own any trading assets.
+Added: Our exposure to interest rate risk is managed by the Asset/Liability Committee, or the ALCO Committee, in accordance with policies approved by the Company’s board of directors.
Committee formulates strategies based on appropriate levels of interest rate risk.
7 unchanged sentences
liabilities and an interest rate shock simulation model.
−Removed: 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
−Removed: interest rates on other financial metrics.
+Added: 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
+Added: rates on other financial metrics.
Contractual maturities and re-pricing opportunities of loans are incorporated in the model.
−Removed: The average lives of non-maturity deposit accounts are based on decay assumptions and are incorporated
−Removed: into the model.
+Added: The average lives of non-maturity deposit accounts are based on decay assumptions and are incorporated into
We utilize third-party experts to periodically evaluate the performance of our non-maturity deposit accounts to develop the decay assumptions.
4 unchanged sentences
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
−Removed: value of equity from changes in market interest rates under various scenarios.
+Added: These models test the impact on net interest income and fair value
+Added: of equity from changes in market interest rates under various scenarios.
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
3 unchanged sentences
expense under various 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
−Removed: the subsequent one-year 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: 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
+Added: for the subsequent one-year period should not 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,
+Added: 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:
−Removed: September 30,
Change in Interest Rates (Basis Points)
8 unchanged sentences
The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations.
−Removed: We have found that, historically, interest rates on these
−Removed: deposits change more slowly than changes in the discount and fed funds rates.
+Added: We have found that, historically, interest rates on these deposits
+Added: change more slowly than changes in the discount and fed funds rates.
This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis.
−Removed: The assumptions incorporated into the model
−Removed: are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income.
+Added: The assumptions incorporated into the model are
+Added: inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income.
Actual results will differ from the
10 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.