10 unchanged sentences
The Company’s Investment / Interest Rate Risk Committee, a committee of the Board of Directors, reviews and approves the policies established by ALCO.
−Removed: CARTER BANKSHARES, INC.
Earnings Simulation Modeling
13 unchanged sentences
We have temporarily suspended the + 300 and + 400 basis point rate shock analyses.
−Removed: Due to the FOMC’s recent action to reduce the Fed Funds Target Rate range by 50 bps from 5.25% - 5.50% to 4.75% - 5.00% effective September 18, 2024 coupled with current rate forecasts that imply that the FOMC will continue reducing the Fed Funds Target Rate during the fourth quarter of 2024 and well into 2025, we believe the impact to net interest income when evaluating the + 300 and +400 basis point rate shock scenarios do not provide meaningful insight into our interest rate risk position nor does it project a probable interest rate environment for the foreseeable future.
−Removed: The following tables reflect the earnings simulation results for the periods presented utilizing a forecasted static balance sheet over the next twelve months.
+Added: Due to the FOMC’s recent action taken at their last three scheduled meetings of 2024 to reduce the Fed Funds Target Rate range by an aggregate of 100 bps from 5.25% - 5.50% to 4.25% - 4.50% coupled with current rate forecasts that imply that the FOMC is unlikely to increase the Fed Funds Target Rate during 2025, we believe the impact to net interest income when evaluating the + 300 and +400 basis point rate shock scenarios do not provide meaningful insight into our interest rate risk position nor does it project a probable interest rate environment for the foreseeable future.
+Added: CARTER BANKSHARES, INC.
+Added: AND SUBSIDIARIES
+Added: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - (continued)
+Added: The following tables reflect the earnings simulation results at the dates presented utilizing a forecasted static balance sheet over the next twelve months.
All percentage changes presented are within prescribed ranges set by ALCO.
−Removed: September 30, 2024 December 31, 2023
+Added: March 31, 2025 December 31, 2024
Change in Interest Rate (basis points) % Change in Pretax Net Interest Income % Change in Pretax Net Interest Income
5 unchanged sentences
-400 8.3% 6.6%
−Removed: The results from the earnings simulation imply that the Company’s assets and liabilities are relatively evenly matched to allow for net interest income margin expansion in rising and falling interest rate environments at September 30, 2024 versus being liability sensitive at December 31, 2023.
−Removed: The above table indicates that as of September 30, 2024 the Company’s balance sheet is positioned to produce a modest increase in pre-tax net interest income in both a rising and falling interest rate environment principally due to the current balance sheet composition, related maturity structures, interest rate hedges entered into during the third quarter and dynamic repricing correlations to market interest rates for both assets and liabilities.
+Added: The results from the earnings simulation imply that the Company’s balance sheet is slightly liability sensitive at March 31, 2025 and December 31, 2024.
+Added: The above table indicates that, in a rising interest rate environment, the Company is positioned to have a small increase in net interest income for the same asset and liability mix due to the balance sheet composition, related maturity structures, and repricing correlations to market interest rates for assets and liabilities.
+Added: However, in a declining interest rate environment, the Company is positioned to have a more advantageous increase in net interest income driven by the same factors discussed above and below.
+Added: The liability sensitive position at March 31, 2025 is due to a variety of factors which include 1) higher than market rate unfunded loan commitments that were originated during 2024 with fixed rates that are assumed to draw down, or convert to funded loan balances, during the next twelve months, 2) shortening maturities of the time deposit portfolio due to shorter term time deposit promotional campaigns in response to the recent inverted yield curve, and 3) more aggressive non maturing deposit betas utilized in a rates down environment versus a rates up environment based on bank specific non maturing deposit rate beta assumptions observed during the most recent rate cycle.
Economic Value of Equity Modeling
6 unchanged sentences
For economic value of equity simulation, our policy guidelines limit the change in economic value of equity given changes in rates of +/- 100, 200, 300, 400 basis points and for non-parallel yield curve shift scenarios.
−Removed: We have temporarily suspended the + 300 and + 400 basis
−Removed: CARTER BANKSHARES, INC.
−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (continued)
−Removed: point rate shock analyses.
−Removed: Due to the FOMC’s recent action to reduce the Fed Funds Target Rate range by 50 bps from 5.25% - 5.50% to 4.75% - 5.00% effective September 18, 2024 coupled with current rate forecasts that imply that the FOMC will continue reducing the Fed Funds Target Rate during the fourth quarter of 2024 and well into 2025, we believe the impact to net interest income when evaluating the + 300 and +400 basis point rate shock scenarios do not provide meaningful insight into our interest rate risk position nor does it project a probable interest rate environment for the foreseeable future.
+Added: We have temporarily suspended the + 300 and + 400 basis point rate shock analyses.
+Added: Due to the FOMC’s recent action taken at their last three scheduled meetings of 2024 to reduce the Fed Funds Target Rate range by 100 bps from 5.25% - 5.50% to 4.25% - 4.50% coupled with current rate forecasts that imply that the FOMC is unlikely to increase the Fed Funds Target Rate during 2025, we believe the impact to net interest income when evaluating the + 300 and +400 basis point rate shock scenarios do not provide meaningful insight into our interest rate risk position nor does it project a probable interest rate environment for the foreseeable future.
Results for the economic value of equity modeling are driven primarily by the shape of the underlying yield curves and option-adjusted spreads used to discount the projected cash flows of assets and liabilities, and the assumed life span of the assets and liabilities being discounted.
−Removed: The following tables reflect the economic value of equity analyses results for the periods presented.
+Added: The following tables reflect the economic value of equity analyses results at the dates presented.
All percentage changes presented are within prescribed ranges set by management.
−Removed: September 30, 2024 December 31, 2023
+Added: March 31, 2025 December 31, 2024
Change in Interest Rate (basis points) % Change in Economic Value of Equity % Change in Economic Value of Equity
5 unchanged sentences
-400 (6.6) % (1.9) %
+Added: CARTER BANKSHARES, INC.
+Added: AND SUBSIDIARIES
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.