24 unchanged sentences
Earnings at Risk (“EAR analysis”) and Economic Value of Equity (“EVE analysis”).
−Removed: Under EAR analysis, net interest income is calculated for each interest rate scenario to the net interest income forecast in the base case.
+Added: Under EAR analysis, net interest income is calculated for each interest rate scenario and compared to the net interest income forecast in the base case.
EAR analysis measures the sensitivity of interest-sensitive earnings over a one-year minimum time horizon.
4 unchanged sentences
The EAR analysis used in the following table reflects the required analysis used no less than quarterly by management.
−Removed: It models -100, +100, +200, +300, and +400 basis point parallel shifts in market interest rates over the next one-year period.
−Removed: The Company was within Board approved policy limits for all interest rate scenarios using the snapshot as of December 31, 2020.
−Removed: The following table shows the results of the scenarios as of December 31, 2020:
+Added: It models basis point parallel shifts in market interest rates over the next one-year period.
+Added: The following table shows the results of the scenarios as of March 31, 2021:
Net Sensitive Earnings at Risk
7 unchanged sentences
Percentage change from base — -5.3 % — % 21.0 % 42.1 % 63.6 % 85.1 %
−Removed: Board policy limits — -8.0 % — % -8.0 % -10.0 % -15.0 % -20.0 %
−Removed: The EAR analysis reported at December 31, 2020 , shows that Total Interest Sensitive Income will change more rapidly than Total Interest Sensitive Expense over the next year.
+Added: The EAR analysis reported at March 31, 2021 , shows that Total Interest Sensitive Income will change more rapidly than Total Interest Sensitive Expense over the next year.
IRR is a snapshot in time.
The Company’s business and deposits are predictably cyclical on a weekly, monthly and yearly basis.
−Removed: The Company’s static IRR results could vary depending on which day of the week and timing in relation to certain payrolls, as well as time of the month in regard to early funding of certain programs, when this snapshot is taken.
−Removed: The Company’s overnight federal funds purchased fluctuates on a predictable daily and monthly basis due to fluctuations in a portion of its noninterest-bearing deposit base, primarily related to payroll processing and timing of when certain programs are prefunded and when the funds are received.
+Added: The Company’s static IRR results could vary depending on which day of the week the month ends, primarily related to payroll processing and timing of when certain programs are prefunded and when the funds are received.
The Company believes that its growing portfolio of noninterest-bearing deposits provides a stable and profitable funding vehicle and a significant competitive advantage in a rising interest rate environment, as the Company’s cost of funds would likely remain low, with less of an increase in the cost of funds expected relative to many other banks.
2 unchanged sentences
The EVE analysis used in the following table reflects the required analysis used no less than quarterly by management.
−Removed: It models immediate -100, +100, +200, +300 and +400 basis point parallel shifts in market interest rates.
−Removed: The Company was within Board policy limits for all scenarios.
−Removed: The following table shows the results of the scenarios as December 31, 2020:
+Added: It models immediate basis point parallel shifts in market interest rates.
+Added: The following table shows the results of the scenarios as March 31, 2021:
Economic Value Sensitivity
3 unchanged sentences
Percentage change from base -15.1 % 13.0 % 23.7 % 33.0 % 41.6 %
−Removed: Board policy limits -10.0 % -10.0 % -20.0 % -25.0 % -35.0 %
−Removed: The EVE at risk reported at December 31, 2020 shows that the economic value of equity position will be more sensitive to changes in interest rates due to the large amount of noninterest-bearing funding.
+Added: The EVE at risk reported at March 31, 2021 shows that the economic value of equity position is expected to benefit from rising interest rates due to the large amount of noninterest-bearing funding.
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.