10 unchanged sentences
The investment policy generally calls for funds to be invested among various categories of security types and maturities based upon the Company’s need for liquidity, desire to achieve a proper balance between minimizing risk while maximizing yield, the need to provide collateral for borrowings, and the need to fulfill the Company’s asset/liability management goals.
−Removed: The Company’s cost of funds responds to changes in interest rates due to the relatively short-term nature of its wholesale deposit portfolio, and due to the relatively short-term nature of its borrowed funds.
The Company believes that its growing portfolio of longer duration, low-cost deposits generated from its payments division provides a stable and profitable funding vehicle, but also subjects the Company to greater risk in a falling interest rate environment than it would otherwise have without this portfolio.
14 unchanged sentences
The results are affected by projected rates, prepayments, caps and floors.
−Removed: Management exercises its best judgment in making assumptions regarding events that management can influence, such as non-contractual deposit re-pricing, as well as events outside of management's control, such as customer behavior on loan and deposit activity and the effect that competition has on both lending and deposit pricing.
+Added: Management exercises its best judgment in making assumptions regarding events
+Added: that management can influence, such as non-contractual deposit re-pricing, as well as events outside of management's control, such as customer behavior on loan and deposit activity and the effect that competition has on both lending and deposit pricing.
These assumptions are subjective and, as a result, net interest income simulation results will differ from actual results due to the timing, magnitude, and frequency of interest rate changes, changes in market conditions, customer behavior and management strategies, among other factors.
−Removed: The Company performs various sensitivity analyses on assumptions of deposit attrition and deposit re-pricing, as well as market-implied forward rates and various likely and extreme interest rate scenarios, including rapid and gradual interest rate ramps, rate shocks and yield curve twists.
+Added: The Company performs various sensitivity analyses on assumptions of deposit attrition, loan prepayments, and asset re-pricing, as well as market-implied forward rates and various likely and extreme interest rate scenarios, including rapid and gradual interest rate ramps, rate shocks and yield curve twists.
The EAR analysis used in the following table reflects the required analysis used no less than quarterly by management.
It models basis point parallel shifts in market interest rates over the next one-year period.
−Removed: The following table shows the results of the scenarios as of June 30, 2021:
+Added: The following table shows the results of the scenarios as of December 31, 2021:
Net Sensitive Earnings at Risk
7 unchanged sentences
Percentage change from base -5.6 % — % 12.2 % 24.6 % 37.2 % 49.9 %
−Removed: The EAR analysis reported at June 30, 2021 , 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 December 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.
1 unchanged sentence
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.
−Removed: The Company believes that its 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.
Under EVE analysis, the economic value of financial assets, liabilities and off-balance sheet instruments is derived under each rate scenario.
2 unchanged sentences
It models immediate basis point parallel shifts in market interest rates.
−Removed: The following table shows the results of the scenarios as June 30, 2021:
+Added: The following table shows the results of the scenarios as December 31, 2021:
Economic Value Sensitivity
3 unchanged sentences
Percentage change from base -15.3 % 11.2 % 20.0 % 27.5 % 34.7 %
−Removed: The EVE at risk reported at June 30, 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.
+Added: The EVE at risk reported at December 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.