12 unchanged sentences
While the future effects of rising rates on deposit balances cannot be known, the Company maintains a practice of running multiple rate scenarios to better understand interest rate risk and its effect on the Company’s performance.
−Removed: Simulation A June 30, 2021 March 31, 2021
+Added: Simulation A September 30, 2021 June 30, 2021
(Dollars in millions)
4 unchanged sentences
100 basis points rising 37.7 5.17 — 38.4 5.16 —
−Removed: Simulation B June 30, 2021 March 31, 2021
+Added: Simulation B September 30, 2021 June 30, 2021
(Dollars in millions)
4 unchanged sentences
100 basis points rising 33.2 4.55 (237.5) 33.9 4.56 (241.5)
−Removed: Under Simulation A, in the three rising rate scenarios, interest rate risk is more asset sensitive than the previous quarter, which primarily resulted from increases in interest bearing deposits at the Federal Reserve and long-term securities purchased under agreements to resell, as well as from removing deposit attrition from the simulation.
+Added: Under Simulation A, in the three rising rate scenarios, interest rate risk is slightly more asset sensitive than the previous quarter, which primarily resulted from an increase in securities purchased under agreements to resell.
+Added: Deposit attrition was removed from the simulation in both the current and previous quarters.
The Company did not model a 100 basis point falling scenario due to the already low interest rate environment.
In Simulation B, the assumed levels of deposit attrition were modeled to capture the results of a shrinking balance sheet.
−Removed: Under this Simulation, in the three rising rate scenarios, interest rate risk is more asset sensitive than the previous quarter, which primarily resulted from increases in interest bearing deposits at the Federal Reserve and long-term securities purchased under agreements to resell, coupled with the implementation of new non-maturity deposit run-off assumptions.
−Removed: These assumptions result in faster deposit run-off as rates increase.
−Removed: Compared to the previous quarter, income in the 100 basis point rising scenario increased primarily due to less deposit run-off, while income in the 300 basis point rising scenario increased due to changes in balances of interest bearing deposits at the Federal Reserve and long-term securities purchased under agreements to resell.
+Added: Under this Simulation, in the three rising rate scenarios, interest rate risk is slightly more asset sensitive than the previous quarter, which primarily resulted from an increase in securities purchased under agreements to resell.
Projecting deposit activity in a period of historically low interest rates is difficult, and the Company cannot predict how deposits will actually react to shifting rates.
The comparisons above provide insight into potential effects of changes in rates and deposit levels on net interest income.
−Removed: The Company believes that its approach to interest rate risk has appropriately
−Removed: considered its susceptibility to both rising and falling rates and has adopted strategies which minimize the impact of interest rate risk.
+Added: The Company believes that its approach to interest rate risk has appropriately considered its susceptibility to both rising and falling rates and has adopted strategies which minimize the impact of interest rate risk.
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.