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liabilities as a percent of total Bank assets at:
+Added: June 30, 2025 (9.9) % (19.0) % (9.5) % 5.5 %
March 31, 2025 (11.4)
−Removed: December 31, 2024 (16.6)
September 30, 2024 (15.9)
Cumulative one-year gap - interest rates +200 bps at:
+Added: June 30, 2025 (11.9)
March 31, 2025 (13.7)
−Removed: December 31, 2024 (18.4)
September 30, 2024 (17.9)
Cumulative one-year gap - interest rates -200 bps at:
+Added: June 30, 2025 (5.5)
March 31, 2025 (7.1)
−Removed: December 31, 2024 (12.3)
September 30, 2024 (12.5)
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(2) MBS reflect projected prepayments at amortized cost.
−Removed: All other securities are presented based on contractual maturities, term to call dates or pre-refunding dates as of March 31, 2025, at amortized cost.
−Removed: (3) Although the Bank's checking, savings, and money market accounts are subject to immediate withdrawal, management considers a substantial amount of these accounts to be core deposits having significantly longer effective maturities.
+Added: All other securities are presented based on contractual maturities, term to call dates or pre-refunding dates as of June 30, 2025, at amortized cost.
+Added: (3) Although the Bank's non-maturity deposits are subject to immediate withdrawal, management considers a substantial amount of these accounts to be core deposits having significantly longer effective maturities.
The decay rates (the assumed rates at which the balances of existing accounts decline) used on these accounts are based on assumptions developed from our actual experiences with these accounts.
−Removed: If all of the Bank's checking, savings, and money market accounts had been assumed to be subject to repricing within one year, interest-bearing liabilities estimated to mature or reprice within one year would have exceeded interest-earning assets with comparable characteristics by $3.67 billion, for a cumulative one-year gap of (37.7)% of total assets.
+Added: If all of the Bank's non-maturity deposits had been assumed to be subject to repricing within one year, interest-bearing liabilities estimated to mature or reprice within one year would have exceeded interest-earning assets with comparable characteristics by $3.53 billion, for a cumulative one-year gap of (36.4)% of total assets.
(4) Borrowings exclude deferred prepayment penalty costs.
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The repricing of these liabilities is projected to occur at the maturity date of each interest rate swap.
−Removed: At March 31, 2025, the Bank's gap between the amount of interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(1.11) billion, or (11.4)% of total assets, compared to $(1.51) billion, or (15.8)% of total assets, at September 30, 2024.
−Removed: The change in the one-year gap amount was due primarily to an increase in the amount of projected asset cash flows coming due in one year, as of March 31, 2025, compared to September 30, 2024.
−Removed: The increase in projected asset cash flows was due primarily to an increase in the balances of adjustable-rate loans, and cash between the two periods.
−Removed: The increase in the balance of adjustable-rate loans was due primarily to the remix of the loan portfolio from one- to four-family loans to commercial loans, which tend to have adjustable rate features.
−Removed: The increase in projected asset cash flows was partially offset by a decrease in the amount of fixed-rate
−Removed: mortgage-related asset cash flows as a result of a general decrease in balances as well as to a decrease in projected prepayment speeds, from September 30, 2024, as a result of an increase in intermediate and long-term interest and mortgage rates.
+Added: At June 30, 2025, the Bank's gap between the amount of interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(963.3) million, or (9.9)% of total assets, compared to $(1.51) billion, or (15.8)% of total assets, at September 30, 2024.
+Added: The change in the one-year gap amount was due primarily to an increase in the amount of projected asset cash flows coming due in one year, as of June 30, 2025, compared to September 30, 2024, as well as to a decrease in the amount of projected liability cash flows.
+Added: The increase in projected asset cash flows was due primarily to an increase in the balances of adjustable-rate loans as the Bank continues to shift its loan portfolio from one- to four-family loans to commercial loans, which tend to have adjustable-rate features.
+Added: The increase in projected asset cash flows, which was primarily driven by an increased balance of commercial loans, was
+Added: partially offset by a decrease in the amount of fixed-rate mortgage-related asset cash flows as a result of a general decrease in balances as well as to a decrease in projected prepayment speeds, from September 30, 2024, as a result of an increase in intermediate and long-term interest and mortgage rates.
+Added: The decrease in projected liability cash flows was primarily related to the Bank prepaying and replacing $200.0 million of fixed-rate FHLB advances during the current quarter that went from a weighted average reaming term of 0.6 years to 2.5 years, as well as to a decrease in the amount of certificates of deposit maturing within one year.
The amount of interest-bearing liabilities expected to reprice in a given period typically is not significantly impacted by changes in interest rates because the Bank's borrowings and certificate of deposit portfolios have contractual maturities and generally cannot be terminated early without a prepayment penalty.
−Removed: If interest rates were to increase 200 basis points, as of March 31, 2025, the Bank's one-year gap would have been projected to be $(1.33) billion, or (13.6)% of total assets.
−Removed: If interest rates were to decrease 200 basis points, as of March 31, 2025, the Bank's one-year gap would have been projected to be $(686.7) million, or (7.1)% of total assets.
+Added: If interest rates were to increase 200 basis points, as of June 30, 2025, the Bank's one-year gap would have been projected to be $(1.15) billion, or (11.9)% of total assets.
+Added: If interest rates were to decrease 200 basis points, as of June 30, 2025, the Bank's one-year gap would have been projected to be $(528.8) million, or (5.5)% of total assets.
The changes in the gap amounts compared to when there is no change in rates was due to changes in the anticipated net cash flows primarily as a result of projected prepayments on mortgage-related assets in each rate environment.
10 unchanged sentences
Change Net Interest Income At
−Removed: (in Basis Points) March 31, 2025 September 30, 2024
+Added: (in Basis Points) June 30, 2025 September 30, 2024
in Interest Rates (1)
10 unchanged sentences
In general, increases/(decreases) in the Bank's net interest income projections under the various interest rate scenarios presented are due to the degree in which cash flows are realized and the rates projected to be earned on funds received through loan and securities repayments, in each scenario, are greater/(less) than the rates projected to be paid on deposits and borrowings over the next 12 months.
−Removed: The net interest income projection was higher in the base case scenario at March 31, 2025 compared to September 30, 2024, due primarily to the steepening of the yield curve between the two periods.
+Added: The net interest income projection was higher in the base case scenario at June 30, 2025 compared to September 30, 2024, due primarily to an increase in the average balance and average rate of the Bank's loan portfolio, as well as to the steepening of the yield curve between the two periods.
As a result, interest income projections associated with the Bank's interest-earning asset cash flows, primarily the loan portfolio, increased by more than the increase in interest expense projections on the Bank's interest-bearing liability cash flows.
−Removed: Additionally, the Bank held a higher balance of cash and securities at March 31, 2025, compared to September 30, 2024, which contributed to the increase in projected net interest income, partially offset by an increase in deposits between the two periods.
+Added: As of June 30, 2025, projected net interest income increased in each of the increasing rate scenarios presented and decreased in each of the decreasing rate scenarios presented, which is the opposite of the projections presented as of September 30, 2024.
+Added: This change was due primarily to growth in the Bank's commercial loan portfolio between the two periods, as well as to a decrease in the amount of projected interest-bearing liabilities coming due between the two periods, primarily in the certificate of deposit and wholesale borrowings portfolios.
+Added: Commercial loans often have adjustable-rate features, which makes the projected
+Added: amount of interest income on these assets more sensitive to changes in interest rates.
+Added: The average life of the Bank's certificate of deposit and wholesale borrowings portfolios increased marginally between the two periods, which resulted in a decrease in the amount of cash flows projected to reprice over the next 12 months, as of June 30, 2025, as compared to September 30, 2024, effectively making the projected amount of interest expense on these contractual liabilities less sensitive to increases/decreases in interest rates.
Change in MVPE.
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Change Market Value of Portfolio Equity At
−Removed: (in Basis Points) March 31, 2025 September 30, 2024
+Added: (in Basis Points) June 30, 2025 September 30, 2024
in Interest Rates (1)
9 unchanged sentences
(1) Assumes an instantaneous, parallel, and permanent change in interest rates at all maturities.
−Removed: The Bank's MVPE decreased from $1.10 billion at September 30, 2024 to $1.08 billion at March 31, 2025.
−Removed: The decrease was due primarily to an increase in market interest rates between the two periods across the intermediate and long-term maturities of the curve as the yield curve steepened between the two periods.
−Removed: The increases in market interest rates resulted in a decrease in the estimated values of the Bank's interest-earning assets by more than it decreased the estimated values of its interest-bearing liabilities.
−Removed: As interest rates increase, borrowers have less economic incentive to prepay or to refinance their mortgages, and agency debt issuers have less economic incentive or opportunity to exercise their call options in order to issue new debt at lower interest rates, resulting in lower projected cash flows on these assets.
−Removed: As interest rates increase in the rising interest rate scenarios, prepayments on mortgage-related assets are more likely to decrease and only be realized through significant changes in borrowers' lives such as divorce, death, job-related relocations, or other major events as there is less economic incentive for borrowers to prepay their debt, resulting in an increase in the average lives of mortgage-related assets.
−Removed: Similarly, call projections for callable agency debentures decrease as interest rates rise, which results in cash flows related to these assets moving closer to their contractual maturity dates.
−Removed: The longer expected average lives of these assets increases the sensitivity of their market value to changes in interest rates.
−Removed: Conversely, as interest rates decrease, borrowers who obtained or issued credit in a higher rate environment have more economic incentive to prepay or to refinance their mortgages, and agency debt issuers have more economic incentive and opportunity to exercise their call options in order to re-issue debt at lower interest rates, resulting in higher projected cash flows on these assets.
−Removed: The then shorter expected average lives of these assets decrease the sensitivity of their market value to changes in interest rates.
+Added: The Bank's MVPE remained largely unchanged, increasing from $1.10 billion at September 30, 2024 to $1.11 billion at June 30, 2025.
+Added: Compositional changes on the balance sheet, including within the Bank's loan portfolio as it continues to shift from one- to four-family to commercial loans, helped to offset the impact resulting from an increase in market interest rates between the two periods.
+Added: Our one- to four-family loans are predominately fixed-rate loans with long maturities and, therefore, are more economically sensitive to changes in market interest rates whereas commercial loans often have shorter average lives and adjustable-rate features resulting in less sensitivity to changes in market interest rates.
+Added: In elevated interest rate environments, such as the current environment, the estimated market value of the Bank's one- to four-family loan portfolio is reduced as the average rate of the portfolio is less than current market rates.
+Added: Our commercial loans have, predominately, been originated more recently at current market rates, giving them higher estimated values relative to the Bank's one- to four-family loans.
+Added: To the extent that the balance of one- to four-family loans, with average rates less than current market rates, continue to decrease and the balance of commercial loans, with average rates closer to current market rates, continue to increase, the estimated market value of the Bank's loan portfolio would be expected to continue to increase.
+Added: The impact of the increase in market interest rates between periods did not negatively impact the estimated MVPE in the base case because of the shift in the loan portfolio, described above, having a greater positive impact than the change realized on the Bank's liabilities.
+Added: As interest rates increase, borrowers generally have less economic incentive to prepay or to refinance their mortgages, and agency debt issuers have less economic incentive or opportunity to exercise their call options in order to issue new debt at lower interest rates, resulting in lower projected cash flows on these assets.
+Added: As interest rates increase in the rising interest rate scenarios, prepayments on mortgage-related assets are more likely to decrease and only be realized through significant changes in borrowers' lives such as divorce, death, job-related relocations, or other major events as there is less economic incentive for borrowers to prepay their debt, resulting in an increase in the average lives of those mortgage-related assets.
+Added: Similarly, call projections for callable agency debentures decrease as interest rates rise, which results in cash flows related to those assets moving closer to their contractual maturity dates.
+Added: The longer expected average lives of those assets increase the sensitivity of their market value to changes in interest rates.
+Added: Conversely, as interest rates decrease, borrowers who obtained credit in a higher interest rate environment have more economic incentive to prepay or to refinance their mortgages, and agency debt issuers have more economic incentive and opportunity to exercise their call options in order to re-issue debt at lower interest rates, resulting in higher projected cash flows on these assets.
+Added: The then shorter expected average lives of those assets decrease the sensitivity of their market value to changes in interest rates.
In the increasing interest rate scenarios, the sensitivity reflects the negative impacts of rates on the market value of the Bank's loan and securities portfolios more so than on its deposit and borrowing portfolios.
−Removed: In the decreasing interest rate scenarios, the Bank's MVPE increases due to a larger increase in the market value of the Bank's assets than its liabilities.
+Added: In the decreasing interest rate scenarios, the Bank's MVPE increases due to a larger increase in the estimated market value of the Bank's assets than its liabilities.
This is because the Bank's mortgage-related assets continue to have longer duration in these rate scenarios, which equates to greater market value sensitivity as interest rates change.
−Removed: The following table presents the weighted average yields/rates and WALs (in years), after applying prepayment, call assumptions, and decay rates for our interest-earning assets and interest-bearing liabilities as of March 31, 2025.
+Added: The following table presents the weighted average yields/rates and WALs (in years), after applying prepayment, call assumptions, and decay rates for our interest-earning assets and interest-bearing liabilities as of June 30, 2025.
Yields presented for interest-earning assets include the amortization of fees, costs, premiums and discounts, which are considered adjustments to the yield.
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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.