Item 3. Quantitative and Qualitative Disclosures About Market Risk
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
By March 2022, Ohio’s unemployment rate approximated 4.1%. The bank is based in Holmes County which is reporting the lowest unemployment rate in Ohio at 2.6% in March 2022. Of the counties within the bank’s footprint, Stark County reported the highest unemployment rate at 4.1% in March. Many jobs within the Bank’s market footprint are going unfilled. The rising rate of inflation, which stood at 8.5% in March 2022, has become persistent and market interest rates have risen substantially during the first quarter of the year. Credit quality in the Bank’s loan portfolio has continued to improve, however risks to the economy remain with higher prices for goods and labor.
Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. All balance sheet positions and interest rate projections are currently within the Company’s board-approved policy for both the twelve- month and twenty-four month periods.
The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -200 through +400 basis point changes, in 100 basis point increments, in market interest rates at March 31, 2022 and December 31, 2021. The net interest income reflected is for the first twelve-month period of the modeled twenty-four month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.
March 31, 2022
(Dollars in thousands)
Change in
Interest Rates
(basis points)
Net Interest
Income
Dollar
Change
Percentage
Change
Board Policy
Limits
+400
$
33,000
$
2,000
6.5
%
+/- 25
%
+300
32,504
1,504
4.9
+/-15
+200
32,010
1,010
3.3
+/-10
+100
31,514
514
1.7
+/-5
0
31,000
—
—
—
-100
30,357
(643
)
(2.1
)
+/-5
-200
29,726
(1,274
)
(4.1
)
+/-10
December 31, 2021
+400
$
28,632
$
1,499
5.5
%
+/- 25
%
+300
28,283
1,150
4.2
+/-15
+200
27,924
791
2.9
+/-10
+100
27,523
390
1.4
+/-5
0
27,133
—
—
—
-100
26,504
(629
)
(2.3
)
+/-5
-200
25,714
(1,419
)
(5.2
)
+/-10
29
CSB BANCORP, INC.
CONTROLS AND PROCEDURES
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.