10 unchanged sentences
The Asset and Liability Committee regularly utilizes a model that projects net interest income based on increasing or decreasing interest rates, in order to be better able to respond to changes in interest rates.
−Removed: At March 31, 2020 , $587.6 million, or 86.7%, of our available for sale and held to maturity securities had fixed interest rates.
−Removed: At March 31, 2020 , $3.0 billion, or 79.7%, of our loan portfolio had adjustable or floating interest rates.
+Added: At June 30, 2020, $557.9 million, or 86.0%, of our available for sale and held to maturity securities had fixed interest rates.
+Added: At June 30, 2020, $2.9 billion, or 62.3%, of our loan portfolio had adjustable or floating interest rates.
Changes in interest rates affect the value of our interest-earning assets and, in particular, our securities portfolio.
13 unchanged sentences
The current low interest rate environment presents the possibility for a flattening of the yield curve, which presents a challenge to a bank, like us, that derives most of its revenue from net interest margin.
−Removed: During the three months ended March 31, 2020 , the yield on U.S.
+Added: During the six months ended June 30, 2020, the yield on U.S.
Treasury 5-year notes decreased 140 basis points from 1.69% to 0.29%, while the yield on 3-month Treasury bills decreased 139 basis points from 1.55% to 0.16%.
−Removed: While the 3-month/5-year Treasury spread increased from 14 basis points at December 31, 2019 to 26 basis points at March 31, 2020, the yield curve continues to be considerably flat compared to the 3-month/5-year Treasury spread of 81 basis points at December 31, 2017.
+Added: The 3-month/5-year Treasury spread decreased from 14 basis points at December 31, 2019 to 13 basis points at June 30, 2020, and continues to be considerably flat compared to the 3-month/5-year Treasury spread of 81 basis points at December 31, 2017.
A continued flat or inverted yield curve in 2020 may adversely affect net interest income as borrowers tend to refinance higher-rate fixed rate loans at lower rates and we may not be able to reinvest those prepayments in assets earning interest rates as high as the rates on those prepaid assets.
−Removed: The following reflects our net interest income sensitivity analysis at March 31, 2020 and December 31, 2019:
−Removed: March 31, 2020
+Added: The following reflects our net interest income sensitivity analysis at June 30, 2020 and December 31, 2019:
+Added: June 30, 2020
Potential Change
11 unchanged sentences
(Dollars in thousands)
−Removed: As noted in the table above, a 200-basis point increase in interest rates is projected to increase net interest income by 2.48% in year 1 and increase net interest income by 7.87% in year 2.
−Removed: Our balance sheet sensitivity to such a move in interest rates at March 31, 2020 in creased as compared to December 31, 2019 (which was an increase of 0.70% in net interest income over a twelve-month period).
−Removed: This increase is the result of a higher portion of our loans repricing to market rates.
+Added: As noted in the table above, a 200-basis point increase in interest rates is projected to increase net interest income by 3.14% in year 1 and decrease net interest income by 1.98% in year 2.
+Added: Our balance sheet sensitivity to such a move in interest rates at June 30, 2020 increased as compared to December 31, 2019 (which was an increase of 0.70% in net interest income over a twelve-month period).
+Added: This increase is the result of a higher portion of our loans repricing to market rates in addition to the increase in our floating rate portfolio over the last year.
We also continue to show the ability to hold the costs of interest-bearing deposits to below market rates .
−Removed: Overall, our strategy is shifting to a focus on reducing our exposure to falling rates.
−Removed: Over the intervening year, the effective duration (a measure of price sensitivity to interest rates) of the bond portfolio decreased from 2.35 years at December 31, 2019 to 2.02 years at March 31, 2020.
+Added: Overall, our strategy has been to proactively take advantage of the falling rate cycle in aggressively lowering deposit costs, ultimately dampening the effect of variable and adjustable rate loan repricing and additional fixed rate loan refinancing.
+Added: Over the intervening year, the effective duration (a measure of price sensitivity to interest rates) of the bond portfolio decreased from 2.35 years at December 31, 2019 to 2.11 years at June 30, 2020.
The preceding sensitivity analysis does not represent a Company forecast and should not be relied on as being indicative of expected operating results.
4 unchanged sentences
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.