7 unchanged sentences
Over the past five calendar years, our NIM has ranged from a low of 3.16% (realized in 2021) to a high of 4.09% (realized in 2018).
−Removed: The 93 basis point fluctuation in NIM between the high and low point during this period was a direct result of the FRB monetary policy enacted at the beginning of the COVID-19 pandemic resulting in a reduction in short-term market interest rates totaling 150 basis points in March 2020.
−Removed: During the first six months of 2022, the FRB implemented monetary policy to combat inflationary conditions and increased short-term rates 175 basis points, with the anticipation of additional rate increases to occur throughout 2022.
+Added: The 93 basis point fluctuation in NIM between the high and low point during this period was a direct result of the Federal Reserve monetary policy enacted at the beginning of the COVID-19 pandemic resulting in a reduction in short-term market interest rates totaling 150 basis points in March 2020.
+Added: During the first nine months of 2022, the Federal Reserve implemented monetary policy to combat inflationary conditions and increased short-term rates 300 basis points, with the anticipation of additional rate increases to occur throughout 2022.
There has be no significant change in the Company-estimated net interest income sensitivity from December 31, 2021.
−Removed: Using stated maturities for all fixed rate instruments except mortgage-backed securities (which are allocated in the periods of their expected payback) and securities and borrowings with call features that are expected to be called (which are shown in the period of their expected call), at June 30, 2022, we had approximate ly $3.2 billion more in interest-bearing liabilities that are subject to interest rate changes within one year than earning assets.
+Added: Using stated maturities for all fixed rate instruments except mortgage-backed securities (which are allocated in the periods of their expected payback) and securities and borrowings with call features that are expected to be called (which are shown in the period of their expected call), at September 30, 2022, we had approximate ly $3.5 billion more in interest-bearing liabilities that are subject to interest rate changes within one year than earning assets.
This generally would indicate that net interest income would experience downward pressure in a rising interest rate environment and would benefit from a declining interest rate environment.
1 unchanged sentence
Also, interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates.
−Removed: addition to the effects of “when” various rate-sensitive products reprice, market rate changes may not result in uniform changes in rates among all products.
−Removed: For example, included in interest-bearing liabilities subject to interest rate changes within one year as of June 30, 2022 were deposits tota ling $4.9 billion c omprised of checking, savings, and certain types of money market deposits with interest rates set by management.
+Added: In addition to the effects of “when” various rate-sensitive products reprice, market rate changes may not result in uniform changes in rates among all products.
+Added: For example, included in interest-bearing liabilities subject to interest rate changes within one year as of September 30, 2022 were deposits tota ling $4.7 billion c omprised of checking, savings, and certain types of money market deposits with interest rates set by management.
These types of deposits historically have not repriced with, or in the same proportion, as general market indicators.
Generally, when rates change, our interest-sensitive assets that are subject to adjustment reprice immediately at the full amount of the change, while our interest-sensitive liabilities that are subject to adjustment reprice at a lag to the rate change and typically not to the full extent of the rate change.
−Removed: In the short-term (less than twelve months), this generally results in us being asset-sensitive, meaning that our net interest income benefits from an increase in interest rates and is negatively impacted by a decrease in interest rates, which is what we experienced following the March 2020 interest rate cuts.
−Removed: However, in the twelve-month and longer horizon, the impact of having a higher level of interest-sensitive liabilities generally lessens the short-term effects of changes in interest rates.
−Removed: Overall we believe that in the near-term (twelve months), net interest income will not likely experience significant pressure from fluctuations in interest rates, and specifically from the anticipated rise in interest rates.
+Added: In the short-term (less than twelve months), this generally results in us being asset-sensitive, meaning that our net interest income benefits from an increase in interest rates and is negatively impacted by a decrease in interest rates.
+Added: The increase in our NIM during the third quarter of 2022 demonstrated this concept.
+Added: In the twelve-month and longer horizon, the impact of having a higher level of interest-sensitive liabilities generally lessens the short-term effects of changes in interest rates.
+Added: Overall we believe that in the near-term (twelve months), net interest income will not likely experience significant pressure from fluctuations in interest rates, and we may continue to benefit from the anticipated rise in interest rates.
Because of the static nature and limitations as discussed above of the gap report, we also employ an earnings simulation model to analyze the sensitivity of net interest income to movements in interest rates.
4 unchanged sentences
A “flat yield curve” means that short-term interest rates are substantially the same as long-term interest rates.
−Removed: Actions taken by the FRB at the beginning of the pandemic resulted in a very low and flat interest rate curve environment.
+Added: Actions taken by the Federal Reserve at the beginning of the pandemic resulted in a very low and flat interest rate curve environment.
Recent actions to raise short-term interest rates have resulted in a some steepening of the yield curve on the short end (within 1 year).
−Removed: However, the longer end of the curve continues to be flat to slightly inverted (between 1 and 10 years).
−Removed: A flat interest rate curve is an unfavorable interest rate environment for many financial institutions, including the Bank, as short-term interest rates generally drive our deposit pricing and longer-term interest rates generally drive loan pricing.
−Removed: When these rates converge, the profit spread we realize between loan yields and deposit rates narrows, which pressures our net interest margin.
+Added: However, the longer end of the curve continues to be flat and has actually inverted recently (between 1 and 10 years) meaning that the yield on short-term instruments (1 year) are higher than longer-term instruments (10 years).
+Added: A flat or inverted interest rate curve is an unfavorable interest rate environment for many financial institutions, including the Bank, as short-term interest rates generally drive our deposit pricing and longer-term interest rates generally drive loan pricing.
+Added: When these rates converge or invert, the profit spread we realize between loan yields and deposit rates narrows, which pressures our net interest margin.
Assuming that short term rates continue to rise over the next 12 months, we may see some benefit to our net interest margin from raising rates if we are able to maintain stable funding costs.
5 unchanged sentences
During periods of high inflation as we have recently experienced, there are normally corresponding increases in the money supply, and banks will normally experience above average growth in assets, loans, and deposits.
−Removed: Also, general increases in the price of goods and services will result in increased operating expenses.
+Added: Also, general increases in the price of goods and services will generally result in increased operating expenses.
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.