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Interest rates
−Removed: While operating net interest income has become a meaningful component to our consolidated operating results, we do not consider our cash and cash equivalents to be subject to material interest rate risk due to their short duration.
−Removed: The Federal Open Market Committee ("FOMC") recently increased the federal funds target rate in early May 2022 to a range of 0.75%-1.00%, which will impact the amount of net interest income we earn.
−Removed: While it is expected that the FOMC will continue to increase interest rates throughout 2022 to slow the effects of economic inflation tied to the COVID-19 pandemic, it is uncertain when or how many times interest rates will be increased.
+Added: While operating net interest income has become a meaningful component to our consolidated operating results, we do not consider our investment portfolio to be subject to material interest rate risk since it is comprised predominantly of fixed rate securities.
+Added: This portfolio is price sensitive to rate changes, which can impact the associated unrealized gain or loss.
+Added: However, we have the ability and intent to hold these instruments until the securities recover their amortized cost bases, which may be at maturity.
+Added: Our cash and cash equivalents are subject to changes in short-term rates.
+Added: The Federal Open Market Committee ("FOMC") again increased the federal funds target rate in June 2022 to a range of 2.25%-2.50%, which will continue to impact the amount of net interest income we earn.
+Added: While it is expected that the FOMC will continue to increase interest rates throughout 2022 to slow the effects of economic inflation, it is uncertain when or how many times interest rates will be increased.
The FOMC's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future.
−Removed: As of March 31, 2022, we had no balances outstanding under our $100.0 million line of credit agreement.
+Added: As of June 30, 2022, we had no balances outstanding under our $100.0 million line of credit agreement.
Refer to Note 9 — Debt to the Consolidated Financial Statements included herein for additional information.
1 unchanged sentence
Although any short-term borrowings under our revolving credit facility would likely be insensitive to interest rate changes, interest expense on short-term borrowings will increase and decrease with changes in the underlying short-term interest rates.
−Removed: For example, assuming our credit agreement is drawn up to its maximum borrowing capacity of $100.0 million, based on the applicable LIBOR and margin in effect as of March 31, 2022, each quarter point of change in interest rates would result in a $0.3 million change in our annual interest expense.
+Added: For example, assuming our credit agreement is drawn up to its maximum borrowing capacity of $100.0 million, based on the applicable LIBOR and margin in effect as of June 30, 2022, each quarter point of change in interest rates would result in a $0.3 million change in our annual interest expense.
We actively monitor our interest rate exposure and our objective is to reduce, where we deem appropriate to do so, fluctuations in earnings and cash flows associated with changes in interest rates.
12 unchanged sentences
Our policy has limits related to liquidity ratios, the concentration that we may have with a single institution or issuer and effective maturity dates as well as restrictions on the type of assets that we may invest in.
−Removed: The management Asset Liability Committee is responsible for monitoring compliance with our Capital Asset Liability Management policy and related limits on an ongoing basis, and reports regularly to the risk committee of our Board of Directors.
+Added: The management Asset Liability Committee is responsible for monitoring compliance with our Capital
+Added: Asset Liability Management policy and related limits on an ongoing basis, and reports regularly to the risk committee of our Board of Directors.
Our exposure to credit risk associated with settlement assets is mitigated due to the short time period, currently an average of two days that settlement assets are outstanding.
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.