6 unchanged sentences
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.
−Removed: This portfolio is price sensitive to rate changes, which can impact the associated unrealized gain or loss.
−Removed: However, we have the ability and intent to hold these instruments until the securities recover their amortized cost bases, which may be at maturity.
−Removed: Our cash and cash equivalents are subject to changes in short-term rates.
−Removed: The Federal Open Market Committee ("FOMC") again increased the federal funds target rate in September 2022 to a range of 3.75%-4.00%, which will continue to impact the amount of net interest income we earn.
−Removed: While it is expected that the FOMC may continue to increase interest rates until the effects of economic inflation are abated, it is uncertain when or how many times interest rates will be increased.
+Added: The composition of our portfolio is price sensitive to rate changes, which can impact unrealized gains or losses in our portfolio.
+Added: However, we have the ability, liquidity and intent to hold these instruments until such securities in our portfolio recover their amortized cost bases, which may be at maturity.
+Added: Our cash and cash equivalents are also subject to changes in short-term rates.
+Added: The Federal Open Market Committee ("FOMC") again increased the federal funds target rate in March 2023 to a range of 5.00%-5.25%, which will continue to impact the amount of net interest income we earn.
+Added: While it is expected that the FOMC may continue to maintain elevated interest rates until the effects of economic inflation are abated, 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: In addition, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of BaaS partner management fees, a component of cardholder and other fees).
−Removed: As a result, despite an environment of rising interest rates, the net effect on our consolidated financial statements will be lesser in magnitude.
−Removed: As of September 30, 2022, we had no balances outstanding under our $100.0 million line of credit agreement.
+Added: In addition, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue) and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested.
+Added: Accordingly, we expect the net effect to have a negative impact on our consolidated financial statements in 2023 compared to 2022.
+Added: As of March 31, 2023, 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 September 30, 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 SOFR and margin in effect as of March 31, 2023, 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.
10 unchanged sentences
We are exposed to credit and liquidity risks associated with the financial institutions that hold our cash and cash equivalents, restricted cash, available-for-sale investment securities, settlement assets due from retail distributors, third-party payment processors and other partners that collect funds and fees from our customers, and amounts due from our issuing banks for fees collected on our behalf.
−Removed: We manage the credit and liquidity risks associated with our cash and cash equivalents, available-for-sale investment securities, loans and amounts due from issuing banks by maintaining an investment policy that restricts our correspondent banking relationships to approved, well capitalized institutions and restricts investments to highly liquid, low credit risk assets.
−Removed: Our policy has limits related to liquidity ratios, the concentration that we may have with
−Removed: a single institution or issuer and effective maturity dates as well as restrictions on the type of assets that we may invest in.
+Added: We manage the credit and liquidity risks associated with our cash and cash equivalents, available-for-sale investment securities, loans and amounts due from issuing banks by maintaining an investment policy that restricts our correspondent banking relationships to approved, well capitalized institutions and restricts investments to highly
+Added: liquid, low credit risk assets.
+Added: 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.
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.
3 unchanged sentences
Our management's Enterprise Risk Management Committee is responsible for monitoring partner exposure and assigning credit limits and reports regularly to the risk committee of our Board of Directors.
−Removed: We continue to monitor our exposure to credit risk with our retail distributors and other business partners in light of the current economic environment.
+Added: We continue to monitor our exposure to credit risk with our retail distributors and other business partners in light of the current macro-economic uncertainties.
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.