17 unchanged sentences
During a period of falling interest rates, the opposite would be true.
−Removed: As of June 30, 2022, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a positive impact on the Company’s net interest income, while declining interest rates are expected to have a negative impact on net interest income.
+Added: As of September 30, 2022, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a positive impact on the Company’s net interest income, while declining interest rates are expected to have a negative impact on net interest income.
We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates.
The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon.
−Removed: In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in LIBOR interest rates (or their replacement rates) and “prime” interest rates.
−Removed: In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in LIBOR interest rates (or their replacement rates) and “prime” interest rates.
+Added: In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in LIBOR/SOFR interest rates (or their replacement rates) and “prime” interest rates.
+Added: In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in LIBOR/SOFR interest rates (or their replacement rates) and “prime” interest rates.
In the subsequent months we expect that the net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits are expected to decrease compared to the then-current rates paid on those products.
−Removed: During 2020, we did experience some compression of our net interest margin percentage due to the Federal Fund rate being cut by a total of 2.25% during the nine month period of July 2019 through March 2020.
+Added: During 2020, we did experience some compression of our net interest margin percentage due to the Federal Fund rate being cut by a total of 2.25% from July 2019 through March 2020.
Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020 and the net interest margin remained lower than our historical average in 2021.
LIBOR interest rates decreased in 2020 and remained very low in 2021 and into the first three months of 2022, putting pressure on loan yields, and strong pricing competition for loans and deposits remains in most of our markets.
−Removed: Since March 2022, market interest rates have increased fairly rapidly and are expected to continue to increase through the remainder of 2022.
+Added: Since March 2022, market interest rates have increased fairly rapidly and are expected to continue to increase through the remainder of 2022 and the beginning of 2023.
Market interest rate increases are expected to result in increases to loan yields, net interest income and net interest margin.
−Removed: Subsequent to June 30, 2022, cumulative time deposit maturities are as follows:
+Added: Subsequent to September 30, 2022, cumulative time deposit maturities are as follows:
within three months — $473 million;
within six months — $673 million;
−Removed: and within twelve months — $873 million.
−Removed: At June 30, 2022, the weighted average interest rates on these various cumulative maturities were 0.48%, 0.79% and 0.75%, respectively.
+Added: and within twelve months — $1.2 billion.
+Added: At September 30, 2022, the weighted average interest rates on these various cumulative maturities were 1.11%, 1.18% and 1.53%, respectively.
The current level and shape of the interest rate yield curve poses challenges for interest rate risk management.
5 unchanged sentences
In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3rd and a 1.00% decrease on March 16th.
−Removed: In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75% and 0.75% in March, May, June and July 2022, respectively.
−Removed: Financial markets are currently anticipating continued increases to market interest rates in 2022.
+Added: In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75% and 0.75% in March, May, June, July, September and November 2022, respectively.
+Added: Financial markets are currently anticipating continued increases to market interest rates in 2022 and into the beginning of 2023.
If interest rate increases do occur, we anticipate that our net interest income and net interest margin will be positively impacted.
−Removed: At June 30, 2022, the Federal Funds rate stood at 1.75%.
−Removed: A substantial portion of Great Southern’s loan portfolio ($1.24 billion at June 30, 2022) is tied to the one-month or three-month LIBOR index and will be subject to adjustment at least once within 90 days after June 30, 2022.
−Removed: Of these loans, $1.23 billion had interest rate floors at various rates.
−Removed: Great Southern also has a portfolio of loans ($693 million at June 30, 2022) tied to a “prime rate” of interest and will adjust immediately with changes to the “prime rate” of interest.
+Added: At September 30, 2022, the Federal Funds rate stood at 3.25% and on November 2, 2022 the Federal Funds rate was increased to 4.00%.
+Added: A substantial portion of Great Southern’s loan portfolio ($1.08 billion at September 30, 2022) is tied to the one-month or three-month LIBOR index and will be subject to adjustment at least once within 90 days after September 30, 2022.
+Added: Of these loans, $1.07 billion had interest rate floors.
+Added: Great Southern’s loan portfolio also includes loans ($357 million at September 30, 2022) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after September 30, 2022.
+Added: Of these loans, $357 million had interest rate floors.
+Added: Great Southern also has a portfolio of loans ($724 million at September 30, 2022) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest.
Of these loans, $665 million had interest rate floors at various rates.
−Removed: At June 30, 2022, nearly all of these LIBOR and “prime rate” loans had fully-indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases.
+Added: At September 30, 2022, nearly all of these LIBOR, SOFR and “prime rate” loans had fully-indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases.
Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution’s actual interest rate risk.
29 unchanged sentences
In March 2020, the Company and its swap counterparty mutually agreed to terminate the $400 million interest rate swap prior to its contractual maturity.
−Removed: The Company received a payment of $45.9 million from its swap counterparty as a result of this termination.
+Added: The Company was paid $45.9 million from its swap counterparty as a result of this termination.
In March 2022, the Company entered into another interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans.
13 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.