2 unchanged sentences
Our most prominent risk exposures are interest rate risk and credit risk.
−Removed: Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates.
−Removed: Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or investment when it is due and is disclosed in detail above.
Interest Rate Risk
−Removed: The most significant form of market risk is interest rate risk inherent in the normal course of lending and deposit-taking activities.
+Added: Our most significant form of market risk is interest rate risk inherent in the normal course of lending and deposit-taking activities.
+Added: Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates.
Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results.
To that end, management actively monitors and manages our interest rate exposure.
−Removed: The Asset/Liability Management Committee (ALCO), which is authorized by the Company’s board of directors, monitors our interest rate sensitivity and makes decisions relating to that process.
+Added: The Company’s Asset/Liability Management Committee (“ALCO”), which is authorized by the Company’s board of directors, monitors our interest rate sensitivity and makes decisions relating to that process.
The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment.
7 unchanged sentences
A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet.
−Removed: The following table sets forth, as of December 31, 2021 and 2020, the estimated impact on our EVE and net interest income of immediate changes in interest rates at the specified levels.
+Added: The following table sets forth, as of December 31, 2022 and 2021, the estimated impact on our EVE and net interest income of immediate and parallel changes in interest rates at the specified levels.
Increase (Decrease) in
6 unchanged sentences
December 31, 2021
−Removed: This data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors or changes in earning assets mix, which could reduce the actual impact on EVE and net interest income, if any.
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements.
Modeling changes in EVE and net interest income requires that we make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
−Removed: The EVE and net interest income table presented above assumes that the composition of our interest-rate-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors.
+Added: The EVE and net interest income table presented above assumes that the composition of our interest-rate-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors, which could change the actual impact on EVE and net interest income.
The table also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the repricing characteristics of specific assets and liabilities.
6 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.