17 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.
+Added: The base and shock scenarios in the rate shock analysis assume a static balance sheet, static interest rates, no changes to product mix shift, and cash flow reinvestment at current market interest rates.
+Added: We also make assumptions for our deposit betas and asset prepayments, based on historical experience.
+Added: Deposit Betas
+Added: Deposit pricing changes are primarily driven by changes in the federal funds rate, with the relationship between deposit rates and federal funds rate defined as deposit beta.
+Added: We define cumulative deposit beta as the change in our quarterly cost of deposits divided by the change in the upper level of the stated federal funds rate range over a specified period.
+Added: During the most recent rising rate cycle, which was from the fourth quarter of 2021 through the second quarter of 2024, our cumulative deposit beta was 23.6%.
+Added: During the current falling rate cycle, which began with the third quarter of 2024, our cumulative deposit beta was 13.1%.
+Added: Asset Prepayments
+Added: We include prepayment assumptions for both our loan and securities portfolios, based on historical experience.
+Added: Generally, mortgage portfolio prepayments increase in lower rate environments, while commercial and consumer portfolios have historically remained more consistent throughout rate cycles.
The following table sets forth the estimated impact on our EVE and net interest income of immediate and parallel changes in interest rates at the specified levels.
21 unchanged sentences
-300 (4.5) (9.5) (16.0)
+Added: -400 5.4 (10.2) (17.3)
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements.
4 unchanged sentences
Credit risk is the risk that borrowers or counterparties will be unable or unwilling to repay their obligations in accordance with the underlying contractual terms.
−Removed: We manage and control credit risk in the loan portfolio by adhering to well-defined underwriting criteria and account administration standards established by management.
+Added: We manage credit risk in the loan portfolio by adhering to well-defined underwriting criteria and account administration standards established by management.
Our loan policy documents underwriting standards, approval levels, exposure limits and other limits or standards deemed necessary and prudent.
2 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.