6 unchanged sentences
The asset and liability management function is under the guidance of the ALCO with direction from the Board of Directors.
−Removed: The ALCO meets monthly to review, among other things, the sensitivity of the Company’s assets and liabilities to interest rate changes, local and national market conditions and rates.
+Added: The ALCO meets monthly to review, among other things, the sensitivity of the Company’s assets and liabilities to interest rate changes, and local and national market conditions and rates.
The ALCO also reviews the liquidity, capital, deposit mix, loan mix and investment positions of the Company.
5 unchanged sentences
The impact of changes in interest rates on this calculation is analyzed for the risk to our future earnings and is used in conjunction with the analyses on net interest income.
−Removed: The table below illustrates the impact of an immediate and sustained 200 and 100 basis point increase and a 200 and 100 basis point decrease in interest rates on net interest income based on the interest rate risk model at September 30, 2022 and December 31, 2021.
+Added: The table below illustrates the impact of an immediate and sustained 200 and 100 basis point increase and a 200 and 100 basis point decrease in interest rates on net interest income based on the interest rate risk model at March 31, 2023 and December 31, 2022.
% Change in projected net interest income
−Removed: Hypothetical shift in interest rates September 30, December 31,
+Added: Hypothetical shift in interest rates March 31, December 31,
(bps) 2023 2022
3 unchanged sentences
(200) 2.79 % 5.80 %
−Removed: The change in the Company’s interest rate risk exposure from December 31, 2021 to September 30, 2022 was primarily due to a change in the profile of the Company’s earning assets.
−Removed: At December 31, 2021, the Company had significant balances in overnight Federal funds sold as the Company had greater liquidity due to higher balances in customer deposit accounts, including a seasonal spike in certain public funds customer’s account balances.
−Removed: This type of earning asset reprices immediately as interest rates change.
−Removed: Since December 31, 2021, the balances in Federal funds sold have reduced significantly, in large measure due to funding the significant growth in loans during the first nine months of 2022.
−Removed: Management believes the change in projected net interest income from interest rate shifts of up 200 bps and down 200 bps is an acceptable level of interest rate risk.
+Added: The change in the Company’s interest rate risk exposure from December 31, 2022 to March 31, 2023 was primarily due to a change in the profile of the Company’s funding sources.
+Added: At December 31, 2022, the Company had higher balances in customer deposit accounts, including a seasonal spike in certain public funds account balances.
+Added: This funding source reprices immediately as interest rates change.
+Added: Since December 31, 2022, there has been a shift from deposits that reprice immediately as the federal funds rate changes to more fixed-rate funding sources, including time deposits.
+Added: A change in the mix of funding sources translates into lower projected net interest income growth when compared to December 31, 2022.
+Added: The Company’s balance sheet is liability sensitive, where interest rate decreases translate into higher net interest income.
+Added: Management believes that the change in projected net interest income from interest rate shifts of up 200 bps and down 200 bps is an acceptable level of interest rate risk.
Many assumptions are used to calculate the impact of interest rate fluctuations.
Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve.
−Removed: The computations of interest rate risk shown above do not include actions that management may undertake to manage the risks in response to anticipated changes in interest rates and actual results may also differ due to any actions taken in response to the changing rates.
+Added: The computations of interest rate risk shown above do not include actions that management may
+Added: undertake to manage the risks in response to anticipated changes in interest rates and actual results may also differ due to any actions taken in response to the changing rates.
Effects of Inflation
4 unchanged sentences
Inflation does have an impact on the growth of total assets in the banking industry, often resulting in a need to increase capital at higher than normal rates to maintain an appropriate capital to asset ratio.
−Removed: In the opinion of management, inflation did not have a significant effect on the Company’s operations for the three months ended September 30, 2022.
+Added: In the opinion of management, inflation did not have a significant effect on the Company’s operations for the three months ended March 31, 2023.
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.