3 unchanged sentences
Management of interest rate risk is carried out primarily through strategies involving available-for-sale securities, loan and lease portfolio, and available funding sources.
−Removed: The Company has an Asset/Liability Committee to support prudent oversight of interest rate risk management.
−Removed: The Asset/Liability Committee monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.
+Added: The Company has an Asset/Liability Committee to communicate, coordinate and control all aspects involving interest rate risk management.
+Added: The Asset/Liability Committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.
Adherence to relevant policies is monitored on an ongoing basis by the Asset/Liability Committee.
−Removed: The Company has a total cumulative gap in interest-earning assets and interest-bearing liabilities of 3.1% as of September 30, 2024, indicating that, overall, over the expected life of the instruments, assets will reprice before liabilities.
+Added: The Company has a total cumulative gap in interest-earning assets and interest-bearing liabilities of 5.1% as of March 31, 2025, indicating that, overall, assets will reprice before liabilities during the expected life of the instruments.
+Added: Cumulative gap is a useful measure to monitor balance sheet match-funding, yet economic value of equity and net interest income simulations, discussed below, are more useful in understanding potential impacts to earnings from a change in interest rates.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.
1 unchanged sentence
economic value of equity (“EVE”) and net interest income (“NII”) simulations.
−Removed: These simulations project both short-term and long-term interest rate risk under a variety of instantaneous parallel rate shocks applied to a static balance sheet.
The EVE simulation provides a long-term view of interest rate risk because it analyzes all of the Company’s future cash flows.
1 unchanged sentence
The results show a theoretical change in the economic value of shareholders’ equity as interest rates change.
−Removed: The NII simulation provides a short-term view of interest rate risk as it analyzes impact on net interest income over the next 12 and 24 months from instantaneous parallel rate shocks on a static balance sheet.
+Added: The NII simulation provides a short-term view of interest rate risk as it analyzes impact on net interest income over a 12-month and 24-month time horizon.
+Added: NII simulations are prepared by calculating net interest income in a scenario where interest rates do not change (base case) and then recalculated in scenarios with higher and lower interest rates.
+Added: The results of each variation are compared against the base case scenario to determine the potential change in earnings.
EVE and NII simulations are completed regularly and presented to the Asset/Liability Committee.
−Removed: The simulations provide an estimate of the impact of changes in interest rates on equity and net interest income under a range of assumptions.
+Added: The simulations provide an estimate of the impact of changes in interest rates on equity and net interest income under a range of assumptions, and under instantaneous parallel interest rate shocks assuming a static balance sheet.
The numerous assumptions used in the simulation process are provided to the Asset/Liability Committee on at least an annual basis.
6 unchanged sentences
The Company believes that regular modeling of various interest rate outcomes allows it to assess and manage potential risks from various rate shifts.
−Removed: The table below sets forth an approximation of the Company’s NII sensitivity exposure for the 12-month periods ending September 30, 2025 and 2026, and the Company’s EVE sensitivity at September 30, 2024.
−Removed: The simulation uses projected repricing of assets and liabilities at September 30, 2024, on the basis of contractual maturities, anticipated repayments and scheduled rate adjustments.
−Removed: Critical model assumptions such as loan and investment prepayment rates, deposit decay rates, changes in deposit pricing, both in amount and timing, relative to changes in market rates (commonly referred to as deposit betas and lags, respectively) and assumed replacement pricing can have a significant impact on interest income simulation.
+Added: The table below sets forth an approximation of the Company’s NII sensitivity exposure for the 12-month periods ending March 31, 2026 and 2027, and the Company’s EVE sensitivity at March 31, 2025 under instantaneous parallel interest rate shocks assuming a static balance sheet.
+Added: The simulation uses projected repricing of assets and liabilities at March 31, 2025, on the basis of contractual maturities, anticipated repayments and scheduled rate adjustments.
+Added: Critical model assumptions such as loan and investment prepayment rates, deposit decay rates, deposit betas and lags and assumed replacement pricing can have a significant impact on interest income simulation.
A static balance sheet is maintained to remove volume considerations and to place the focal point on the rate sensitivity of the Company’s balance sheet.
−Removed: While management believes such assumptions to be reasonable, actual future activity may differ from the results shown below as it will include growth considerations, non-parallel rate movements, and management actions to mitigate the impacts of changing interest rates on the balance sheet’s earnings profile.
+Added: While management believes such assumptions to be reasonable, approximate actual future activity may differ from the results shown below as it will include growth considerations and management actions to mitigate the impacts of changing interest rates on the balance sheet’s earnings profile.
Estimated Increase/Decrease
2 unchanged sentences
Basis Point ("bp") Change in
−Removed: Interest Rates 12 Months Ending September 30, 2025 12 Months Ending September 30, 2026 As of September 30, 2024
−Removed: +400 9.7 % 6.7 % (19.4 %)
+Added: Interest Rates 12 Months Ending March 31, 2026 12 Months Ending March 31, 2027 As of March 31, 2025
+300 13.0% 8.0% (8.3)%
5 unchanged sentences
Rates are increased instantaneously at the beginning of the projection.
−Removed: The Company's asset/liability profile is slightly asset sensitive in both years one and two from a net interest income perspective.
−Removed: The Company’s variable rate loan portfolio reprices the full amount of the assumed change in interest rates, while the retail savings and short-term retail certificates of deposits portfolio will reprice with an assumed beta.
+Added: Under this instantaneous parallel interest rate shock, with a static balance sheet NII simulation, the Company is moderately asset sensitive in the initial year, as the Company’s large variable rate loan portfolio reprices the full amount of the assumed change in interest rates, while the large retail savings and short-term retail certificates of deposits portfolio will reprice with an assumed beta.
+Added: The Company is slightly asset sensitive in the second year of the projection due to interest rates increasing or decreasing for the full year, the Company’s loan portfolio continuing to reprice, and also due to the other assumptions used in the analysis as noted previously.
Interest rates do not normally move all at once or evenly over time, but management believes that the analysis is useful to understanding the potential direction and magnitude of net interest income changes due to changing interest rates.
The EVE analysis shows that the Company would theoretically lose market value in a rising rate environment.
−Removed: The favorable EVE change resulting from the loan and lease portfolio in a rising rate analysis is more than offset by the devaluation of the interest-bearing liabilities.
This is largely driven by the Company’s longer asset duration, primarily consisting of investments and loans, versus the shorter duration of its funding portfolio, primarily consisting of retail savings and short-term retail certificates of deposits.
−Removed: Increased fixed rate loan production since 2020, given the historical low market rate environment, has also been a significant driver in the model results.
+Added: The NII and EVE simulation analysis shown above is only an estimate of interest rate risk exposure at a particular point in time without growth considerations.
+Added: The Company regularly models various forecasted rate projections with non-parallel shifts that are reflective of potential current rate environment outcomes using the Company’s assumed growth projections.
+Added: Under these scenarios, the Company’s interest rate risk profile may increase in asset sensitivity, decrease in asset sensitivity, or depending on the scenario and timing of anticipated rate changes, may transition to a liability sensitive interest rate risk profile.
+Added: Regular, robust modeling of various interest rate outcomes allows the Company to properly assess and manage potential risks from various rate shifts.
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.