14 unchanged sentences
and (3) economic value of equity simulation.
−Removed: These models require that we use various assumptions, including asset and liability pricing responses, asset and liability new business, repayment and redemption responses, behavior of imbedded options and sensitivity of relationships across different rate indexes and product types.
+Added: These models require that we use various assumptions, including asset and liability pricing responses, asset and liability new business, repayment and redemption responses, behavior of embedded options and sensitivity of relationships across different rate indexes and product types.
These assumptions are inherently uncertain and, as a result, the models cannot precisely predict the fluctuations in market interest rates or precisely measure the impact of future changes in interest rates.
Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.
−Removed: Gap analysis.
−Removed: Management measures and evaluates the potential effects of interest rate movements on earnings through an interest rate sensitivity “gap” analysis.
−Removed: Given the size and turnover rate of the originated mortgage loans held for sale, loans held for sale are treated as having a maturity of 12 months or less.
−Removed: Interest rate sensitivity reflects the potential effect on net interest income when there is movement in interest rates.
−Removed: An institution is considered to be asset sensitive, or having a positive gap, when the amount of its interest-earning assets reprices within a given period exceeds the amount of its interest-bearing liabilities also repricing within that time period.
−Removed: Conversely, an institution is considered to be liability sensitive, or having a negative gap, when the amount of its interest-bearing liabilities reprices within a given period exceeds the amount of its interest-earning assets also within that time period.
−Removed: During a period of rising interest rates, a negative gap would tend to decrease net interest income, while a positive gap would tend to increase net interest income.
−Removed: During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income, while a positive gap would tend to decrease net interest income.
−Removed: The following table presents the interest rate gap analysis of our assets and liabilities as of December 31, 2021.
−Removed: As of December 31, 2021
−Removed: (dollars in thousands)
−Removed: Cash and investments
−Removed: Non-interest bearing deposits
−Removed: Interest bearing deposits
−Removed: Time deposits
−Removed: Other Liabilities
−Removed: Total stockholders' equity
−Removed: Total liabilities and stockholders' equity
−Removed: Repricing gap:
−Removed: Positive (negative)
−Removed: Cumulative repricing gap:
−Removed: Dollar amount
−Removed: Percent of total assets
−Removed: (1) Loans include portfolio loans and loans held-for-sale
−Removed: Under the static repricing gap analysis for the fiscal year ended December 31, 2021, we model as slightly liability-sensitive through two years.
−Removed: This result is mainly due to core-deposit growth from our strategy of increasing the concentration of relationship-based transaction accounts through the efforts of our business developers.
−Removed: Core customer preference, in the current economic environment, is for short term or liquid deposits.
−Removed: In addition, excess cash from PPP loan forgiveness and sale of loans held for sale were used to pay down borrowings at the end of the year to manage the margin.
Simulations of net interest income.
11 unchanged sentences
The simulation assumes rate shifts occur upward and downward on the yield curve in even increments over the first twelve months (ramp), followed by rates held constant thereafter.
−Removed: Estimated increase
−Removed: (decrease) in Net Interest
−Removed: For the year ending
−Removed: Changes in Market Interest Rates
+Added: Changes in Market Interest Rates December 31,
+Added: 2022 December 31,
+300 basis points over next 12 months (0.56) % 0.21 %
4 unchanged sentences
The above interest rate simulation suggests that the Corporation’s balance sheet is narrowly liability sensitive as of December 31, 2022.
−Removed: In its current position, the table indicates that a 100 or 200 basis point increase in interest rates would have a modestly negative impact from rising rates on net interest income over the next 12 months and a modestly positive impact in a 300 basis point increase.
−Removed: The simulated exposure to a change in interest rates is contained, manageable and well within policy guidelines.
−Removed: The results continue to drive our funding strategy of increasing relationship-based accounts (core deposits).
+Added: In its current position, the table indicates that a 100-300 basis point increase in interest rates would have a modestly negative impact from rising rates on net interest income over the next 12 months and a more negative impact in a falling rate scenario.
+Added: The simulated
+Added: exposure to a change in interest rates is contained, manageable and well within policy guidelines.
+Added: The results reflect a higher degree of wholesale funding at December 31, 2022 and continue to drive our funding strategy of increasing relationship-based accounts (core deposits).
Simulation of economic value of equity .
6 unchanged sentences
Strategies include actively lowering deposit and funding rates as well as adding and maintaining the use of interest rate floors on floating rate loans.
−Removed: Estimated increase (decrease) in Net
−Removed: Economic Value at December 31,
−Removed: Changes in Market Interest Rates
+Added: Changes in Market Interest Rates December 31,
+Added: 2022 December 31,
+300 basis points 2 % 60 %
18 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.