11 unchanged sentences
Based on the nature of operations, we are not subject to foreign exchange or commodity price risk.
−Removed: Our exposure to interest rate risk is managed by the Bank’s Asset-Liability Management Committee in accordance with policies approved by the Bank’s board of directors.
+Added: Our exposure to interest rate risk is managed by the Bank’s Asset Liability Committee in accordance with policies approved by the Bank’s board of directors.
The committee formulates strategies based on appropriate levels of interest rate risk.
−Removed: In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors.
+Added: In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates and the economy, potential changes in interest rates, liquidity, business strategies and other factors.
The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings.
7 unchanged sentences
These models test the impact on net interest income and fair value of equity from changes in market interest rates under various scenarios.
−Removed: Under the static model, rates are shocked instantaneously, and ramped rates change over a twelve-month and twenty-four-month horizon based upon parallel yield curve shifts.
+Added: Under the static model, rates are shocked instantaneously, and ramped rates change over a twelve-month horizon based upon parallel yield curve shifts.
Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario.
Additionally, we run a non-parallel simulation involving analysis of interest income and expense under various changes in the shape of the yield curve.
−Removed: Internal policy regarding interest rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 10.0% for a 100-basis point shift, 15.0% for a 200-basis point shift, 20.0% for a 300-basis point shift, and 25.0% for a 400-basis point shift.
+Added: Internal policy regarding interest rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not change by more than 10.0% for a 100-basis point shift, 15.0% for a 200-basis point shift, 20.0% for a 300-basis point shift, and 25.0% for a 400-basis point shift.
We continue to monitor our asset sensitivity and evaluate strategies to prevent being significantly impacted by future changes in interest rates.
13 unchanged sentences
We have found that, historically, interest rates on deposits do not change completely in tandem with the changes in the discount and federal funds rates.
−Removed: Overall, interest rates on deposits typically experience a lower degree of rate change than changes in market interest rates.
−Removed: This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis, meaning that process by which we measure the gap between interest rate sensitive assets versus interest rate sensitive liabilities.
+Added: Overall, interest rates on deposits typically experience a lower degree of rate change than changes in market interest rates and this assumption is incorporated into the simulation model.
The assumptions incorporated into the model are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income.
1 unchanged sentence
The FRB sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions and the fair value of our available for sale securities.
−Removed: On September 18, 2024, the FRB reduced the federal funds target rate range by 50 basis points, to a range of 4.75% to 5.00%, marking the first rate reduction since early 2020.
−Removed: Subsequently, it implemented two additional reductions, with the current federal funds target range set to 4.25% to 4.50% on December 18, 2024.
−Removed: During the second half of 2024, the federal funds target range decreased 100 basis points from its recent cycle high.
+Added: The Federal Reserve Board reduced the federal funds target rate range six times during the two years ended December 31, 2025, for a total of 175 basis points from its recent cycle high set in mid-2023, to a range of 3.50% to 3.75%.
Impact of Inflation
10 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.