7 unchanged sentences
Net gains or losses in available-for-sale securities can increase or decrease accumulated other comprehensive income or loss and total stockholders’ equity.
−Removed: To that end, management actively monitors and manages IRR.
+Added: Management actively monitors and manages IRR.
The extent of the movement of interest rates, higher or lower, is an uncertainty that could have a substantial impact on the earnings and stockholders’ equity of the Company.
1 unchanged sentence
evaluate the IRR inherent in the Company’s business;
−Removed: determine the level of risk appropriate given the Company’s business focus, operating environment, capital, and liquidity requirements and performance objectives;
+Added: determine the level of risk appropriate given the Company’s business focus, operating and interest rate environment, capital and liquidity requirements, and performance objectives;
and manage the risk consistent with Board approved guidelines.
−Removed: The Company’s Board has established an Asset Liability Committee (“ALCO”) consisting of members of management, responsible for reviewing asset liability policies and the IRR position.
+Added: The Company’s Board maintains an Asset Liability Committee (“ALCO”) consisting of members of management, responsible for reviewing asset liability policies and the IRR position.
ALCO meets regularly and reports the Company’s IRR position and trends to the Board on a regular basis.
1 unchanged sentence
(1) managing the origination, purchase, sale, and retention of various types of loans with differing IRR profiles;
−Removed: (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing core and longer-term deposits;
+Added: (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing stable relationship-based deposits and longer-term deposits;
(3) selectively purchasing interest rate swaps and caps converting the rates for customer loans to manage individual loans and the Bank’s overall IRR profile;
4 unchanged sentences
EVE is the difference between the net present value of assets, liabilities and off-balance-sheet contracts.
−Removed: The EVE ratio, in any interest rate scenario, is defined as the EVE in that scenario divided by the fair value of assets in the same scenario.
Interest rate sensitivity is monitored by management through the use of a model which measures IRR by modeling the change in EVE and net interest income over a range of interest rate scenarios.
7 unchanged sentences
Such changes may affect historical comparisons of these results.
−Removed: In the third quarter of 2023, the Company refined certain fair value assumptions related to the loan portfolio, including prepayment rates.
−Removed: This resulted in a modest increase to EVE and a decrease to its sensitivity, and had a marginal impact to the net interest income scenarios.
The Company performs a variety of EVE and twelve-month net interest income sensitivity scenarios.
−Removed: The following table sets forth sensitivity scenarios for a specific range of interest rate scenarios as of September 30, 2023 and December 31, 2022 (dollars in thousands).
−Removed: September 30, 2023 December 31, 2022
−Removed: Change in Interest Rates in Basis Points (Rate Shock) Economic Value of Equity Net Interest Income Economic Value of Equity Net Interest Income
−Removed: Amount % Change EVE Ratio Amount % Change Amount % Change EVE Ratio Amount % Change
−Removed: (dollars in thousands)
+Added: The following table sets forth sensitivity for a specific range of interest rate scenarios as of March 31, 2024 and December 31, 2023.
+Added: March 31, 2024 December 31, 2023
+Added: Change in Interest Rates in Basis Points Economic Value of Equity Net Interest Income Economic Value of Equity Net Interest Income
+Added: (Rate Shock) % Change % Change % Change % Change
300 (4.9) % 3.0 % (12.8) % (2.2) %
200 (3.0) 2.3 (9.1) (1.3)
+Added: 100 (1.4) 1.5 (5.2) (0.4)
Static — — — —
1 unchanged sentence
(200) 2.7 (3.7) 8.8 (1.9)
−Removed: The net interest income sensitivity results indicate that at both September 30, 2023 and December 31, 2022 the Company was modestly asset sensitive.
−Removed: The change in sensitivity between these periods was impacted by growth in floating rate loan and an increase in cash on hand, offset by the deposit mix shift into short-term time deposits and higher-yield savings deposits.
−Removed: Overall, the measure of EVE at risk increased in all rising rate scenarios from December 31, 2022 to September 30, 2023.
−Removed: This increase was the result of rising market rates resulting in lower market values in the loan and investment portfolios, along with the impact of an increase in deposit costs and a shift from lower cost, long-term non-maturity deposits to short-term higher cost time deposits and higher-yield savings deposits.
+Added: (300) 0.3 (6.6) 6.8 (4.2)
+Added: The net interest income sensitivity results indicate that at March 31, 2024 the Company was modestly asset sensitive.
+Added: The change in sensitivity between March 31, 2024 and December 31, 2023 was impacted by a deposit mix shift within non-maturity deposits with lower betas as well as a change in loan prepayments, partially offset by an increase in overnight borrowings and reduction in short-term time deposits.
+Added: Overall, the measure of EVE at risk decreased in all rate scenarios from December 31, 2023 to March 31, 2024.
+Added: This decrease was the result of a deposit mix shift within non-maturity deposits with lower betas and longer average lives, as well as a change in loan prepayments.
Certain shortcomings are inherent in the methodology used in the EVE and net interest income IRR measurements.
5 unchanged sentences
Lastly, the model utilizes data derived from historical performance.
−Removed: Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates, given the unique nature of the post-pandemic interest rate environment and the speed with which interest rates have been changing, the projections noted above on the Company’s EVE and net interest income and can be expected to significantly differ from actual results.
+Added: Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates.
+Added: Given the unique nature of the post-pandemic interest rate environment and the speed with which interest rates have been changing, the projections noted above on the Company’s EVE and net interest income can be expected to significantly differ from actual results.
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.